S-4/A 1 d82079ds4a.htm S-4/A S-4/A
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As filed with the Securities and Exchange Commission on July 23, 2019

Registration No. 333-232530

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 1

To

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SALESFORCE.COM, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   7372   94-3320693

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

Salesforce Tower

415 Mission Street, 3rd Floor

San Francisco, California 94105

(415) 901-7000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

 

Amy Weaver, Esq.

President, Legal and Corporate Affairs,

General Counsel and Secretary

Salesforce Tower

415 Mission Street, 3rd Floor

San Francisco, California 94105

(415) 901-7000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

 

 

Copies to:

 

Andrew J. Nussbaum, Esq.

Edward J. Lee, Esq.

Raaj S. Narayan, Esq.

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

(212) 403-1000

 

Keenan M. Conder, Esq.

Executive Vice President, General Counsel and Corporate Secretary

Tableau Software, Inc.

1621 North 34th Street

Seattle, Washington 98103

(206) 633-3400

 

Jamie K. Leigh, Esq.

Ben W. Beerle, Esq.

Jodie M. Bourdet, Esq.

Cooley LLP

101 California Street, 5th Floor

San Francisco, California 94111

(415) 693-2000

 

 

Approximate date of commencement of proposed sale of the securities to the public: July 3, 2019, the date on which the preliminary prospectus and tender offer materials are filed and sent to securityholders. The offer cannot, however, be completed prior to the time this Registration Statement becomes effective. Accordingly, any actual sale or purchase of securities pursuant to the offer will occur only after this Registration Statement is effective, subject to the conditions to the transactions described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐


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

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer   ☐  (Do not check if a smaller reporting company)    Smaller reporting company  
Emerging growth company       

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Amount

to be

registered

 

Proposed

maximum

offering price

per share

 

Proposed

maximum

aggregate

offering price

  Amount of
registration fee

Common stock, par value $0.001 per share

  109,382,443 shares(1)(4)   N/A   $16,347,998,375(2)(4)   $1,981,377.40(3)(5)

 

 

(1)

Represents the maximum number of shares of salesforce.com, inc. (“Salesforce”) common stock estimated to be issuable upon consummation of the offer and the subsequent merger described herein, calculated by totaling (A) 96,372,111, which is the product obtained by multiplying the exchange ratio of 1.103 by 87,372,720, which is the sum of 77,003,759 shares of Class A common stock and 10,368,961 shares of Class B common stock of Tableau Software, Inc. (“Tableau”) outstanding as of June 24, 2019 and (B) 10,252,832, which is the maximum number of Salesforce shares issuable in respect of Tableau equity awards.

(2)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act on the basis of the market value of the shares of Tableau Software, Inc. (“Tableau”) common stock to be cancelled in the offer and the subsequent merger described herein, computed in accordance with Rule 457(f)(1) and Rule 457(f)(3). The proposed maximum aggregate offering price of the securities being registered was calculated based on the product of (i) $164.60, the average of the high and low sales prices per share of Tableau Class A common stock on June 28, 2019, as reported by the New York Stock Exchange, and (ii) 96,668,125 (which represents the estimated maximum number of shares of Tableau Class A common stock and Tableau Class B common stock that may be exchanged in the offer and the subsequent merger described herein for the transaction consideration, including (x) shares underlying Tableau equity awards outstanding as of June 24, 2019, and (y) shares underlying Tableau equity awards that are expected to be granted between June 24, 2019 and the closing of the offer and the subsequent merger described herein in accordance with the merger agreement described herein). In accordance with Rule 416, this Registration Statement also covers an indeterminate number of additional shares of Tableau securities as may be issuable as a result of stock splits, stock dividends or similar transactions. The Tableau Class B common stock is not publicly traded but converts, on a one-for-one basis, into Tableau Class A common stock at the election of the holder. Each share of Tableau Class B common stock validly tendered and not validly withdrawn pursuant to the offer described herein will automatically convert into one share of Tableau Class A common stock upon consummation of the offer.

(3)

The amount of the filing fee, calculated in accordance with Rule 457(c) and Rule 457(f) under the Securities Act, equals 0.0001212 multiplied by the proposed maximum offering price.

(4)

In connection with the filing of this amendment to the registration statement, the registrant is registering an additional 2,757,500 shares of Salesforce common stock to be issued in connection with the offer and the merger (the “Additional Registered Shares”), which number is the product of (a) 2,500,000, which is the maximum number of additional shares of Tableau Class A common stock to be exchanged or assumed in the merger, including in respect of Tableau equity awards expected to be granted following July 3, 2019 and shares reserved for issuance under equity plans of Tableau and (b) the exchange ratio of 1.103. The proposed maximum aggregate offering price of the Additional Registered Shares was calculated based upon the market value of shares of Tableau Class A common stock in accordance with Rules 457(a), 457(c) and 457(f) under the Securities Act, as follows: the product of (x) $174.57, the average of the high and low sales prices per share of Tableau Class A common stock on July 19, 2019, as reported by the New York Stock Exchange, multiplied by (y) 2,500,000, the additional shares of Tableau Class A common stock to be exchanged or assumed in the merger, including in respect of Tableau equity awards expected to be granted following July 3, 2019 and shares reserved for issuance under equity plans of Tableau.

(5)

Includes a registration fee of $1,928,482.69 previously paid in connection with the original filing of this registration statement on July 3, 2019, with respect to the 106,624,943 shares of Salesforce common stock listed in the calculation fee table of such filing. An additional registration fee of $52,894.71 is being paid in connection with the filing of this amendment to the registration statement with respect to the 2,757,500 Additional Registered Shares being registered hereby.

 

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this document may change. The registrant may not complete the offer and issue these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This document is not an offer to sell these securities, and the registrant is not soliciting an offer to buy these securities, in any state or jurisdiction in which such offer is not permitted.

 

PRELIMINARY AND SUBJECT TO CHANGE, DATED JULY 23, 2019

Offer by

SAUSALITO ACQUISITION CORP.

an indirect wholly owned subsidiary of

salesforce.com, inc.

to Exchange Each Outstanding Share of Class A Common Stock and

Class B Common Stock of

TABLEAU SOFTWARE, INC.

for

1.103 shares of common stock of salesforce.com, inc.

 

 

THE OFFER AND THE WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, EASTERN TIME, AT THE END OF JULY 31, 2019, UNLESS EXTENDED OR TERMINATED.

salesforce.com, inc. (which we refer to as “Salesforce”), a Delaware corporation, through its indirect wholly owned subsidiary Sausalito Acquisition Corp., a Delaware corporation (which we refer to as the “Offeror”), is offering, upon the terms and subject to the conditions set forth in this document and in the accompanying letter of transmittal, to exchange for each outstanding share of Class A common stock of Tableau Software, Inc., a Delaware corporation (which we refer to as “Tableau”), par value $0.0001 per share (which we refer to as “Tableau Class A common stock”), and Class B common stock of Tableau, par value $0.0001 per share (which we refer to as “Tableau Class B common stock,” and together with “Tableau Class A common stock,” “Tableau common stock” and such shares of Tableau common stock, “Tableau shares”), validly tendered and not validly withdrawn in the offer, 1.103 shares of Salesforce common stock, par value $0.001 per share (which we refer to as “Salesforce common stock” and such shares of Salesforce common stock, “Salesforce shares”), together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.

We refer to the above as the “transaction consideration.”

The Offeror’s obligation to accept for exchange Tableau shares validly tendered (and not validly withdrawn) pursuant to the offer is subject to the satisfaction or waiver by the Offeror of certain conditions, including the condition that, prior to the expiration of the offer, there have been validly tendered and not validly withdrawn a number of Tableau shares that, upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together with Tableau shares then owned by Salesforce and the Offeror (if any), would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer (which we refer to as the “minimum tender condition”), as more fully described under “The Offer—Conditions of the Offer.”

The offer is being made pursuant to an Agreement and Plan of Merger (which we refer to as the “merger agreement”), dated as of June 9, 2019, among Salesforce, the Offeror and Tableau. A copy of the merger agreement is attached to this document as Annex A.

The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares. If the offer is completed and as a second step in such plan, Salesforce intends to promptly consummate a merger of the Offeror with and into Tableau, with Tableau surviving the merger (which we refer to as the “merger”). The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer. In the merger, each outstanding Tableau share that was not acquired by Salesforce or the Offeror (other than certain converted or cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. Upon the consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former Tableau stockholders will no longer have any direct ownership interest in the surviving corporation. If the offer is completed, such that Salesforce accordingly owns at least a majority of the aggregate voting power of Tableau’s outstanding common stock, the merger will be governed by Section 251(h) of the General Corporation Law of the State of Delaware (which we refer to as the “DGCL”), and accordingly no stockholder vote will be required to complete the merger. The board of directors of Tableau has unanimously (i) determined that the terms of the merger agreement and the transactions contemplated by the merger agreement, including the offer, the merger and the issuance of Salesforce shares in connection therewith, are fair to, and in the best interests of, Tableau and its stockholders; (ii) determined that it is in the best interests of Tableau and its stockholders and declared it advisable to enter into the merger agreement; (iii) approved the execution and delivery by Tableau of the merger agreement, the performance by Tableau of its covenants and agreements contained in the merger agreement and the consummation of the offer, the merger and the other transactions contemplated by the merger agreement upon the terms and subject to the conditions contained in the merger agreement; and (iv) resolved to recommend that the stockholders of Tableau accept the offer and tender their shares of Tableau common stock to the Offeror pursuant to the offer.

The Salesforce board of directors also determined that the merger agreement and the transactions contemplated by the merger agreement, including the offer and the merger and the issuance of Salesforce shares in the offer and merger, are advisable and fair to, and in the best interests of, Salesforce and its stockholders, and approved the execution and delivery by Salesforce of the merger agreement.

Salesforce common stock is listed on the New York Stock Exchange (which we refer to as the “NYSE”) under the symbol “CRM,” and Tableau Class A common stock is listed on the NYSE under the symbol “DATA.” The Tableau Class B common stock is not publicly traded but converts, on a one-for-one basis, into Tableau Class A common stock at the election of the holder. Each share of Tableau Class B common stock validly tendered and not validly withdrawn pursuant to the exchange offer will automatically convert into one share of Tableau Class A common stock upon consummation of the exchange offer.

The offer and the merger, taken together, are intended to qualify as a reorganization for U.S. federal income tax purposes. Holders of Tableau shares should read the section entitled “Material U.S. Federal Income Tax Consequences” for a more detailed discussion of certain U.S. federal income tax consequences of the offer and the merger to holders of Tableau shares.

For a discussion of certain factors that Tableau stockholders should consider in connection with the offer, please read the section of this document entitled “Risk Factors” beginning on page 27.

You are encouraged to read this entire document and the related letter of transmittal carefully, including the annexes and information referred to or incorporated by reference in this document.

Neither Salesforce nor the Offeror has authorized any person to provide any information or to make any representation in connection with the offer other than the information contained or incorporated by reference in this document, and if any person provides any information or makes any representation of this kind, that information or representation must not be relied upon as having been authorized by Salesforce or the Offeror.

Neither the U.S. Securities and Exchange Commission (which we refer to as the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offense.

The date of this preliminary prospectus/offer to exchange is July 23, 2019.


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TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER

     2  

SUMMARY

     12  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF SALESFORCE

     20  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF TABLEAU

     22  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

     24  

COMPARATIVE PER SHARE DATA (UNAUDITED)

     26  

RISK FACTORS

     27  

FORWARD-LOOKING STATEMENTS

     33  

THE COMPANIES

     36  

Salesforce

     36  

The Offeror

     36  

Tableau

     36  

THE OFFER

     37  

General

     37  

Background of the Offer and the Merger

     37  

Tableau’s Reasons for the Offer and the Merger; Recommendation of the Tableau Board of Directors

     43  

Salesforce’s Reasons for the Offer and the Merger

     47  

Projected Financial Information

     49  

Opinion of Tableau’s Financial Advisor

     52  

Distribution of Offering Materials

     59  

Expiration of the Offer

     59  

Extension, Termination and Amendment of the Offer

     60  

Exchange of Shares; Delivery of Salesforce Shares

     61  

Withdrawal Rights

     62  

Procedure for Tendering

     62  

No Guaranteed Delivery

     64  

Grant of Proxy

     64  

Tableau Class A Common Stock and Tableau Class B Common Stock

     64  

Fees and Commissions

     65  

Matters Concerning Validity and Eligibility

     65  

Announcement of Results of the Offer

     65  

Purpose of the Offer and the Merger

     65  

No Stockholder Approval

     66  

No Appraisal Rights

     66  

Non-Applicability of Rules Regarding “Going Private” Transactions

     66  

Plans for Tableau

     67  

Ownership of Salesforce Shares after the Offer and the Merger

     67  

 

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Effect of the Offer on the Market for Tableau Shares; NYSE Listing; Registration under the Exchange Act; Margin Regulations

     67  

Conditions of the Offer

     69  

Regulatory Approvals

     70  

Litigation Relating to the Offer and the Merger

     72  

Interests of Certain Persons in the Offer and the Merger

     73  

Certain Relationships with Tableau

     82  

Fees and Expenses

     83  

Accounting Treatment

     83  

Stock Exchange Listing

     83  

Resale of Salesforce Common Stock

     83  

Exchange Agent Contact Information

     84  

MERGER AGREEMENT

     85  

OTHER TRANSACTION AGREEMENTS

     107  

Letter Agreement

     107  

Confidentiality Agreement

     107  

Exclusivity Agreement

     108  

COMPARATIVE MARKET PRICE AND DIVIDEND MATTERS

     109  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     110  

Introduction

     110  

Pro Forma Information

     110  

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

     116  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

     122  

DESCRIPTION OF SALESFORCE CAPITAL STOCK

     126  

COMPARISON OF STOCKHOLDERS’ RIGHTS

     128  

LEGAL MATTERS

     134  

EXPERTS

     134  

WHERE TO OBTAIN MORE INFORMATION

     135  

 

Annex A

              Agreement and Plan of Merger      A-1  

Annex B

              Opinion of Goldman Sachs & Co. LLC      B-1  

Annex C

              Directors and Executive Officers of Salesforce and the Offeror      C-1  

 

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This document incorporates by reference important business and financial information about Salesforce, Tableau and their respective subsidiaries from documents filed with the SEC that have not been included in or delivered with this document. This information is available without charge at the SEC’s website at www.sec.gov, as well as from other sources. See “Where to Obtain More Information.”

You can obtain the documents incorporated by reference in this document by requesting them in writing or by telephone at the following address and telephone number:

salesforce.com, inc.

Salesforce Tower

415 Mission Street, 3rd Floor

San Francisco, California 94105

Attention: Investor Relations

(415) 536-6250

In addition, if you have questions about the offer or the merger, or if you need to obtain copies of this document and the letter of transmittal or other documents incorporated by reference in this document, you may contact the information agent for this transaction. You will not be charged for any of the documents you request.

The Information Agent for the Offer is:

 

 

LOGO

509 Madison Avenue

Suite 1206

New York, NY 10022

Shareholders Call Toll Free: (800) 662-5200

Banks & Brokers Call Collect: (203) 658-9400

E-mail: DATA@morrowsodali.com

If you would like to request documents, please do so by July 25, 2019, in order to receive them before the expiration of the offer.

Information included in this document relating to Tableau, including but not limited to the descriptions of Tableau and its business and the information under the headings “The Offer—Tableau’s Reasons for the Offer and the Merger; Recommendation of the Tableau Board of Directors,” “The Offer—Opinion of Tableau’s Financial Advisor” and “The Offer—Interests of Certain Persons in the Offer and the Merger,” also appears in the Solicitation/Recommendation Statement on Schedule 14D-9 dated as of the date of this document and filed by Tableau with the SEC (which we refer to as the “Schedule 14D-9”). The Schedule 14D-9 is being mailed to holders of Tableau shares as of the date of this document.

 

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QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER

Below are some of the questions that you as a holder of Tableau shares may have regarding the offer and the merger, and answers to those questions. You are urged to carefully read the remainder of this document and the related letter of transmittal and the other documents to which we have referred because the information contained in this section and in the “Summary” is not complete. Additional important information is contained in the remainder of this document and the related letter of transmittal. See “Where to Obtain More Information.” As used in this document, unless otherwise indicated or if the context so requires, “Salesforce” or “we” refers to salesforce.com, inc. and its consolidated subsidiaries; the “Offeror” refers to Sausalito Acquisition Corp., an indirect wholly owned subsidiary of Salesforce; and “Tableau” refers to Tableau Software, Inc. and its consolidated subsidiaries.

Who is offering to buy my Tableau shares?

Salesforce, through the Offeror, its indirect wholly owned subsidiary, is making this offer to exchange Salesforce common stock for Tableau shares. Salesforce is a global leader in customer relationship management, or CRM, technology that enables companies to improve their relationships and interactions with customers. Salesforce introduced its first CRM solution in 2000, and has since expanded its service offerings into new areas and industries with new editions, features and platform capabilities. Salesforce’s core mission is to empower its customers of every size and industry to connect with their customers in new ways through existing and emerging technologies, including cloud, mobile, social, Internet of Things and artificial intelligence. Salesforce’s Customer Success Platform—including sales force automation, customer service and support, marketing automation, digital commerce, community management, industry-specific solutions, analytics, integration solutions, application development, Internet of Things integration, collaborative productivity tools, its AppExchange, which is its enterprise cloud marketplace, and its professional cloud services—provides the tools customers need to succeed in a digital world.

On June 9, 2019, Salesforce, the Offeror and Tableau entered into an Agreement and Plan of Merger, which we refer to as the “merger agreement.”

What are the classes and amounts of Tableau securities that Salesforce is offering to acquire?

Salesforce is seeking to acquire all issued and outstanding shares of Tableau Class A common stock, par value $0.0001 per share, and Tableau Class B common stock, par value $0.0001 per share.

What will I receive for my Tableau shares?

Salesforce, through the Offeror, is offering to exchange for each outstanding share of Tableau Class A common stock and Tableau Class B common stock validly tendered and not validly withdrawn in the offer, 1.103 shares of Salesforce common stock, par value $0.001 per share, together with cash in lieu of any fractional shares of Salesforce common stock (which we refer to as the “transaction consideration”), without interest and subject to reduction for any applicable withholding taxes.

If you do not tender your shares into the offer but the merger is completed (pursuant to Section 251(h) of the DGCL without a stockholder vote), you will also receive the transaction consideration in exchange for your shares of Tableau common stock.

What is the difference between Tableau Class A common stock and Tableau Class B common stock? Are they to be exchanged for the same consideration pursuant to the Offer? Will shares of Tableau Class B common stock convert into shares of Tableau Class A common stock in the offer?

Under Tableau’s amended and restated certificate of incorporation (which we refer to as the “Tableau charter”), each share of Tableau Class A common stock entitles the holder to one vote while each share of Tableau Class B

 

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common stock generally entitles the holder to 10 votes. Each share of Tableau Class B common stock is convertible at any time at the option of the holder into one share of Tableau Class A common stock. In addition, each share of Tableau Class B common stock will convert automatically into one share of Tableau Class A common stock upon any transfer, whether or not for value, subject to certain exceptions set forth in the Tableau charter (none of such exceptions being applicable to the consummation of the offer). Accordingly, shares of Tableau Class B common stock that are validly tendered (and not validly withdrawn) in the offer will automatically convert, on a one-to-one basis, into Tableau Class A common stock upon the consummation of the offer.

If the offer is successfully completed, holders of shares of Tableau Class A common stock and Tableau Class B common stock that validly tender (and do not validly withdraw) their shares into the offer will both receive the same transaction consideration. In the merger, each outstanding share of Tableau Class A common stock and Tableau Class B common stock (other than certain converted or cancelled shares, as described further in this document) that were not acquired by the Offeror in the offer will be converted into the right to receive the same transaction consideration.

See “The Offer—Tableau Class A Common Stock and Tableau Class B Common Stock.”

What will happen to my Tableau stock options?

The offer is made only for shares of Tableau common stock and is not made for any options to purchase shares of Tableau common stock (each, a “Tableau option”). If you hold a Tableau option that is vested and exercisable, you may, in accordance with the terms and conditions governing such Tableau option, and subject to Tableau’s insider trading policy and any applicable blackout period(s), exercise the Tableau option for shares of Tableau common stock and thereafter participate in the offer, subject to the terms and conditions governing the offer. Any Tableau options that remain outstanding as of the effective time of the merger will be treated in accordance with the merger agreement.

At the effective time of the merger (which we refer to as the “effective time”), each option to purchase shares of Tableau common stock that is outstanding and unexercised immediately prior to the effective time (each, a “Tableau option”) (whether vested or unvested) held by any former employee of Tableau will be cancelled and converted into the right to receive the transaction consideration in respect of each “net share” covered by such Tableau option, where “net share” means the quotient obtained by dividing (a) the product of (1) the excess, if any, of the “per share cash equivalent consideration” (defined below) over the per share exercise price applicable to the Tableau option, multiplied by (2) the number of shares subject to the Tableau option immediately prior to the effective time, by (b) the per share cash equivalent consideration, less applicable tax withholdings. As used in the offer to exchange, the “per share cash equivalent consideration” means the product (rounded to the nearest cent) obtained by multiplying (i) the exchange ratio by (ii) the Salesforce trading price. 

At the effective time, each Tableau option not held by a former employee of Tableau at the effective time will be assumed and automatically converted into an option to purchase the number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau option immediately prior to the effective time by the exchange ratio (each, an “adjusted option”). Each adjusted option will have an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per share exercise price of the Tableau option by the exchange ratio and will otherwise be subject to the same terms and conditions as were applicable to such Tableau option prior to the effective time.

As used in these questions and answers, (1) the “Salesforce trading price” means the volume weighted average closing price of Salesforce common stock as reported on the NYSE for the ten consecutive trading day period ending on the trading day immediately prior to the acceptance time, and (2) the “exchange ratio” means 1.103.

See “Merger Agreement—Treatment of Tableau Equity Awards.”

 

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What will happen to my Tableau restricted stock units and performance share units?

The offer is made only for shares of Tableau common stock and is not made for any restricted stock units or performance share units relating to shares of Tableau common stock (which we refer to as “Tableau RSU awards” and “Tableau PSU awards,” respectively). Any Tableau RSU awards and Tableau PSU awards that remain outstanding as of the effective time of the merger will be treated in accordance with the merger agreement.

At the effective time, each Tableau RSU award that is outstanding immediately prior to the effective time held by a non-employee director of Tableau will vest as of the effective time and will be cancelled and converted into the right to receive the transaction consideration in respect of each share of Tableau common stock subject to such Tableau RSU award.

At the effective time, each Tableau RSU award held by an individual who is not a non-employee director of Tableau at the effective time will be assumed and automatically converted into a restricted stock unit, on the same terms and conditions as were applicable to such Tableau RSU award prior to the effective time, with respect to a number of shares of Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau RSU award by the exchange ratio. Each converted Tableau RSU award will be subject to the same terms and conditions as were applicable to such Tableau RSU award prior to the effective time, except that it will vest after the effective time solely based on continued service to Salesforce and its affiliates.

At the effective time, each Tableau PSU award that is outstanding immediately prior to the effective time will be assumed and automatically converted into a restricted stock unit with respect to a number of shares of Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau PSU award by the exchange ratio; provided that the number of shares of Tableau common stock subject to a Tableau PSU award equals the number of shares that would have vested based on the achievement of performance at target levels. Each converted Tableau PSU award will be subject to the same terms and conditions as were applicable to such Tableau PSU award prior to the effective time, except that it will vest after the effective time solely based on continued service to Salesforce and its affiliates.

See “Merger Agreement—Treatment of Tableau Equity Awards.”

What will happen to the Tableau Employee Stock Purchase Plan?

Any Tableau employee who is not a participant in the ESPP as of the date of the merger agreement may not become a participant in any offering periods in effect under the ESPP as of the date of the merger agreement (the “current ESPP offering periods”) and no participant may increase the percentage of his or her payroll deduction election from that in effect on the date of the merger agreement for such current ESPP offering periods. If the current ESPP offering periods terminate prior to the effective time, then the ESPP will be suspended and no new offering period will commence under the ESPP prior to the termination of the merger agreement. If any current ESPP offering period is still in effect at the effective time, then the last day of such current ESPP offering period will be accelerated to a date prior to the closing date as specified by the Tableau board of directors. Subject to the consummation of the merger, the ESPP will terminate effective immediately prior to the effective time.

See “Merger Agreement—Treatment of Tableau Equity Awards.”

Will I have to pay a fee or commission to exchange my shares of Tableau common stock?

If you are the record owner of your shares of Tableau common stock and you tender these shares in the offer, you will not have to pay any brokerage fees, commissions or similar expenses. If you own your shares of Tableau common stock through a broker, dealer, commercial bank, trust company or other nominee and your broker,

 

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dealer, commercial bank, trust company or other nominee tenders your Tableau shares on your behalf, your broker or such other nominee may charge a fee for doing so. You should consult with your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply.

Why is Salesforce making this offer?

The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares, and the merger is the second step in such plan.

In the offer, if a sufficient number of Tableau shares are tendered into the offer prior to the expiration time of the offer such that Salesforce and the Offeror will own at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer, subject to the satisfaction or waiver of the other conditions to the offer, Salesforce and the Offeror will accept for exchange, and will exchange, the shares tendered in the offer. Then, thereafter and as the second step in Salesforce’s plan to acquire all of the outstanding Tableau shares, Salesforce intends to promptly consummate a merger of the Offeror with and into Tableau, with Tableau surviving the merger (which we refer to as the “merger”). The purpose of the merger is for Salesforce to acquire all remaining Tableau shares that it did not acquire in the offer. Upon consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former stockholders of Tableau will no longer have any direct ownership interest in the surviving corporation. If the offer is completed (such that Salesforce and the Offeror will own at least a majority of the aggregate voting power of the outstanding shares of Tableau common stock), the merger will be governed by Section 251(h) of the DGCL, and accordingly, no stockholder vote will be required to consummate the merger.

What does the Tableau board of directors recommend?

The board of directors of Tableau has unanimously (i) determined that the terms of the merger agreement and the transactions contemplated by the merger agreement, including the offer, the merger and the issuance of Salesforce shares in connection therewith, are fair to, and in the best interests of, Tableau and its stockholders; (ii) determined that it is in the best interests of Tableau and its stockholders and declared it advisable to enter into the merger agreement; (iii) approved the execution and delivery by Tableau of the merger agreement, the performance by Tableau of its covenants and agreements contained in the merger agreement and the consummation of the offer, the merger and the other transactions contemplated by the merger agreement upon the terms and subject to the conditions contained in the merger agreement; and (iv) resolved to recommend that the stockholders of Tableau accept the offer and tender their shares of Tableau common stock to the Offeror pursuant to the offer.

See “The Offer—Tableau’s Reasons for the Offer and the Merger; Recommendation of the Tableau Board of Directors,” for more information. A description of the reasons for this recommendation is also set forth in Tableau’s Solicitation/Recommendation Statement on Schedule 14D-9 (which we refer to as the “Schedule 14D-9”), which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.

What are the most significant conditions of the offer?

The offer is conditioned upon, among other things, the following:

 

   

Minimum Tender Condition—Tableau stockholders having validly tendered and not validly withdrawn in accordance with the terms of the offer and prior to the expiration of the offer a number of shares of Tableau common stock that, upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn), will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together

 

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with any shares of Tableau common stock then owned by Salesforce and the Offeror, would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer (which we refer to as the “minimum tender condition”);

 

   

Regulatory Approvals—Any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (which we refer to as the “HSR Act”) having expired or been terminated, and any required pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany having been obtained;

 

   

Effectiveness of Form S-4—The registration statement on Form S-4, of which this document is a part, having become effective under the U.S. Securities Act of 1933, as amended (which we refer to as the “Securities Act”), and not being the subject of any stop order or proceeding seeking a stop order;

 

   

No Legal Prohibition—No governmental entity of competent jurisdiction having (i) enacted, issued or promulgated any law on or after June 9, 2019 (and there not having been any change on or after June 9, 2019 in the manner in which any governmental entity enforces or interprets any law enacted, issued or promulgated prior to June 9, 2019) that is in effect as of immediately prior to the expiration of the offer or (ii) issued or granted any order or injunctions (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the expiration of the offer, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the offer or the merger;

 

   

Listing of Salesforce Shares—The Salesforce shares to be issued in the offer and the merger having been approved for listing on the NYSE, subject to official notice of issuance;

 

   

No Tableau Material Adverse Effect—There not having occurred any change, effect, development, circumstance, condition, state of facts, event or occurrence since the date of the merger agreement that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations of Tableau and its subsidiaries, taken as a whole (with such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”), and that is continuing as of immediately prior to the expiration of the offer;

 

   

Accuracy of Tableau’s Representations and Warranties—The representations and warranties of Tableau contained in the merger agreement being true and correct as of the expiration date of the offer, subject to specified materiality standards; and

 

   

Tableau’s Compliance with Covenants—Tableau having performed or complied in all material respects with the covenants and agreements required to be performed or complied with by it under the merger agreement prior to the expiration of the offer.

The offer is subject to certain other conditions set forth below in the section entitled “The Offer—Conditions of the Offer.” The conditions to the offer are for the sole benefit of Salesforce and the Offeror and may be asserted by Salesforce or the Offeror regardless of the circumstances giving rise to any such condition, or may be waived by Salesforce or the Offeror, by express and specific action to that effect, in whole or in part at any time and from time to time, in each case, prior to the expiration of the offer. However, certain specified conditions (including all of the conditions noted above other than the conditions related to a material adverse effect of Tableau, accuracy of Tableau’s representations and Tableau’s compliance with covenants) may not be waived by Salesforce or the Offeror without the consent of Tableau (which may be granted or withheld in its sole discretion). There is no financing condition to the offer.

How long will it take to complete the proposed transaction?

The transaction is expected to be completed during Salesforce’s fiscal third quarter ending October 31, 2019, subject to the satisfaction or waiver of the conditions described in “The Offer—Conditions of the Offer” and “Merger Agreement—Conditions of the Merger.”

 

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How long do I have to decide whether to tender my Tableau shares in the offer?

The offer is scheduled to expire at midnight, Eastern Time, at the end of July 31, 2019, unless extended or terminated in accordance with the merger agreement. Any extension, delay, termination, waiver or amendment of the offer will be followed as promptly as practicable by public announcement thereof to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. During any such extension, all Tableau shares previously tendered and not validly withdrawn will remain subject to the offer, subject to the rights of a tendering stockholder to withdraw such stockholder’s shares. “Expiration date” means midnight, Eastern Time, at the end of July 31, 2019, unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term “expiration date” means the latest time and date at which the offer, as so extended by the Offeror, will expire.

Under the merger agreement, unless Tableau consents otherwise (which may be granted or withheld in its sole discretion) or the merger agreement is terminated:

 

   

the Offeror must extend the offer for any period required by any law, or by any rule, regulation, interpretation or position of the SEC or its staff or the NYSE applicable to the offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or to the offer documents or the registration statement on Form S-4 of which this document is a part;

 

   

in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided that such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived in accordance with the merger agreement as of any then-scheduled expiration of the offer, the Offeror must extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and

 

   

if, as of any then-scheduled expiration of the offer, each condition to the offer (other than the minimum tender condition, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived in accordance with the merger agreement and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau must, extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or have been tendered but validly withdrawn, in the offer as of such time, and (y) as of such time the founders whose untendered shares are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares into the offer; or (ii) for more than 20 business days in the aggregate.

The Offeror is not required to extend the offer beyond October 9, 2019 (subject to extension to January 9, 2020 in certain circumstances described under “Merger Agreement—Termination of the Merger Agreement”), which we refer to as the “outside date.”

Upon the terms and subject to the satisfaction or waiver of the conditions of the offer (including, if the offer is extended or amended, the terms and conditions of any extension or amendment), promptly after the expiration of the offer, the Offeror will accept for payment, and will pay for, all Tableau shares validly tendered and not validly withdrawn prior to the expiration of the offer.

 

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Any decision to extend the offer will be made public by an announcement regarding such extension as described under “The Offer—Extension, Termination and Amendment of the Offer.”

How do I tender my Tableau shares?

All Tableau shares are held in electronic book entry form.

To validly tender Tableau shares held of record, Tableau stockholders must deliver a properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents for tendered Tableau shares to American Stock Transfer and Trust Company, LLC, the depositary and exchange agent (which we refer to as the “exchange agent”) for the offer and the merger, not later than the expiration date. The letter of transmittal is enclosed with this document.

If your shares of Tableau Class A common stock are held in “street name” (i.e., through a broker, dealer, commercial bank, trust company or other nominee), these shares of Tableau Class A common stock may be tendered by your nominee by book-entry transfer through The Depository Trust Company. To validly tender such shares held in street name, Tableau stockholders should instruct such nominee to do so prior to the expiration of the offer. No shares of Tableau Class B common stock are held in “street name.”

We are not providing for guaranteed delivery procedures and therefore you must allow sufficient time for the necessary tender procedures to be completed during normal business hours of The Depository Trust Company prior to the expiration date. Tenders received by the exchange agent after the expiration date will be disregarded and of no effect. In all cases, you will receive your consideration for your tendered Tableau shares only after timely receipt by the exchange agent of either a confirmation of a book-entry transfer of such shares if your shares are held in “street name” or a properly completed and duly executed letter of transmittal if your shares are held of record, in each case, together with any other required documents.

For a complete discussion of the procedures for tendering your Tableau shares, see “The Offer—Procedure for Tendering.”

Until what time can I withdraw tendered Tableau shares?

You may withdraw your previously tendered Tableau shares at any time before the offer has expired and, if the Offeror has not accepted your Tableau shares for payment by September 1, 2019, you may withdraw them at any time on or after that date until the Offeror accepts shares for payment. If you validly withdraw your previously tendered Tableau shares, you will receive shares of the same class of Tableau common stock that you tendered. Once the Offeror accepts your tendered Tableau shares for payment upon or after expiration of the offer, however, you will no longer be able to withdraw them. For a complete discussion of the procedures for withdrawing your Tableau shares, see “The Offer—Withdrawal Rights.”

How do I withdraw previously tendered Tableau shares?

To withdraw previously tendered Tableau shares, you must deliver a written notice of withdrawal with the required information to the exchange agent at any time at which you have the right to withdraw shares. If you tendered Tableau shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct such broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your Tableau shares and such broker, dealer, commercial bank, trust company or other nominee must effectively withdraw such Tableau shares at any time at which you have the right to withdraw shares. If you validly withdraw your previously tendered Tableau shares, you will receive shares of the same class of Tableau common stock that you tendered. For a discussion of the procedures for withdrawing your Tableau shares, including the applicable deadlines for effecting withdrawals, see “The Offer—Withdrawal Rights.”

 

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When and how will I receive the transaction consideration in exchange for my tendered Tableau shares?

The Offeror will exchange all validly tendered and not validly withdrawn Tableau shares promptly after the expiration date of the offer, subject to the terms thereof and the satisfaction or waiver of the conditions to the offer, as set forth in “The Offer—Conditions of the Offer.” The Offeror will deliver the transaction consideration for your validly tendered and not validly withdrawn shares through the exchange agent, which will act as your agent for the purpose of receiving the transaction consideration from the Offeror and transmitting such consideration to you. In all cases, you will receive your transaction consideration for your tendered Tableau shares only after timely receipt by the exchange agent of either a confirmation of a book-entry transfer of such shares (as described in “The Offer—Procedure for Tendering”) or a properly completed and duly executed letter of transmittal, in each case, together with any other required documents.

Why does the cover page to this document state that this offer is preliminary and subject to change, and that the registration statement filed with the SEC is not yet effective? Does this mean that the offer has not commenced?

No. Completion of this document and effectiveness of the registration statement are not necessary to commence this offer. The offer was commenced on the date of the initial filing of the registration statement on Form S-4 of which this document is a part. Salesforce and the Offeror cannot, however, accept for exchange any Tableau shares tendered in the offer or exchange any shares until the registration statement is declared effective by the SEC and the other conditions to the offer have been satisfied or waived (subject to the terms and conditions of the merger agreement).

What happens if I do not tender my Tableau shares?

If, after consummation of the offer, Salesforce and the Offeror own a majority of the aggregate voting power of the outstanding Tableau shares (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), Salesforce will (subject to the satisfaction or waiver of the conditions set forth in the merger agreement) promptly complete the merger after the consummation of the offer.

Upon consummation of the merger, each Tableau share that has not been tendered and accepted for exchange in the offer, other than Tableau shares owned by Tableau, Salesforce, the Offeror or any wholly owned subsidiary of Salesforce or Tableau, will be converted in the merger into the right to receive the transaction consideration. See “Merger Agreement—Exchange of Tableau Book-Entry Shares for the Transaction Consideration.”

Does Salesforce have the financial resources to complete the offer and the merger?

Yes. The transaction consideration will consist of Salesforce shares. The offer and the merger are not conditioned upon any financing arrangements or contingencies.

If the offer is completed, will Tableau continue as a public company?

No. Salesforce is required, on the terms and subject to the satisfaction or waiver of the conditions set forth in the merger agreement, to consummate the merger promptly following the acceptance of Tableau shares in the offer. If the merger takes place, Tableau will no longer be publicly traded. Even if for some reason the merger does not take place, if Salesforce and the Offeror purchase all Tableau shares validly tendered and not validly withdrawn, there may be so few remaining stockholders and publicly held shares that Tableau shares will no longer be eligible to be traded through the NYSE or other securities exchanges, there may not be an active public trading market for Tableau shares and Tableau may no longer be required to make filings with the SEC or otherwise comply with the SEC rules relating to publicly held companies.

 

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Will the offer be followed by a merger if all Tableau shares are not tendered in the offer?

Yes, unless the conditions to the merger are not satisfied or waived in accordance with the merger agreement. If the Offeror accepts for payment all Tableau shares validly tendered and not validly withdrawn pursuant to the offer, and the other conditions to the merger are satisfied or waived in accordance with the merger agreement, the merger will take place promptly thereafter. If the merger takes place, Salesforce will own 100% of the equity of Tableau, and all of the remaining Tableau stockholders, other than Tableau, Salesforce, the Offeror or any wholly owned subsidiary of Salesforce or Tableau, will have the right to receive the transaction consideration.

Because the merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the merger in the event that the offer is consummated. Salesforce is required, on the terms and subject to the satisfaction or waiver of the conditions set forth in the merger agreement, to consummate the merger as promptly as practicable following the consummation of the offer. As such, Salesforce does not expect there to be a significant period of time between the consummation of the offer and the consummation of the merger.

Do the officers and directors of Tableau have interests in the offer and the merger that are different from those of stockholders generally?

You should be aware that some of the officers and directors of Tableau may be deemed to have interests in the offer and the merger that are different from, or in addition to, your interests as a Tableau stockholder. These interests may include, among others, agreements that certain officers have entered into with Tableau that provide for the acceleration of stock options and restricted stock units in the event the officer experiences a qualifying termination of employment within a specified period following a change of control of Tableau, payments of severance benefits under Tableau’s change in control severance agreements with executive officers, agreements that certain executive officers have entered into with Salesforce that provide for grants of Salesforce equity awards following the effective time and certain indemnification obligations. See “The Offer—Interests of Certain Persons in the Offer and the Merger” and “Merger Agreement—Employee Matters” below for more information.

As of June 24, 2019, the directors and executive officers of Tableau and their affiliates beneficially owned approximately 10,500,460 Tableau shares, representing approximately 12.0% of the Tableau shares outstanding as of June 24, 2019.

Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, entered into a letter agreement with Salesforce and the Offeror, solely in their capacities as stockholders of Tableau, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock, which in the aggregate represent approximately 11.8% of the outstanding shares of Tableau common stock, prior to the expiration of the offer. For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and such letter agreement, which is filed as Exhibit 10.25 to this document.

See also “Item 3—Past Contacts, Transactions, Negotiations and Agreements” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.

What are the material U.S. federal income tax consequences of receiving Salesforce stock in exchange for my Tableau shares in the offer or the merger?

Each of Tableau and Salesforce intends the offer and the merger, taken together, to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). However, completion of the offer and the merger is not conditioned upon receipt of an opinion from counsel that the offer and the merger qualify as a reorganization, and the offer and the merger will occur even if they do not so qualify.

 

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In general and subject to the qualifications and limitations set forth in the section titled “Material U.S. Federal Income Tax Consequences,” if the offer and the merger, taken together, qualify as a reorganization within the meaning of Section 368(a) of the Code, stockholders of Tableau are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of Tableau common stock for shares of Salesforce common stock in the offer or merger, except with respect to any cash received in lieu of fractional shares of Salesforce common stock.

Each Tableau stockholder should read the discussion under “Material U.S. Federal Income Tax Consequences” for a more complete discussion of the U.S. federal income tax consequences of the offer and the merger (including the U.S. federal income tax consequences of the receipt of cash in lieu of a fractional share of Salesforce stock). Tax matters can be complicated, and the tax consequences of the offer and the merger to a particular Tableau stockholder will depend on such stockholder’s particular facts and circumstances. Tableau stockholders should consult their own tax advisors to determine the specific consequences to them of exchanging their shares of Tableau common stock for the transaction consideration pursuant to the offer or the merger.

Will I have the right to have my Tableau shares appraised?

Appraisal rights are not available in connection with the offer or the merger. See “The Offer—No Appraisal Rights.”

Whom should I call if I have questions about the offer?

You may call Morrow Sodali LLC, the information agent, toll free at (800) 662-5200 or contact the information agent via e-mail at DATA@morrowsodali.com.

Where can I find more information about Salesforce and Tableau?

You can find more information about Salesforce and Tableau from various sources described in the section of this document entitled “Where to Obtain More Information.”

 

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SUMMARY

This section summarizes material information presented in greater detail elsewhere in this document. However, this summary does not contain all of the information that may be important to Tableau stockholders. You are urged to carefully read the remainder of this document and the related letter of transmittal, the annexes to this document and the other information referred to or incorporated by reference in this document because the information in this section and in the “Questions and Answers About the Offer and the Merger” section is not complete. See “Where to Obtain More Information.”

The Offer and Transaction Consideration (Page 37)

Salesforce, through its indirect wholly owned subsidiary, the Offeror, is offering, upon the terms and subject to the conditions set forth in this document and in the accompanying letter of transmittal, to exchange for each outstanding share of Tableau Class A common stock and Tableau Class B common stock validly tendered and not validly withdrawn in the offer, 1.103 shares of Salesforce common stock, together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.

We refer to the above as the “transaction consideration.”

Tableau stockholders will not receive any fractional shares of Salesforce common stock in the offer or the merger, and each Tableau stockholder that otherwise would be entitled to receive a fraction of a share of Salesforce common stock pursuant to the offer or the merger will be paid an amount in cash (without interest) equal to such fractional part of a share of Salesforce common stock, multiplied by the volume weighted average closing sale price of one share of Salesforce common stock as reported on the NYSE for the 10 consecutive trading days ending on and including the trading day immediately preceding the acceptance of tendered Tableau shares in the offer, rounded to the nearest whole cent. See “Merger Agreement—Fractional Shares.”

Purpose of the Offer and the Merger (Page 65)

The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares, and the merger is the second step in such plan. If the offer is completed, tendered Tableau shares will be exchanged for the transaction consideration, and if the merger is completed, any remaining Tableau shares that were not tendered into the offer (other than certain converted or cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer.

Upon the consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former Tableau stockholders will no longer have any direct ownership interest in such entity.

Salesforce expects to consummate the merger promptly after the consummation of the offer in accordance with Section 251(h) of the DGCL, and no stockholder vote to adopt the merger agreement or any other action by the Tableau stockholders will be required in connection with the merger. See “The Offer—Purpose of the Offer and the Merger.”

Letter Agreement (Page 107)

Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, entered into a letter agreement with Salesforce and the Offeror



 

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(which we refer to as the “letter agreement”). Subject to the terms and conditions of the letter agreement, they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock prior to the expiration of the offer, subject to certain terms and conditions.

The letter agreement terminates upon certain events, including the termination of the merger agreement in accordance with its terms.

The Tableau shares subject to the letter agreement represent approximately 11.8% of the outstanding shares of Tableau common stock as of June 24, 2019. The co-founders have also conveyed to both Salesforce and Tableau that they intend to tender into the offer.

For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and the letter agreement, which is filed as Exhibit 10.25 to this document.

The Companies (Page 36)

Salesforce

salesforce.com, inc.

Salesforce Tower

415 Mission Street, 3rd Floor

San Francisco, California 94105

(415) 901-7000

Salesforce, a Delaware corporation, is a global leader in customer relationship management, or CRM, technology that enables companies to improve their relationships and interactions with customers. Salesforce introduced its first CRM solution in 2000, and has since expanded its service offerings into new areas and industries with new editions, features and platform capabilities. Salesforce’s core mission is to empower its customers of every size and industry to connect with their customers in new ways through existing and emerging technologies, including cloud, mobile, social, Internet of Things and artificial intelligence. Salesforce’s Customer Success Platform—including sales force automation, customer service and support, marketing automation, digital commerce, community management, industry-specific solutions, analytics, integration solutions, application development, Internet of Things integration, collaborative productivity tools, its AppExchange, which is its enterprise cloud marketplace, and its professional cloud services—provides the tools customers need to succeed in a digital world.

The Offeror

Sausalito Acquisition Corp.

c/o salesforce.com, inc.

Salesforce Tower

415 Mission Street, 3rd Floor

San Francisco, California 94105

The Offeror, a Delaware corporation, is an indirect wholly owned subsidiary of Salesforce. The Offeror is newly formed, and was organized for the purpose of making the offer and consummating the merger. The Offeror has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the offer and the merger. The Offeror’s address is c/o salesforce.com, inc., Salesforce Tower, 415 Mission Street, 3rd Floor, San Francisco, California 94105.



 

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Tableau

Tableau Software, Inc.

1621 North 34th Street

Seattle, Washington 98103

(206) 633-3400

Tableau, a Delaware corporation, puts the power of data into the hands of everyday people with its software products, allowing a broad population of business users to engage with their data, ask questions, solve problems and create value. Based on innovative core technologies originally developed at Stanford University, Tableau’s products reduce the complexity, inflexibility and expense associated with traditional business intelligence applications. Tableau currently offers five key products: Tableau Desktop, a self-service, powerful analytics product for anyone with data; Tableau Server, a business intelligence platform for organizations; Tableau Online, a hosted software-as-a-service (“SaaS”) version of Tableau Server; Tableau Prep, a data preparation product for combining, shaping and cleaning data; and Tableau Public, a free cloud-based platform for analyzing and sharing public data.

Salesforce’s Reasons for the Offer and the Merger (Page 47)

The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The Offeror is making the offer and Salesforce plans to complete the merger because it believes that the acquisition of Tableau by Salesforce will provide significant long-term growth prospects and increased stockholder value for the combined company, including as a result of the substantial anticipated synergies resulting from the acquisition.

Opinion of Tableau’s Financial Advisor (Page 52)

Tableau has retained Goldman Sachs & Co. LLC (which we refer to as “Goldman Sachs”), to act as its financial advisor in connection with the transactions contemplated by the merger agreement. Goldman Sachs delivered its opinion to the Tableau board of directors that, as of the date of the written fairness opinion and based upon and subject to the factors and assumptions set forth therein, the transaction consideration per share to be paid to the holders (other than Salesforce and its affiliates) of Tableau shares, taken in the aggregate, pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated June 9, 2019, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this document and is incorporated into this document by reference. You should read the opinion carefully in its entirety.

The Goldman Sachs opinion was provided to the Tableau board of directors and addresses only, as of the date of the opinion, based upon and subject to the factors and assumptions set forth therein, the fairness from a financial point of view of the transaction consideration to be paid to the Tableau stockholders (other than Salesforce and its affiliates), taken in the aggregate, pursuant to the merger agreement. The Goldman Sachs opinion does not constitute a recommendation as to whether or not any holder of Tableau shares should tender such Tableau shares in connection with the offer or any other matter.

The engagement letter between Tableau and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $82 million, all of which is contingent upon consummation of the transactions. In addition, Tableau has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.



 

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Expiration of the Offer (Page 59)

The offer is scheduled to expire at midnight, Eastern Time, at the end of July 31, 2019, unless extended or terminated in accordance with the merger agreement. “Expiration date” means midnight, Eastern Time, at the end of July 31, 2019 unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term “expiration date” means the latest time and date at which the offer, as so extended by the Offeror, will expire.

Extension, Termination and Amendment of the Offer (Page 60)

Subject to the provisions of the merger agreement and the applicable rules and regulations of the SEC, and unless Tableau consents otherwise (which may be granted or withheld in its sole discretion) or the merger agreement is otherwise terminated:

 

   

the Offeror must extend the offer for any period required by any law, or by any rule, regulation, interpretation or position of the SEC or its staff or the NYSE applicable to the offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or to the offer documents or the registration statement on Form S-4, of which this document is a part;

 

   

in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided that such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived in accordance with the merger agreement as of any then-scheduled expiration of the offer, the Offeror must extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and

 

   

if, as of any then-scheduled expiration of the offer each condition to the offer (other than the minimum tender condition, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived in accordance with the merger agreement and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau must, extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or have been tendered but validly withdrawn, in the offer as of such time and (y) as of such time the founders whose untendered shares are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares into the offer; or (ii) for more than 20 business days in the aggregate.

The Offeror may not terminate or withdraw the offer prior to the then-scheduled expiration of the offer unless the merger agreement is validly terminated in accordance with its terms, in which case the Offeror will terminate the offer promptly (but in no event more than one business day) after such termination. Among other circumstances, the merger agreement may be terminated by either Salesforce or Tableau if the offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Salesforce or the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer, or if the acceptance for exchange of Tableau shares tendered in the offer has not occurred on or before October 9, 2019 (subject to extension to January 9, 2020 in certain circumstances described under



 

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“Merger Agreement—Termination of the Merger Agreement”), which we refer to as the “outside date.” See “Merger Agreement—Termination of the Merger Agreement.”

The Offeror will effect any extension, termination, amendment or delay by giving oral or written notice to the exchange agent and by making a public announcement as promptly as practicable thereafter as described under “The Offer—Extension, Termination and Amendment of the Offer.” In the case of an extension, any such announcement will be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”), which require that any material change in the information published, sent or given to stockholders in connection with the offer be promptly disseminated to stockholders in a manner reasonably designed to inform them of such change) and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror assumes no obligation to publish, advertise or otherwise communicate any such public announcement of this type, other than by issuing (or having Salesforce issue) a press release. During any extension, Tableau shares previously tendered and not validly withdrawn will remain subject to the offer, subject to the right of each Tableau stockholder to withdraw previously tendered Tableau shares.

No subsequent offering period will be available following the expiration of the offer without the prior written consent of Tableau, other than in accordance with the extension provisions set forth in the merger agreement.

Conditions of the Offer (Page 69)

The offer is subject to certain conditions, including, among others:

 

   

satisfaction of the minimum tender condition (which requires that, prior to the expiration of the offer, there have been validly tendered and not validly withdrawn a number of Tableau shares that, upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together with Tableau shares then owned by Salesforce and the Offeror (if any), would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer);

 

   

expiration or termination of the waiting period applicable to the transactions contemplated by the merger agreement under the HSR Act and the obtaining of any required pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany;

 

   

lack of legal prohibitions;

 

   

the effectiveness of the registration statement on Form S-4 of which this document is a part;

 

   

the listing of the Salesforce shares to be issued in the offer and the merger on the NYSE, subject to official notice of issuance;

 

   

the accuracy of Tableau’s representations and warranties made in the merger agreement, subject to specified materiality standards;

 

   

Tableau being in compliance in all material respects with its covenants under the merger agreement;

 

   

no material adverse effect (as described in “Merger Agreement—Material Adverse Effect”) having occurred with respect to Tableau since the date of the merger agreement that is continuing as of immediately prior to the expiration of the offer; and

 

   

the merger agreement not having been terminated in accordance with its terms.

The offer is subject to certain other conditions set forth in the section below entitled “The Offer—Conditions of the Offer.” Subject to applicable SEC rules and regulations, the Offeror also reserves the right prior to the



 

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expiration of the offer, in its sole discretion, at any time or from time to time to waive any condition identified as subject to waiver in “The Offer—Conditions of the Offer” by giving oral or written notice of such waiver to the exchange agent. However, certain specified conditions (including the first five conditions and the last condition in the immediately preceding list) may only be waived by Salesforce or the Offeror with the prior written consent of Tableau (which may be granted or withheld in its sole discretion).

The offer and the merger are not conditioned upon any financing arrangements or contingencies.

Withdrawal Rights (Page 62)

Tendered Tableau shares may be withdrawn at any time prior to the expiration of the offer. Additionally, if the Offeror has not agreed to accept the shares for exchange on or prior to September 1, 2019, Tableau stockholders may thereafter withdraw their shares from the offer at any time after such date until the Offeror accepts the shares for exchange. Any Tableau stockholder that validly withdraws previously tendered Tableau shares will receive shares of the same class of Tableau common stock that were tendered. Once the Offeror accepts shares for exchange pursuant to the offer, all tenders not previously withdrawn become irrevocable.

Procedure for Tendering (Page 62)

All Tableau shares are held in electronic book entry form.

To validly tender Tableau shares held of record, Tableau stockholders must deliver a properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents to the exchange agent at its address set forth elsewhere in this document, and must follow the other procedures set forth herein, prior to the expiration of the offer.

Tableau stockholders who hold shares of Tableau Class A common stock in “street name” through a bank, broker or other nominee holder, and desire to tender their shares of Tableau Class A common stock pursuant to the offer, should instruct the nominee holder to do so prior to the expiration of the offer. No shares of Tableau Class B common stock are held in “street name.”

Exchange of Shares; Delivery of Salesforce Shares (Page 61)

Upon the terms and subject to the satisfaction or waiver of the conditions of the offer (including, if the offer is extended or amended, the terms and conditions of any extension or amendment), promptly after the expiration of the offer, the Offeror will accept for payment, and will pay for, all Tableau shares validly tendered and not validly withdrawn prior to the expiration of the offer.

Regulatory Approvals (Page 70)

The completion of the offer is subject to the expiration or termination of the applicable waiting periods under the HSR Act and the obtaining of any required pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany. This requirement is discussed under “The Offer—Regulatory Approvals.”

Interests of Tableau Directors and Officers in the Offer and the Merger (Page 73)

You should be aware that some of the officers and directors of Tableau may be deemed to have interests in the offer and the merger that are different from, or in addition to, your interests as a Tableau stockholder. These interests may include, among others, agreements that certain officers have entered into with Tableau that provide for the acceleration of stock options and restricted stock units in the event the officer experiences a qualifying



 

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termination of employment within a specified period following a change of control of Tableau, payments of severance benefits under Tableau’s change in control severance agreements executive officers, agreements that certain executive officers have entered into with Salesforce that provide for grants of Salesforce equity awards following the effective time and certain indemnification obligations. See “The Offer—Interests of Certain Persons in the Offer and the Merger” and “Merger Agreement—Employee Matters” below for more information. As of June 24, 2019, the directors and executive officers of Tableau and their affiliates beneficially owned approximately 10,500,460 Tableau shares, representing approximately 12.0% of the Tableau shares outstanding as of June 24, 2019.

Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, entered into a letter agreement with Salesforce and the Offeror, solely in their capacities as stockholders of Tableau, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock, which in the aggregate represent approximately 11.8% of the outstanding shares of Tableau common stock, prior to the expiration of the offer. The co-founders have also conveyed to both Salesforce and Tableau that they intend to tender into the offer. For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and such letter agreement, which is filed as Exhibit 10.25 to this document.

See also “Item 3—Past Contacts, Transactions, Negotiations and Agreements” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.

No Appraisal Rights (Page 66)

No appraisal rights are available in connection with the offer or the merger. See “The Offer—No Appraisal Rights.”

Comparative Market Price and Dividend Matters (Page 109)

Salesforce common stock is listed on the NYSE under the symbol “CRM,” and Tableau Class A common stock is listed on the NYSE under the symbol “DATA.” There is no trading market for the shares of Tableau Class B common stock, which convert, on a one-for-one basis, into shares of Tableau Class A common stock at the election of the holder or, subject to certain exceptions (none of such exceptions being applicable to the consummation of the offer), if transferred by the holder to a third party.

The parties announced the execution of the merger agreement prior the opening of trading on June 10, 2019. On June 7, 2019, the trading day prior to the public announcement of the execution of the merger agreement and the release of media reports regarding the transaction, the closing price per share of Tableau Class A common stock on the NYSE was $125.21, and the closing price per share of Salesforce common stock on the NYSE was $161.27. On July 19, 2019, the most recent practicable trading date prior to the filing of this document, the closing price per share of Tableau Class A common stock on the NYSE was $172.59, and the closing price per share of Salesforce common stock on the NYSE was $156.75.

The market value of the stock consideration will change as the market value of Salesforce common stock fluctuates during the offer period and thereafter. Tableau stockholders should obtain current market quotations for shares of Tableau Class A common stock and Salesforce shares before deciding whether to tender their Tableau shares in the offer. See “Comparative Market Price and Dividend Matters.”

Ownership of Salesforce Shares After the Offer and the Merger (Page 67)

Salesforce estimates that former Tableau stockholders will own, in the aggregate, approximately 11.0% of the outstanding Salesforce shares immediately following the completion of the offer and the merger.



 

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For a detailed discussion of the assumptions on which this estimate is based, see “The Offer—Ownership of Salesforce After the Offer and the Merger.”

Comparison of Stockholders’ Rights (Page 128)

The rights of Salesforce stockholders are different in some respects from the rights of Tableau stockholders. Therefore, Tableau stockholders will have different rights as stockholders once they become Salesforce stockholders. The differences are described in more detail under “Comparison of Stockholders’ Rights.”

Material U.S. Federal Income Tax Consequences (Page 122)

Each of Tableau and Salesforce intends the offer and the merger, taken together, to qualify as a reorganization within the meaning of Section 368(a) of the Code. In general and subject to the qualifications and limitations set forth in the section titled “Material U.S. Federal Income Tax Consequences,” if the offer and the merger, taken together, qualify as a reorganization within the meaning of Section 368(a) of the Code, holders of Tableau shares are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of Tableau common stock for shares of Salesforce common stock in the offer or merger, except with respect to any cash received in lieu of fractional shares of Salesforce common stock.

Each Tableau stockholder should read the discussion under “Material U.S. Federal Income Tax Consequences” for a more complete discussion of the U.S. federal income tax consequences of the offer and the merger (including the U.S. federal income tax consequences of the receipt of cash in lieu of a fractional share of Salesforce common stock). Tax matters can be complicated, and the tax consequences of the offer and the merger to a particular Tableau stockholder will depend on such stockholder’s particular facts and circumstances. Tableau stockholders should consult their own tax advisors to determine the specific consequences to them of exchanging their shares of Tableau common stock for the transaction consideration pursuant to the offer or the merger.

Accounting Treatment (Page 83)

In accordance with United States generally accepted accounting principles (which we refer to as “GAAP”), Salesforce will account for the acquisition of shares through the offer and the merger under the acquisition method of accounting for business combinations.

Questions about the Offer and the Merger

Questions or requests for assistance or additional copies of this document may be directed to the information agent at the telephone number and addresses set forth below. Tableau stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the offer.

The Information Agent for the Offer is:

 

 

LOGO

509 Madison Avenue

Suite 1206

New York, NY 10022

Shareholders Call Toll Free: (800) 662-5200

Banks & Brokers Call Collect: (203) 658-9400

E-mail: DATA@morrowsodali.com



 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF SALESFORCE

The following table sets forth summary consolidated financial data of Salesforce. All references to “fiscal years,” unless otherwise noted, refer to the 12-month fiscal year.

The consolidated statement of operations data for the fiscal years ended January 31, 2019, 2018 and 2017, and the consolidated balance sheet data as of January 31, 2019 and 2018 are derived from, and are qualified by reference to, Salesforce’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2019, previously filed with the SEC on March 8, 2019 and incorporated by reference into this document. The consolidated statement of operations data for the fiscal years ended January 31, 2016 and 2015 and the consolidated balance sheet data as of April 30, 2018 and January 31, 2017, 2016, and 2015 are derived from Salesforce’s consolidated financial statements not included or incorporated by reference into this document. The selected historical consolidated financial data as of April 30, 2019 and for the three months ended April 30, 2019 and 2018, are derived from Salesforce’s unaudited consolidated financial statements and related notes contained in its Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2019, previously filed with the SEC on June 5, 2019 and incorporated by reference into this document.

The following selected historical consolidated financial data is only a summary and is not necessarily indicative of future results. Such financial data should be read together with, and is qualified in its entirety by reference to, Salesforce’s historical consolidated financial statements and the accompanying notes and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are set forth in Salesforce’s Annual Report on Form 10-K for the fiscal year ended January 31, 2019, previously filed with the SEC on March 8, 2019 and incorporated by reference into this document, and in Salesforce’s Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2019, previously filed with the SEC on June 5, 2019 and incorporated by reference in to this document.

The consolidated statement of operations data for fiscal 2019, 2018 and 2017 and for the three months ended April 30, 2019 and 2018 and the selected consolidated balance sheet data as of April 30, 2019 and 2018 and January 31, 2019, 2018 and 2017 reflect the retrospective adoption of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (“Topic 606”)”. The consolidated statement of operations data for fiscal 2019 and for the three months ended April 30, 2019 and 2018 and the selected consolidated balance sheet data as of April 30, 2019 and 2018 and January 31, 2019 reflect the prospective adoption of ASU No. 2016-01, “Financial Instruments-Overall (Subtopic 825-10)” (“ASU 2016-01”). The consolidated statement of operations data for the three months ended April 30, 2019 and the selected consolidated balance sheet data as of April 30, 2019 reflect the prospective adoption of ASU 2016-02, “Leases (Topic 842)”.



 

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    Three Months Ended
April 30,
    Fiscal Year Ended January 31,  
(in millions, except per share data)   2019     2018     2019     2018
(as adjusted)
    2017
(as adjusted)
    2016     2015  

Consolidated Statement of Operations Revenues:

           

Subscription and support

  $ 3,496     $ 2,810     $ 12,413     $ 9,766     $ 7,799     $ 6,205     $ 5,014  

Professional services and other

    241       196       869       774       638       462       360  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenue

  $ 3,737     $ 3,006     $ 13,282     $ 10,540     $ 8,437     $ 6,667     $ 5,374  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

  $ 210     $ 191     $ 535     $ 454     $ 218     $ 115     $ (146

Net income (loss)

  $ 392     $ 344     $ 1,110     $ 360     $ 323     $ (47   $ (263

Net income (loss) per share-basic and diluted:

           

Basic net income (loss) per share

  $ 0.51     $ 0.47     $ 1.48     $ 0.50     $ 0.47     $ (0.07   $ (0.42

Diluted net income (loss) per share

  $ 0.49     $ 0.46     $ 1.43     $ 0.49     $ 0.46     $ (0.07   $ (0.42

Shares used in computing basic net income (loss) per share

    771       729       751       715       688       662       624  

Shares used in computing diluted net income (loss) per share

    793       754       775       735       700       662       624  
    As of April 30,     As of January 31,  
(in millions)   2019     2018     2019     2018
(as adjusted)
    2017
(as adjusted)
    2016     2015  

Consolidated Balance Sheet Data:

             

Cash, cash equivalents and marketable securities(1)

  $ 6,379     $ 7,159     $ 4,342     $ 4,521     $ 2,209     $ 2,725     $ 1,890  

(Negative) working capital(2)

    (453     2,256       (572     (483     (1,013     90       (15

Total assets

    33,154       22,963       30,737       21,984       18,286       12,763       10,654  

Noncurrent debt and other noncurrent liabilities

    6,220       4,008       3,877       1,541       2,824       2,119       2,254  

Total liabilities

    16,708       11,903       15,132       11,608       10,056       7,760       6,690  

Retained earnings (accumulated deficit)

    2,127       969       1,735       635       275       (653     (606

Total stockholders’ equity

    16,446       11,060       15,605       10,376       8,230       5,003       3,975  

Footnotes

 

(1)

Excludes the restricted cash balance of $115.0 million as of January 31, 2015.

(2)

Salesforce considers all its marketable debt securities to be available to support current liquidity needs including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the consolidated balance sheets. For consistency in presentation, working capital in the table above as of January 31, 2016, and 2015 includes amounts previously reported in Marketable securities, noncurrent. In addition, other reclassifications were made to balances as of January 31, 2018, 2017, 2016, and 2015 to conform to the current period presentation.



 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF TABLEAU

The following table sets forth summary consolidated financial data of Tableau.

The consolidated statement of operations data for the years ended December 31, 2018, 2017 and 2016, and the consolidated balance sheet data as of December 31, 2018 and 2017 are derived from, and are qualified by reference to, Tableau’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018, previously filed with the SEC on February 22, 2019 and incorporated by reference into this document. The consolidated statement of operations data for the years ended December 31, 2015 and 2014 and the consolidated balance sheet data as of March 31, 2018 and December 31, 2016, 2015, and 2014 are derived from Tableau’s consolidated financial statements not included or incorporated by reference into this document. The selected historical consolidated financial data as of March 31, 2019 and for the three months ended March 31, 2019 and 2018, are derived from Tableau’s unaudited consolidated financial statements and related notes contained in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, previously filed with the SEC on May 6, 2019 and incorporated by reference into this document.

The following selected historical consolidated financial data is only a summary and is not necessarily indicative of future results. Such financial data should be read together with, and is qualified in its entirety by reference to, Tableau’s historical consolidated financial statements and the accompanying notes and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are set forth in Tableau’s Annual Report on Form 10-K for the year ended December 31, 2018, previously filed with the SEC on February 22, 2019 and incorporated by reference into this document, and in Tableau’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, previously filed with the SEC on May 6, 2019 and incorporated by reference in to this document.



 

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The consolidated statement of operations data for fiscal 2018 and for the three months ended March 31, 2019 and 2018 and the selected consolidated balance sheet data as of March 31, 2019 2018, and December 31, 2018 reflect the modified retrospective adoption of Topic 606. The consolidated statement of operations data for the three months ended March 31, 2019 and the selected consolidated balance sheet data as of March 31, 2019 reflect the prospective adoption of Topic 842.

 

    Three Months Ended
March 31,
    Year Ended December 31,  
    2019     2018     2018     2017     2016     2015     2014  
(in thousands, except per share data)   As
Reported
(ASC 606)
    As
Reported
(ASC 606)
    As
Reported
(ASC 606)
    Without
Adoption
(ASC 605)
    As
Reported
(ASC 605)
    As
Reported
(ASC 605)
    As
Reported
(ASC 605)
    As
Reported
(ASC 605)
 

Consolidated Statements of Operations Data:

               

Revenues

               

License

  $ 117,552     $ 108,793     $ 555,581     $ 498,050     $ 429,204     $ 481,659     $ 423,766     $ 279,944  

Maintenance and services

    164,908       137,414       599,771       484,899       447,855       345,284       229,821       132,672  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    282,460       246,207       1,155,352       982,949       877,059       826,943       653,587       412,616  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

    (93,180     (50,379     (89,749     (288,831     (190,965     (139,561     (52,030     6,324  

Net income (loss)

  $ (88,882   $ (46,472   $ (77,042   $ (277,238   $ (185,560   $ (144,449   $ (83,700   $ 5,873  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

               

Basic

  $ (1.04   $ (0.57   $ (0.93   $ (3.36   $ (2.35   $ (1.92   $ (1.17   $ 0.09  

Diluted

  $ (1.04   $ (0.57   $ (0.93   $ (3.36   $ (2.35   $ (1.92   $ (1.17   $ 0.08  

Weighted average shares used to compute net income (loss) per share:

               

Basic

    85,434       81,039       82,632       82,632       78,869       75,162       71,701       67,591  

Diluted

    85,434       81,039       82,632       82,632       78,869       75,162       71,701       74,319  
    As of March 31,     As of December 31,  
    2019     2018     2018     2017     2016     2015     2014  
(in thousands)               As
Reported
(ASC 606)
    Without
Adoption
(ASC 605)
    As
Reported
(ASC 605)
    As
Reported
(ASC 605)
    As
Reported
(ASC 605)
    As
Reported
(ASC 605)
 

Consolidated Balance Sheet Data:

               

Cash and cash equivalents

  $ 501,056     $ 623,994     $ 653,022     $ 653,022     $ 627,878     $ 908,717     $ 795,900     $ 680,613  

Short-term and long-term investments

    558,710       399,149       395,633       395,633       375,151       0       0       0  

Property and equipment, net

    102,477       101,121       94,537       94,537       106,753       106,637       72,350       45,627  

Working capital

    869,116       652,416       867,143       546,658       526,489       722,903       672,138       629,987  

Total assets

    1,839,656       1,430,656       1,634,725       1,481,703       1,398,795       1,287,199       1,030,711       865,662  

Deferred revenue, including long-term portion

    382,185       336,385       394,198       605,640       447,484       312,473       198,511       129,810  

Total liabilities

    820,671       520,783       621,140       830,818       645,172       495,351       296,766       193,656  

Total stockholders’ equity

    1,018,985       909,873       1,013,585       650,885       753,623       791,848       733,945       672,006  


 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

The following selected unaudited pro forma condensed combined financial data has been prepared to reflect the proposed acquisition of Tableau by Salesforce and the completed acquisition of MuleSoft, Inc (“MuleSoft”) by Salesforce on May 2, 2018.

On June 9, 2019, Salesforce and Tableau entered into the merger agreement, pursuant to which Salesforce agreed to acquire Tableau on the terms and subject to the conditions set forth therein. The transaction has not yet closed. Under the terms of the merger agreement, Salesforce is offering to exchange for each outstanding share of Tableau Class A common stock and Tableau Class B common stock, 1.103 shares of Salesforce common stock, together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.

The selected unaudited pro forma condensed combined statement of operations for the year ended January 31, 2019 combines the historical consolidated statements of operations of Salesforce for the year ended January 31, 2019 with the historical consolidated statements of operations of Tableau for the year ended December 31, 2018, giving effect to the completion of the offer and the merger, as if they had occurred on February 1, 2018. On May 2, 2018, Salesforce acquired MuleSoft, which was deemed a significant acquisition pursuant to Regulation S-X, Topic 2. As the historical consolidated statement of operations of Salesforce for the year ended January 31, 2019 does not reflect MuleSoft’s operations for an entire annual period, the selected unaudited pro forma condensed combined statement of operations for the year ended January 31, 2019 are adjusted for the historical consolidated statement of operations of MuleSoft for the period from February 1, 2018 through the date of acquisition on May 2, 2018, giving effect to the completion of the acquisition, as if it had occurred on February 1, 2018.

The selected unaudited pro forma condensed combined statement of operations for the three months ended April 30, 2019 combines the historical condensed consolidated statements of operations of Salesforce for the three months ended April 30, 2019 with the historical condensed consolidated statements of operations of Tableau for the three months ended March 31, 2019, giving effect to the completion of the offer and the merger, as if they had occurred on February 1, 2018. The historical condensed consolidated statements of operations of Salesforce for the three months ended April 30, 2019 include the results of MuleSoft for the full period presented, therefore no adjustments needed to be made.

The selected unaudited pro forma condensed combined balance sheet as of April 30, 2019 combines the historical condensed consolidated balance sheet of Salesforce as of April 30, 2019 with the historical condensed consolidated balance sheet of Tableau as of March 31, 2019, giving effect to the completion of the offer and the merger, as if they had occurred on April 30, 2019. The historical condensed consolidated balance sheet of Salesforce as of April 30, 2019 reflects the results of MuleSoft, therefore no adjustments needed to be made.

The pro forma financial information does not give effect to the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, or any other synergies that may result from the offer and the merger, nor does it give effect to any changes in share price.



 

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The selected unaudited pro forma condensed combined financial data has been prepared for informational purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of Salesforce would have been had the offer and the merger occurred on the dates assumed, nor is this information necessarily indicative of future consolidated results of operations or financial position. The following information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and the related notes included elsewhere in this document.

Selected Unaudited Pro Forma Condensed Combined Statement of Operations

 

     Fiscal Year Ended
January 31, 2019
     Three Months Ended
April 30, 2019
 
(in millions, except per share data)       

Revenue

   $ 14,350      $ 3,972  

Net income

   $ 48      $ 155  

Net income per share:

     

Basic

   $ 0.06      $ 0.18  

Diluted

   $ 0.05      $ 0.17  

Shares used in computing earnings per share:

     

Basic

     850        867  

Diluted

     885        898  

Selected Unaudited Pro Forma Condensed Combined Balance Sheet

 

     As of
April 30, 2019
 
(in millions)       

Total assets

   $ 49,837  

Total liabilities

   $ 17,786  

Total stockholders’ equity

   $ 32,051  


 

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COMPARATIVE PER SHARE DATA

(UNAUDITED)

The following table reflects historical information about basic and diluted earnings (loss) per share for the fiscal year ended January 31, 2019 and the three months ended April 30, 2019, in the case of Salesforce, and for the fiscal year ended December 31, 2018 and the three months ended March 31, 2019, in the case of Tableau, and for the period from February 1, 2018 through May 2, 2018, in the case of MuleSoft, as well as book value per share as of April 30, 2019, in the case of Salesforce, and as of March 31, 2019, in the case of Tableau, in all cases on a historical basis, and for Salesforce, Tableau and MuleSoft on an unaudited pro forma combined basis after giving effect to the offer and the merger. The pro forma data of the combined companies assumes the acquisition of 100% of the Tableau Class A and B shares by Salesforce and was derived by combining the historical consolidated financial information of Salesforce, Tableau and MuleSoft as described previously in this document. For a discussion of the assumptions and adjustments made in preparing the pro forma financial information presented in this document, see “Unaudited Pro Forma Condensed Combined Financial Statements.”

Tableau stockholders should read the information presented in the following table together with the historical financial statements of Salesforce, Tableau and MuleSoft and the related notes which are incorporated herein by reference, and the “Unaudited Pro Forma Condensed Combined Financial Statements” appearing elsewhere in this document. The pro forma data is unaudited and for illustrative purposes only. Tableau stockholders should not rely on this information as being indicative of the historical results that would have been achieved during the periods presented had the companies always been combined or the future results that the combined company will achieve after the consummation of the offer and the merger. This pro forma information is subject to risks and uncertainties, including those discussed in “Risk Factors.”

 

    Salesforce
Historical
    MuleSoft
Historical
    Tableau
Historical
    Pro Forma
Combined
    Pro Forma
Equivalent
Tableau
Share(1)
 

Fiscal year ended January 31, 2019 for Salesforce, the fiscal year ended December 31, 2018 for Tableau and the period from February 1, 2018 through May 2, 2018 for MuleSoft

         

Net income (loss) per share:

         

Basic earnings (loss) per share

  $ 1.48     $ (0.22   $ (0.93   $ 0.06     $ 0.06  

Diluted earnings (loss) per share

  $ 1.43     $ (0.22   $ (0.93   $ 0.05     $ 0.06  

Cash dividends declared per share

    0       0       0       0       0  

Three months ended April 30, 2019 for Salesforce and the three months ended March 31, 2019 for Tableau:

         

Net income (loss) per share:

         

Basic earnings (loss) per share

  $ 0.51       N/A     $ (1.04   $ 0.18     $ 0.20  

Diluted earnings (loss) per share

  $ 0.49       N/A     $ (1.04   $ 0.17     $ 0.19  

Cash dividends declared per share

    0       N/A       0       0       0  

Book value per share as of April 30, 2019 for Salesforce and March 31, 2019 for Tableau

  $ 21.22       N/A     $ 11.85     $ 36.80     $ 40.59  

 

(1)

The Tableau pro forma equivalent per share amounts were calculated by multiplying the pro forma combined amounts by the exchange ratio of 1.103.



 

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RISK FACTORS

Tableau stockholders should carefully read this document and the other documents referred to or incorporated by reference into this document, including in particular the following risk factors, in deciding whether to tender Tableau shares pursuant to the offer.

Risk Factors Relating to the Offer and the Merger

The transaction consideration is fixed and will not be adjusted. Because the market price of Salesforce common stock may fluctuate, Tableau stockholders cannot be sure of the market value of the stock consideration they will receive in exchange for their Tableau shares in connection with the transactions.

In connection with the offer and the merger, Tableau stockholders will receive a fixed number of Salesforce shares for each of their shares of Tableau Class A common stock and Tableau Class B common stock (i.e., 1.103 Salesforce shares for each Tableau share). Accordingly, the market value of the stock consideration that you will receive in the offer or merger will vary based on the price of Salesforce common stock at the time you receive the transaction consideration. The market price of Salesforce common stock may decline after the date of this document, after you tender your shares and/or after the offer and the merger are completed.

A decline in the market price of Salesforce common stock could result from a variety of factors beyond Salesforce’s control, including, among other things, the possibility that Salesforce may not achieve the expected benefits of the acquisition of Tableau as rapidly or to the extent anticipated, Tableau’s business may not perform as anticipated following the transactions, the effect of Salesforce’s acquisition of Tableau on Salesforce’s financial results may not meet the expectations of Salesforce, financial analysts or investors, or the addition and integration of Tableau’s business may be unsuccessful, may take longer or be more disruptive than anticipated, as well as numerous factors affecting Salesforce and its businesses that are unrelated to Tableau.

Because the offer will not be completed until certain conditions have been satisfied or waived in accordance with the merger agreement, a significant period of time may pass between the commencement of the offer, the time you tender your shares and the time that the Offeror accepts your shares for payment. Therefore, at the time you tender your Tableau shares pursuant to the offer, you will not know the exact market value of the transaction consideration that will be issued if the Offeror accepts such shares for payment.

See “Comparative Market Price and Dividend Matters.” You are urged to obtain current market quotations for shares of Tableau Class A common stock and for shares of Salesforce common stock.

The offer remains subject to conditions that Salesforce cannot control.

The offer is subject to conditions, including the minimum tender condition, receipt of required regulatory approvals, lack of legal prohibitions, no material adverse effect (as described in “Merger Agreement—Material Adverse Effect”) having occurred with respect to Tableau since the date of the merger agreement that is continuing as of immediately prior to the expiration of the offer, the accuracy of Tableau’s representations and warranties made in the merger agreement (subject to specified materiality standards), Tableau being in compliance in all material respects with its covenants under the merger agreement, the listing of the Salesforce shares to be issued in the offer and the merger being authorized for listing on the NYSE, subject to official notice of issuance, the registration statement on Form S-4 of which this document is a part becoming effective, and the merger agreement not having been terminated in accordance with its terms. There are no assurances that all of the conditions to the offer will be satisfied or that the conditions will be satisfied in the time frame expected. If the conditions to the offer are not met, then Salesforce may, subject to the terms and conditions of the merger agreement, allow the offer to expire, or amend or extend the offer. See “The Offer—Conditions of the Offer” for a discussion of the conditions to the offer.

 

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If the transactions are completed, Tableau stockholders will receive Salesforce shares as the transaction consideration and will accordingly become Salesforce stockholders. Salesforce common stock may be affected by different factors than Tableau common stock is affected by, and Salesforce stockholders will have different rights than Tableau stockholders.

Upon consummation of the transactions, Tableau stockholders will receive Salesforce shares as part of the transaction consideration and will accordingly become Salesforce stockholders. Salesforce’s business differs from that of Tableau, and Salesforce’s results of operations and stock price may be adversely affected by factors different from those that would affect Tableau’s results of operations and stock price.

In addition, holders of shares of Salesforce common stock will have rights as Salesforce stockholders that differ from the rights they had as Tableau stockholders before the transactions. For example, shares of Tableau Class B common stock are generally entitled to 10 votes per share, whereas all Salesforce shares are entitled to one vote per share. For a comparison of the rights of Salesforce stockholders to the rights of Tableau stockholders, see “Comparison of Stockholders’ Rights.”

Tableau stockholders who participate in the Offer will be forfeiting all rights with respect to their Tableau shares other than the right to receive the transaction consideration, including the right to participate directly in any earnings or future growth of Tableau.

If the offer and the merger are completed, Tableau stockholders will cease to have any equity interest in Tableau and will not participate in its earnings or any future growth, except indirectly through ownership of Salesforce shares received in the offer and the merger

Consummation of the offer may adversely affect the liquidity of the Tableau shares not tendered in the offer.

If the offer is completed, you should expect the number of Tableau stockholders and the number of publicly traded Tableau shares to be significantly reduced. As a result, the closing of the offer can be expected to adversely affect, in a material way, the liquidity of the remaining Tableau shares held by the public pending the consummation of the merger. Although Salesforce currently expects the merger to occur on the day after the offer is completed, Salesforce cannot assure you that all conditions to the merger will be satisfied at that time, or at all.

Tableau directors and officers potentially have interests in the transaction that differ from, or are in addition to, the interests of the Tableau stockholders generally.

You should be aware that some of the officers and directors of Tableau may be deemed to have interests in the offer and the merger that are different from, or in addition to, your interests as a Tableau stockholder. These interests may include, among others, agreements that certain officers have entered into with Tableau that provide for the acceleration of stock options and restricted stock units in the event the officer experiences a qualifying termination of employment within a specified period following a change of control of Tableau, payments of severance benefits under Tableau’s change in control severance agreements executive officers, agreements that certain executive officers have entered into with Salesforce that provide for grants of Salesforce equity awards following the effective time and certain indemnification obligations. See “The Offer—Interests of Certain Persons in the Offer and the Merger” and “Merger Agreement—Employee Matters” below for more information.

As of June 24, 2019, the directors and executive officers of Tableau and their affiliates beneficially owned approximately 10,500,460 Tableau shares, representing approximately 12.0% of the total Tableau shares outstanding as of June 24, 2019.

Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, entered into a letter agreement with Salesforce and the Offeror,

 

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solely in their capacities as stockholders of Tableau, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock, which in the aggregate represent approximately 11.8% of the outstanding shares of Tableau common stock, prior to the expiration of the offer. The co-founders have also conveyed to both Salesforce and Tableau that they intend to tender into the offer. For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and such letter agreement, which is filed as Exhibit 10.25 to this document.

Tableau stockholders will have a reduced ownership and voting interest in Salesforce as compared to their ownership and voting interest in Tableau.

After consummation of the offer and merger, Tableau stockholders will own approximately 11.0% of the outstanding Salesforce shares, based upon the number of outstanding Tableau shares as of June 24, 2019, disregarding stock options, restricted stock units and other rights to acquire shares that may be issued by Salesforce or Tableau pursuant to any employee stock plan. Additionally, whereas shares of Tableau Class B common stock are entitled to 10 votes per share, which generally provides such stockholders greater influence on the management and policies of Tableau, all Salesforce shares are entitled to one vote per share. Consequently, former Tableau stockholders will have less influence on the management and policies of the combined company than they currently exercise over Tableau.

Sales of substantial amounts of Salesforce shares in the open market by former Tableau stockholders could depress its stock price.

Other than shares held by persons who will be affiliates of Salesforce after the offer and the merger, Salesforce shares that are issued to Tableau stockholders, including those shares issued upon the exercise of outstanding stock options or restricted stock units, will be freely tradable without restrictions or further registration under the Securities Act. If the offer and the merger are completed and if former Tableau stockholders and Tableau employees sell substantial amounts of Salesforce common stock in the public market following consummation of the offer and the merger, the market price of Salesforce common stock may decrease.

Holders of Tableau common stock and holders of Salesforce common stock will not be entitled to appraisal rights in the merger.

Section 262 of the DGCL provides that stockholders have the right, in some circumstances, to dissent from certain corporate actions and to instead demand payment of the fair value of their shares. Stockholders do not have appraisal rights with respect to shares of any class or series of stock if such shares of stock, or depositary receipts in respect thereof, are either (a) listed on a national securities exchange or (b) held of record by more than 2,000 holders, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation (or depositary receipts in respect thereof), or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash in lieu of fractional shares or fractional depositary receipts described above or any combination of the foregoing.

Therefore, because shares of Tableau common stock are listed on NYSE, and the transaction consideration consists of only shares of Salesforce common stock, which are listed on NYSE, and cash in lieu of fractional shares, holders of Tableau common stock are not entitled to appraisal rights in the offer or the merger with respect to their shares of Tableau common stock. In addition, because the merger is of Tableau with a subsidiary of Salesforce and holders of Salesforce common stock will continue to hold their shares following completion of the merger, holders of Salesforce common stock are not entitled to appraisal rights in connection with the offer or the merger with respect to their shares of Salesforce common stock. See “The Offer—No Appraisal Rights.”

Litigation relating to the offer or the merger could require Salesforce to incur significant costs and suffer management distraction, as well as to delay and/or enjoin the merger.

Three civil actions were filed challenging the adequacy of certain disclosures disseminated in connection with the proposed transaction. On July 10, 2019, Shiva Stein, a purported stockholder of Tableau, commenced an

 

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action in the United States District Court for the District of Delaware, captioned Stein v. Tableau Software, Inc. et al., Case No. 1:19-cv-01289, against Tableau and each of the current members of the Tableau Board (the “Stein complaint”). The Stein complaint asserts claims under Sections 14(d), 14(e), and 20(a) of the Exchange Act challenging the adequacy of certain public disclosures made in the Schedule 14D-9 concerning the proposed transaction. The plaintiff seeks, among other things, an injunction preventing consummation of the proposed transaction, rescission of the proposed transaction or rescissory damages in the event it is consummated, an accounting by defendants for all damages caused to the plaintiff, and the award of attorneys’ fees and expenses. On July 10, 2019, Marcy Curtis, a purported stockholder of Tableau, commenced a putative class action in the United States District Court for the District of Delaware, captioned Curtis v. Tableau Software, Inc. et al., Case No. 1:19-cv-01290, against Tableau, each of the current members of the Tableau Board, Salesforce, and Offeror (the “Curtis complaint”). The Curtis complaint asserts claims under Sections 14(d), 14(e), and 20(a) of the Exchange Act challenging the adequacy of certain public disclosures made in the Schedule 14D-9 concerning the proposed transaction. The plaintiff seeks, among other things, an injunction preventing consummation of the proposed transaction, rescission of the proposed transaction or rescissory damages in the event it is consummated, declaratory relief, and the award of attorneys’ fees and expenses. On July 11, 2019, Cathy O’Brien, a purported stockholder of Tableau, commenced an action in the United States District Court for the Southern District of New York, captioned O’Brien v. Tableau Software, Inc., et al., Case No. 1:19-cv-06447, against Tableau and each of the current members of the Tableau Board (the “O’Brien complaint”). The O’Brien complaint asserts claims under Sections 14(d), 14(e), and 20(a) of the Exchange Act challenging the adequacy of certain public disclosures made in the Schedule 14D-9 concerning the proposed transaction. The plaintiff seeks, among other things, an injunction preventing consummation of the proposed transaction, rescission of the proposed transaction or rescissory damages in the event it is consummated, an accounting by defendants for all damages caused to the plaintiff, and the award of attorneys’ fees and expenses. The defendants believe the claims asserted in these civil actions are without merit.

Salesforce and Tableau could be subject to additional demands or litigation related to the offer or the merger, whether or not the merger is consummated. Such existing and additional demands or actions may create uncertainty relating to the offer or the merger, and responding to such demands and defending such actions may be costly and distracting to management of both companies.

Risk Factors Relating to Salesforce and the Combined Company

Salesforce may fail to realize all of the anticipated benefits of the offer, and the merger or those benefits may take longer to realize than expected.

Salesforce believes that there are significant benefits and synergies that may be realized through leveraging the products, scale and combined enterprise customer bases of Salesforce and Tableau. However, the efforts to realize these benefits and synergies will be a complex process and may disrupt both companies’ existing operations if not implemented in a timely and efficient manner. The full benefits of the transactions, including the anticipated sales or growth opportunities, may not be realized as expected or may not be achieved within the anticipated time frame, or at all. Failure to achieve the anticipated benefits of the transactions could adversely affect Salesforce’s results of operations or cash flows, cause dilution to the earnings per share of Salesforce, decrease or delay any accretive effect of the transactions and negatively impact the price of Salesforce common stock.

In addition, Salesforce and Tableau will be required to devote significant attention and resources prior to closing to prepare for the post-closing integration and operation of the combined company, and Salesforce will be required post-closing to devote significant attention and resources to successfully align the business practices and operations of Salesforce and Tableau. This process may disrupt the businesses and, if ineffective, would limit the anticipated benefits of the transaction.

 

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Salesforce and Tableau will incur direct and indirect costs as a result of the offer and the merger.

Salesforce and Tableau will incur substantial expenses in connection with and as a result of completing the offer and the merger and, following the completion of the merger, Salesforce expects to incur additional expenses in connection with combining the businesses and operations of Salesforce and Tableau. Factors beyond Salesforce’s control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately. Moreover, diversion of management focus and resources from the day-to-day operation of the business to matters relating to the transactions could adversely affect each company’s business, regardless of whether the offer and the merger are completed.

Salesforce’s and Tableau’s actual financial positions and results of operations may differ materially from the unaudited pro forma financial information included in this document, and the projected financial information of Tableau included in this document is inherently subject to uncertainties.

The pro forma financial information contained in this document is presented for illustrative purposes only and may differ materially from what Salesforce’s actual financial position or results of operations would have been had the transactions been completed on the dates indicated. The pro forma financial information has been derived from the historical financial statements of Salesforce and Tableau, and certain adjustments and assumptions have been made regarding the combined company after giving effect to the transactions. The assets and liabilities of Tableau have been measured at fair value based on various preliminary estimates using assumptions that Salesforce management believes are reasonable utilizing information currently available. The process for estimating the fair value of acquired assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. These estimates may be revised as additional information becomes available and as additional analyses are performed. Differences between preliminary estimates in the pro forma financial information and the final acquisition accounting will occur and could have a material impact on the pro forma financial information and the combined company’s financial position and future results of operations.

In addition, the assumptions that were used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect Salesforce’s financial condition or results of operations following the completion of the transactions. Any potential decline in Salesforce’s financial condition or results of operations may cause significant variations in the price of Salesforce common stock. See “Unaudited Pro Forma Condensed Combined Financial Statements.”

While the projected financial information of Tableau (which we refer to as the “management projections”) included in this document is presented with numerical specificity, the management projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond Tableau management’s control. Further, given that the management projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year beyond their preparation. Important factors that may affect actual results and may result in such projections not being achieved include: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the inability to complete the offer or merger, or the failure to satisfy other conditions to completion of the offer or the merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the completion of the merger, and risks and uncertainties pertaining to Tableau’s business, including the risks and uncertainties detailed in Tableau’s public periodic filings with the SEC. In addition, the ability to achieve the management projections may depend on, in part, whether or not the strategic goals, objectives and targets are reached over the applicable period. The assumptions upon which the management projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which Salesforce and Tableau operate, and the risks and uncertainties described in the section of this document titled “Forward-Looking Statements” and in and in “Item 8—Additional Information—Cautionary Statement Regarding

 

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Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document, all of which are difficult or impossible to predict accurately and many of which are beyond Tableau’s and our control. The management projections also reflect assumptions by Tableau management that are subject to change and are susceptible to multiple interpretations and periodic revisions based on actual results, revised prospects for the Tableau business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated when such projections were prepared. Accordingly, there can be no assurance that the management projections will be realized, and actual results may differ, and may differ materially, from those shown. For more information see “The Offer—Projected Financial Information.”

Salesforce has outstanding debt.

Salesforce has outstanding debt and other financial obligations, each of which subjects Salesforce to certain risks, including among others increasing Salesforce’s vulnerability to general adverse economic and industry conditions, requiring Salesforce to dedicate a portion of its cash flow from operations to payments on its debt, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes, and potentially limiting Salesforce’s ability to borrow additional funds or to borrow funds at rates or on other terms it finds acceptable.

The agreements governing Salesforce’s existing debt contain (and it is expected that any agreements governing any additional debt that Salesforce may incur or assume would contain) various operating covenants with respect to Salesforce’s business. In addition, Salesforce’s existing credit facilities require it to comply with a maximum consolidated leverage ratio covenant, and its future credit facilities may also contain financial covenants. Any failure to comply with such restrictions may result in an event of default under such agreements. Such default may allow the applicable creditors to accelerate the related debt, which acceleration may trigger cross-acceleration or cross-default provisions in other debt.

Furthermore, if future debt financing is not available when required or is not available on acceptable terms, Salesforce may be unable to grow its business, take advantage of business opportunities, respond to competitive pressures or refinance maturing debt, any of which could have a material adverse effect on its operating results and financial condition.

Risks Related to Salesforce’s Business

You should read and consider the risk factors specific to Salesforce’s business that will also affect the combined company after the offer and the merger. These risks are described in Salesforce’s Annual Report on Form 10-K for the fiscal year ended January 31, 2019 and its Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2019, which are incorporated by reference into this document, and in other documents that are incorporated by reference into this document. See “Where to Obtain More Information” for the location of information incorporated by reference in this document.

Risks Related to Tableau’s Business

You should read and consider the risk factors specific to Tableau’s business that will also affect the combined company after the offer and the merger. These risks are described in Tableau’s Annual Report on Form 10-K for the year ended December 31, 2018 and its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, which are incorporated by reference into this document, and in other documents that are incorporated by reference into this document. See “Where to Obtain More Information” for the location of information incorporated by reference in this document.

 

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FORWARD-LOOKING STATEMENTS

Information both included and incorporated by reference in this document may contain forward-looking statements. Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets,” variations of such words and similar expressions are intended to identify such forward-looking statements, which may consist of, among other things, trend analyses and statements regarding future events, future financial performance, anticipated growth and industry prospects. These forward-looking statements are based on current expectations, estimates and forecasts, as well as the beliefs and assumptions of Salesforce’s management, and are subject to risks and uncertainties that are difficult to predict, including:

 

   

Salesforce’s ability to consummate the proposed transaction on a timely basis or at all;

 

   

the satisfaction of the conditions precedent to consummation of the proposed transaction, including having a sufficient number of Tableau’s shares being validly tendered into the offer to meet the minimum tender condition;

 

   

the parties’ ability to secure regulatory approvals on the terms expected, in a timely manner or at all;

 

   

Salesforce’s ability to successfully integrate Tableau’s operations and employees;

 

   

Salesforce’s ability to implement Salesforce’s plans, forecasts and other expectations with respect to Tableau’s business after the completion of the transaction and to realize expected synergies;

 

   

Salesforce’s ability to realize the anticipated benefits of the transaction, including the possibility that the expected benefits from the transaction will not be realized or will not be realized within the expected time period;

 

   

the impact of Tableau’s business model on Salesforce’s ability to forecast revenue results;

 

   

disruption from the transaction making it more difficult to maintain business and operational relationships;

 

   

the negative effects of the announcement or the consummation of the transaction on the market price of Salesforce common stock or on Salesforce’s operating results;

 

   

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

 

   

unknown liabilities;

 

   

the risk of litigation or regulatory actions related to the transaction;

 

   

the effect of the announcement or pendency of the transaction on Tableau’s business relationships, operating results, and business generally;

 

   

the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;

 

   

the effect of general economic and market conditions;

 

   

the impact of foreign currency exchange rate and interest rate fluctuations on Salesforce’s results;

 

   

Salesforce’s business strategy and plan to build its business, including its strategy to be the leading provider of enterprise cloud computing applications and platforms;

 

   

the pace of change and innovation in enterprise cloud computing services;

 

   

the seasonal nature of Salesforce’s sales cycles

 

   

the competitive nature of the market in which the parties participate;

 

   

Salesforce’s international expansion strategy;

 

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Salesforce’s service performance and security, including the resources and costs required to avoid unanticipated downtime and prevent, detect and remediate potential security breaches;

 

   

the expenses associated with new data centers and third-party infrastructure providers;

 

   

additional data center capacity;

 

   

real estate and office facilities space;

 

   

Salesforce’s operating results and cash flows;

 

   

new services and product features;

 

   

Salesforce’s strategy of acquiring or making investments in complementary businesses, joint ventures, services, technologies and intellectual property rights;

 

   

the performance and fair value of Salesforce’s investments in complementary businesses through Salesforce’s strategic investment portfolio;

 

   

Salesforce’s ability to realize the benefits from strategic partnerships and investments;

 

   

the impact of future gains or losses from Salesforce’s strategic investment portfolio including gains or losses from overall market conditions that may affect the publicly traded companies within Salesforce’s strategic investment portfolio;

 

   

Salesforce’s ability to execute its business plans;

 

   

Salesforce’s ability to successfully integrate acquired businesses and technologies;

 

   

Salesforce’s ability to continue to grow unearned revenue and remaining performance obligation;

 

   

Salesforce’s ability to protect its intellectual property rights;

 

   

Salesforce’s ability to develop its brands;

 

   

Salesforce’s reliance on third-party hardware, software and platform providers;

 

   

Salesforce’s dependency on the development and maintenance of the infrastructure of the Internet;

 

   

the effect of evolving domestic and foreign government regulations, including those related to the provision of services on the Internet, those related to accessing the Internet, and those addressing data privacy, cross-border data transfers and import and export controls;

 

   

the valuation of Salesforce’s deferred tax assets; the potential availability of additional tax assets in the future;

 

   

the impact of new accounting pronouncements and tax laws;

 

   

uncertainties affecting Salesforce’s ability to estimate its tax rate;

 

   

the impact of expensing stock options and other equity awards;

 

   

the sufficiency of Salesforce’s capital resources;

 

   

factors related to Salesforce’s senior notes due 2023 and 2028, revolving credit facility, term loan due 2021 and loan associated with 50 Fremont Street in San Francisco, California;

 

   

compliance with Salesforce’s debt covenants and lease obligations;

 

   

current and potential litigation involving Salesforce or Tableau;

 

   

the impact of climate change; and

 

   

other risks detailed in Salesforce’s filings with the SEC (see “Where to Obtain More Information”).

 

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These and other risks and uncertainties may cause Salesforce’s actual results to differ materially and adversely from those expressed in any forward-looking statements. Readers are directed to risks and uncertainties identified above under “Risk Factors” and elsewhere in this document for additional detail regarding factors that may cause actual results to be different from those expressed in Salesforce’s forward-looking statements. Except as required by law, Salesforce undertakes no obligation to revise or update publicly any forward-looking statements for any reason. All forward-looking statements speak only as of the date of this document. All subsequent written and oral forward-looking statements attributable to Salesforce or any person acting on Salesforce’s behalf are qualified by the cautionary statements in this section.

 

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THE COMPANIES

Salesforce

Salesforce, a Delaware corporation, is a global leader in customer relationship management, or CRM, technology that enables companies to improve their relationships and interactions with customers. Salesforce introduced its first CRM solution in 2000, and has since expanded its service offerings into new areas and industries with new editions, features and platform capabilities. Salesforce’s core mission is to empower its customers of every size and industry to connect with their customers in new ways through existing and emerging technologies, including cloud, mobile, social, Internet of Things and artificial intelligence. Salesforce’s Customer Success Platform—including sales force automation, customer service and support, marketing automation, digital commerce, community management, industry-specific solutions, analytics, integration solutions, application development, Internet of Things integration, collaborative productivity tools, its AppExchange, which is its enterprise cloud marketplace, and its professional cloud services—provides the tools customers need to succeed in a digital world.

Salesforce common stock is traded on the NYSE under the ticker symbol “CRM.”

The address of Salesforce’s principal executive offices is Salesforce Tower, 415 Mission Street, 3rd Floor, San Francisco, California 94105. Salesforce’s telephone number is (415) 901-7000. Salesforce also maintains an Internet site at www.salesforce.com. Salesforce’s website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.

The Offeror

The Offeror, a Delaware corporation, is an indirect wholly owned subsidiary of Salesforce. The Offeror is newly formed, and was organized for the purpose of making the offer and consummating the merger. The Offeror has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the offer and the merger. The Offeror’s address is c/o salesforce.com, inc., Salesforce Tower, 415 Mission Street, 3rd Floor, San Francisco, California 94105, telephone number (415)  901-7000.

Tableau

Tableau, a Delaware corporation, puts the power of data into the hands of everyday people with its software products, allowing a broad population of business users to engage with their data, ask questions, solve problems and create value. Based on core technologies originally developed at Stanford University, Tableau’s products reduce the complexity, inflexibility and expense associated with traditional business intelligence applications. Tableau currently offers five key products: Tableau Desktop, a self-service, powerful analytics product for anyone with data; Tableau Server, a business intelligence platform for organizations; Tableau Online, a hosted software-as-a-service (“SaaS”) version of Tableau Server; Tableau Prep, a data preparation product for combining, shaping and cleaning data; and Tableau Public, a free cloud-based platform for analyzing and sharing public data.

Tableau Class A common stock is listed on the NYSE under the ticker symbol “DATA.” The Tableau Class B common stock is not publicly traded but converts, on a one-for-one basis, into Tableau Class A common stock at the election of the holder and in some cases automatically upon certain transfers as provided in Tableau’s certificate of incorporation.

The address of Tableau’s principal executive offices is 1621 North 34th Street, Seattle, Washington 98103. Tableau’s telephone number is (206) 633-3400. Tableau also maintains an Internet site at www.tableau.com. Tableau’s website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.

 

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THE OFFER

General

Salesforce, through the Offeror, which is an indirect wholly owned subsidiary of Salesforce, is offering to exchange for each outstanding share of Tableau Class A common stock and Tableau Class B common stock validly tendered and not validly withdrawn in the offer, 1.103 shares of Salesforce common stock, with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.

Tableau stockholders will not receive any fractional shares of Salesforce common stock in the offer or the merger, and each Tableau stockholder who otherwise would be entitled to receive a fraction of a share of Salesforce common stock pursuant to the offer or the merger will be paid an amount in cash (without interest) equal to such fractional part of a share of Salesforce common stock multiplied by the volume weighted average closing sale price of one share of Salesforce common stock as reported on the NYSE for the ten consecutive trading days ending on and including the trading day immediately preceding the acceptance of tendered Tableau shares in the offer, rounded to the nearest whole cent. See “Merger Agreement—Fractional Shares.”

The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares, and the merger is the second step in such plan. If the offer is completed, validly tendered (and not validly withdrawn) Tableau shares will be exchanged for the transaction consideration, and if the merger is completed, any remaining Tableau shares that were not tendered into the offer (other than certain converted or cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. If the offer is completed, Salesforce intends to promptly consummate the merger as the second step in such plan. The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer. Upon consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former Tableau stockholders will no longer have any direct ownership interest in the surviving corporation.

Background of the Offer and the Merger

The Schedule 14D-9 includes additional information on the background, deliberations and other activities involving Tableau (see the section titled “Background of the Offer and the Merger” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document). You are encouraged to read that section in its entirety.

Members of Salesforce’s management team regularly consider and pursue opportunities to enhance Salesforce’s product suite, improve customer satisfaction and unlock stockholder value. In this regard, members of Salesforce’s management team have reviewed and discussed business, operational and strategic plans to enhance and complement Salesforce’s existing product suite to address the needs articulated by Salesforce customers, including to better leverage data (regardless of where it resides) to make smarter and faster decisions and create differentiated connected customer experiences.

In early December 2018, John Somorjai, Salesforce’s Executive Vice President, Corporate Development & Salesforce Ventures, contacted Adam Selipsky, the Chief Executive Officer of Tableau, to arrange a meeting. On December 6, 2018, Mr. Selipsky and Jay Peir, Executive Vice President, Corporate Development & Strategy of Tableau, met with Mr. Somorjai, Bret Taylor, Chief Product Officer of Salesforce, and Alex Dayon, President and Chief Strategy Officer of Salesforce. At this meeting, representatives of Salesforce and Tableau discussed the changing technology landscape and the data analytics industry generally. As part of these discussions, representatives of Tableau and Salesforce explored, at a high level, possible ways that the companies could work together in the future. In the course of those discussions, representatives of Tableau gave Salesforce’s representatives an overview of Tableau’s businesses and products. However, they did not exchange any non-public information or discuss a potential strategic transaction.

 

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On December 10, 2018, the Mergers and Acquisitions Committee of the Salesforce board of directors (which we refer to as the “M&A Committee”) held a regularly scheduled meeting to discuss and review, among other things, the possible acquisition of Tableau and recommended that management brief the Salesforce board of directors on a potential transaction.

On December 11, 2018, at a regularly scheduled meeting of the Salesforce board of directors, Marc Benioff, the Chairman and Co-Chief Executive Officer of Salesforce, and Keith Block, the Co-Chief Executive Officer of Salesforce, provided an update to the Salesforce board of directors regarding Salesforce’s merger and acquisitions strategy, including a potential acquisition of Tableau.

On December 18, 2018, Mr. Benioff and Mr. Selipsky met to discuss various matters in the technology industry generally and, as a follow up to the December 6 meeting, discussed possible ways that the companies could work together in the future. During this meeting, Mr. Selipsky described Tableau’s culture and products, but did not provide any non-public information. During the course of the conversations, Mr. Benioff raised the possibility of a strategic transaction between Tableau and Salesforce, expressing that a transaction could present a potentially compelling opportunity for the two companies. Mr. Selipsky told Mr. Benioff that he would convey Salesforce’s interest to the Tableau board of directors.

In early January 2019, Mr. Benioff contacted Mr. Selipsky to indicate that Salesforce would like to discuss a potential strategic combination with Tableau in more detail. Mr. Selipsky told Mr. Benioff that he would convey Salesforce’s interest to the Tableau Board.

On February 12, 2019, the M&A committee met to discuss and review the business, prospects and potential for an acquisition of Tableau and authorized management to continue to pursue negotiations with Tableau and to submit a proposal to acquire Tableau. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Securities, Inc. (“BofA Merrill Lynch”), Salesforce’s exclusive financial advisor in connection with the potential transaction, and Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”), Salesforce’s outside legal counsel in connection with the potential transaction, attended the meeting.

On February 12, 2019, Salesforce submitted to Tableau a non-binding proposal offering to acquire all of the outstanding Tableau securities for $157 per share. The proposal indicated a preference for 100% of the consideration to be Salesforce common stock, although an openness to discussing a mix of cash and stock if preferred by the Tableau board of directors. The proposal indicated that the exchange ratio for consideration would be fixed, based on the unaffected trailing five-day volume weighted average trading share price of the Salesforce common stock (the “5-day VWAP”). The proposal also noted Salesforce’s expectation that Tableau’s founders would agree to support the transaction, and that the offer would not be subject to a vote of Salesforce stockholders in connection with the proposed transaction. The proposal also indicated that Salesforce viewed the Tableau management team as important to the success of the combination and, at the appropriate time and with the consent of the Tableau board of directors, Salesforce would like to engage in discussions with the management team related to their retention and reporting structures.

On February 15, 2019, Mr. Selipsky conveyed to Mr. Benioff the position of the Tableau board of directors that any offer for a strategic combination would need to be significantly higher to warrant further engagement, and they agreed that further discussion between the companies’ representatives and advisors would be helpful.

On February 18, 2019, representatives of BofA Merrill Lynch contacted representatives of Goldman Sachs to discuss the recent Salesforce proposal and representatives of Goldman Sachs reiterated the position of the Tableau board of directors.

On February 21, 2019, Salesforce submitted to Tableau an updated proposal with a revised offer at $170 per share, all-stock consideration (although Salesforce indicated an openness to discussing a mix of cash and stock if preferred by the Tableau board of directors) and an exchange ratio to be fixed based on the 5-day VWAP.

 

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On February 26, 2019, representatives of Goldman Sachs, as instructed by representatives of Tableau management, contacted representatives of BofA Merrill Lynch to facilitate limited diligence discussions.

On February 27, 2019, Salesforce negotiated and entered into a confidentiality agreement with Tableau. The confidentiality agreement included a 12-month standstill provision, which did not restrict Salesforce from making confidential proposals to, or requesting a waiver of the standstill from, the Tableau board of directors.

On February 28, 2019, the M&A Committee met to discuss and review the status of, and negotiations with respect to, the potential acquisition of Tableau. Mr. Somorjai updated the M&A Committee regarding recent communications with Tableau and its financial advisors, and potential next steps. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.

From March 4 through March 11, 2019, high-level diligence information was exchanged and in-person and telephonic diligence meetings were conducted with executives and advisors of the respective companies.

On March 11, 2019, Mr. Benioff, Mr. Block and members of the Salesforce management team met in person in San Francisco with Mr. Selipsky and other members of the Tableau management team to discuss the products and business operations of Tableau and synergy opportunities between the companies.

On March 12, 2019, the M&A Committee met to discuss and review the status of, and negotiations with respect to, the potential acquisition of Tableau. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.

From March 12 through March 27, 2019, the parties continued diligence information exchange and related meetings.

On March 13, 2019, at a regularly scheduled meeting of the Salesforce board of directors, Salesforce management discussed the status of negotiations with respect to the potential acquisition of Tableau and the progress that had been made conducting substantial diligence. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.

On March 14, 2019, representatives of Goldman Sachs communicated to representatives of BofA Merrill Lynch the position of the Tableau board of directors that additional engagement would not be warranted if Salesforce would not pay more than $170 per share. Representatives of BofA Merrill Lynch confirmed to representatives of Goldman Sachs that Salesforce had an ongoing interest in continuing discussions, but only to the extent Tableau would convey a bona fide counterproposal regarding valuation.

On March 18, 2019, representatives of Salesforce and Tableau discussed high-level diligence regarding Salesforce’s quarterly financial information.

On March 20, 2019, representatives of Goldman Sachs contacted representatives of BofA Merrill Lynch to relay a counterproposal from the Tableau board of directors of $190 per share.

Later that day, representatives of BofA Merrill Lynch, as previously authorized by the Salesforce board of directors, contacted representatives of Goldman Sachs to communicate a revised proposal of $177 per share, which had been authorized by the M&A Committee in its previous meetings, with material terms in line with those previously presented in the prior Salesforce offer and a request for exclusivity and a commitment to enter into an agreement by April 2.

On March 21, 2019, representatives of Goldman Sachs contacted representatives of BofA Merrill Lynch to provide a counterproposal from the Tableau board of directors of $186 per share without any exclusivity agreement.

 

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On March 22, 2019, representatives of BofA Merrill Lynch, on behalf of Salesforce, reaffirmed Salesforce’s willingness to pay $177 per share in response to the counterproposal of the Tableau board of directors.

Between March 22 and March 28, 2019, representatives of the two companies discussed further the potential transaction, although no agreement was reached on price.

On March 26, 2019, representatives of Tableau reached out to representatives of Salesforce to explore benchmarking for a potential transaction value at a price in the range of the low $180s price per share of Tableau common stock.

Over the course of April 2 through April 4, 2019, the parties exchanged additional diligence information and held additional in-person diligence meetings. During the course of these meetings, executives of Salesforce and Tableau discussed the potential transaction, though no additional proposals regarding value were made.

On April 4, 2019, Mr. Benioff, Mr. Block and Mr. Hawkins held in person meetings in Seattle with Mr. Selipsky and Mr. Fletcher.

On April 8, 2019, representatives of Goldman Sachs contacted representatives of BofA Merrill Lynch to relay the position of the Tableau board of directors. The representatives discussed facilitating the parties’ exchange of financial diligence information regarding Tableau’s first quarter financial results.

Between April 9 and May 3, 2019, executives of the two companies held additional discussions regarding the potential transaction and their respective businesses and exchanged additional diligence materials. During this period, the companies and their financial advisors continued to discuss perspectives on valuation and possible methods for agreeing on a fixed exchange ratio for a potential transaction.

On May 8, 2019, senior executive officers of Tableau and Salesforce discussed their previously described positions on value and agreed that a discussion between advisors would be a productive next step.

On May 9, 2019, Goldman Sachs, at Tableau senior management’s direction, contacted BofA Merrill Lynch to discuss possible valuation alternatives to assist the parties with bridging the then-current valuation gap.

On May 9, 2019, Salesforce presented to Tableau an updated written proposal to acquire all of the outstanding securities of Tableau for a price per share of $171. Consistent with previous proposals, the transaction consideration would be all-stock and the exchange ratio would be fixed at the 5-day VWAP.

On May 12, 2019, Salesforce was contacted by Mr. Selipsky, who communicated the position of the Transaction Committee of the Tableau board of directors (which we refer to as the “Transaction Committee”) that a fixed exchange ratio could be used for the transaction, but would, in all cases, be subject to a floor of $175 per share.

On May 14, 2019, Salesforce presented to Tableau an updated written proposal to acquire all of the outstanding securities of Tableau for a price per share of $173 on terms similar to those previously conveyed.

On May 15, 2019, Mr. Benioff contacted Mr. Selipsky to discuss the revised proposal on value in light of recent stock price volatility. Mr. Selipsky reiterated the commitment to value of the Tableau Board but agreed to revisit the discussion after consultation with the Transaction Committee.

On May 16, 2019, Salesforce submitted to Tableau a revised written proposal outlining the terms of a potential transaction between Salesforce and Tableau. Salesforce proposed to acquire all of the outstanding securities of Tableau for a price per share between $175.00 and $180.00. Consistent with previous proposals, the transaction consideration would be all-stock and the exchange ratio would be based on the 5-day VWAP as determined prior to signing and a 39.9% premium to the 5-day VWAP of Class A common stock subject to a lower and upper bound of $175 and $180 per share. The revised proposal was also subject to a commitment from Tableau to work towards announcing a transaction on June 4, 2019. In order to achieve that target, Salesforce requested that the parties enter into an exclusivity agreement, with an exclusivity period lasting through June 4, 2019.

 

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On May 17, 2019, a representative of Salesforce sent a representative of Tableau a draft exclusivity agreement. On the same day, representatives of Wachtell Lipton also informed representatives of Cooley that, as a condition to Salesforce announcing a transaction, Salesforce would require certain employees of Tableau, including Tableau’s executive team, to sign offer letters concurrently with the entry into the merger agreement.

On May 18, 2019, Salesforce was informed that the Tableau board of directors had authorized Tableau to discuss and negotiate Salesforce’s proposal and enter into an exclusivity agreement with an exclusivity period lasting through June 4, 2019. Representatives of Salesforce and Tableau then finalized the terms of the Exclusivity Agreement, which Salesforce and Tableau then executed.

Over the course of the exclusivity period, representatives of Salesforce and Tableau, including their respective advisors, engaged in reciprocal in-person and telephonic due diligence investigations. In addition, Tableau provided a virtual data room to Salesforce and its advisors, which contained substantial materials regarding Tableau’s business, financials, material contracts and other matters. Salesforce continued to conduct due diligence on Tableau throughout the negotiation period.

On May 23, 2019, representatives of Wachtell Lipton sent representatives of Cooley a draft merger agreement and draft tender agreement.

On May 24, 2019, the M&A Committee met to discuss and review the status of negotiations with respect to the potential acquisition of Tableau and the progress that had been made conducting substantial diligence. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.

On May 24, 2019, representatives of Salesforce reached out to Mr. Selipsky to begin discussions regarding post-closing employment arrangements between Salesforce and Mr. Selipsky. Between May 24, 2019 and June 9, 2019, representatives of Salesforce, Mr. Selipsky and other members of Tableau’s senior management team had discussions regarding post-closing employment arrangements, which would require those individuals to sign offer letters concurrently with entry into the merger agreement. On June 9, 2019, these offer letters were entered between Salesforce and the management team members, including Mr. Selipsky. Please see “—Interests of Certain Persons in the Offer and the Merger—Salesforce Offer Letters” for additional information.

On May 27, 2019, representatives of Cooley sent representatives of Wachtell Lipton a revised draft of the merger agreement that among other things removed all of the provisions related to the tender agreements.

On May 29, 2019, representatives of Wachtell Lipton spoke to representatives of Cooley about Salesforce’s proposal to have the founders sign tender agreements in connection with the proposed transaction. Representatives of Wachtell Lipton also reiterated that Salesforce would be unlikely to proceed with a transaction that did not include founder support for the transaction. Later that day, representatives of Wachtell Lipton provided representatives of Cooley with a revised draft of the merger agreement.

In the evening on May 30, 2019, Mr. Selipsky spoke to Mr. Benioff about a personal matter that had arisen and would require Mr. Selipsky to travel out of state for a number of days. Mr. Benioff informed Mr. Selipsky that he believed it would be appropriate to delay the timeline by a few days.

On May 31, 2019, Mr. Somorjai spoke to Mr. Peir about the open issues in the transaction agreements. In addition, Mr. Somorjai requested that Tableau extend the exclusivity period for a period of one week to among other things give Salesforce additional time to complete its due diligence investigations. Mr. Somorjai suggested that the parties target an announcement on June 11, 2019.

On May 31, 2019, the M&A Committee met to discuss and review the status of negotiations with respect to the potential acquisition of Tableau, including the status of the merger agreement and the contemplated tender agreements. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.

 

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On June 4, 2019, Salesforce and Tableau executed an amendment to the Exclusivity Agreement, which extended the exclusivity period to June 11, 2019.

In addition, on June 4, 2019, representatives of Cooley provided representatives of Wachtell Lipton with a revised draft of a merger agreement that among other matters contemplated that the founders would enter into a conditional conversion letter agreement in lieu of tender agreements.

On June 5, 2019, the M&A Committee met to discuss and review the status of due diligence regarding the potential acquisition of Tableau, including preliminary due diligence findings developed over the course of the substantial diligence to date. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.

On June 6, 2019, executives of Salesforce and Tableau discussed the framework for the transaction and the open issues in the transaction agreements. Salesforce expressed concerns around the recent market volatility and the executives of both companies discussed the possibility of announcing the transaction on Monday, June 10.

In addition, on June 6, 2019, the Salesforce board of directors met to discuss and review the status of the potential acquisition of Tableau, including the status of the negotiations around pricing and the recent volatility in the market. The Salesforce board of directors authorized Salesforce management to submit a revised proposal to Tableau reflecting these considerations.

Later that day, representatives of Wachtell Lipton then sent representatives of Cooley a revised draft of a merger agreement.

Later on June 6, 2019, Salesforce sent Mr. Selipsky a revised written proposal that offered to acquire Tableau based on a fixed exchange ratio of 1.0671, implying a price of $170 per share at the one-day closing price of Salesforce’s common stock. The revised proposal noted that the counterproposal took into account the changes in market conditions since May 16 and the competitive landscape.

During the course of June 7, 2019, representatives of each of Tableau and Salesforce discussed Salesforce’s revised proposal. Among other matters, the representatives of Tableau objected to the revised offer being outside the price range (when calculated based on a 5-day VWAP) that formed the basis for the transaction discussions and exclusivity period.

Following further discussion, Salesforce agreed to revise its most recent proposal to reflect an offer price of $175 per share of Tableau common stock, but maintained that the resulting exchange ratio should be based on one-day closing spot prices, while the representatives of Tableau maintained that the Tableau Board expected the exchange ratio to be based on the 5-day VWAP because of, among other things, the recent volatility in the market.

Later on June 7, 2019, representatives of each of Tableau and Salesforce, along with representatives of BofA Merrill Lynch and representatives of Goldman Sachs, discussed various constructs to close the valuation gap. Among these constructs, representatives of each of Tableau and Salesforce, along with representatives of Goldman Sachs and representatives of BofA Merrill Lynch discussed a proposal to fix the transaction exchange ratio based on the trailing three-day volume weighted average trading share price of Salesforce common stock. Based upon a $175 per share price for each outstanding share of Tableau common stock and Salesforce’s three-day volume weighted average share price of $158.64, the parties agreed on an exchange ratio of 1.103, subject to final approval by each party’s respective board of directors.

On June 7 and June 8, Mr. Somorjai and Mr. Peir also had several discussions to resolve the outstanding open business and legal points.

 

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Over the course of June 7 to June 9, 2019, representatives of Cooley and Wachtell Lipton exchanged several revised versions of the draft merger agreement reflecting the parties’ discussions.

On June 9, 2019, the Salesforce board of directors held a meeting to consider and discuss the terms of the proposed acquisition of Tableau by Salesforce. At the invitation of the Salesforce board of directors, members of Salesforce management, representatives of BofA Merrill Lynch and representatives of Wachtell Lipton attended the meeting. The Salesforce board of directors reviewed the material terms and conditions of the proposed transaction. Representatives of BofA Merrill Lynch discussed with the directors various financial analyses performed by BofA Merrill Lynch with respect to the proposed transaction. The Salesforce board of directors then engaged in discussion and deliberations, following which the Salesforce board of directors approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the offer and the merger and the issuance of Salesforce shares in connection therewith, were advisable and fair to, and in the best interests of, Salesforce and its stockholders.

After the respective meetings of the parties’ boards of directors, Salesforce, Tableau, the founders and certain employees of Tableau executed the merger agreement, the conditional conversion letter agreement and the other transaction agreements, as applicable.

On June 10, 2019, prior to the opening of trading of Salesforce’ common stock and Tableau’s Class A common stock on the NYSE, Salesforce and Tableau issued a joint press release announcing the execution of the merger agreement and the other transaction agreements.

Tableau’s Reasons for the Offer and the Merger; Recommendation of the Tableau Board of Directors

In evaluating the merger agreement and the transactions the Tableau board of directors consulted with Tableau management, its financial advisor and its outside legal counsel. In recommending that the Tableau stockholders accept the offer and tender their shares of Tableau common stock to Offeror in the offer, the Tableau board of directors carefully considered a number of factors, including the following material factors that, in the view of the Tableau board of directors, weighed in favor of the transactions (which factors are not necessarily presented in order of relative importance):

 

   

The current and historical market prices of the shares of Class A common stock, including the market performance of such shares relative to those of other participants in Tableau’s industry and general market indices, and certain premiums observed over various periods by the Tableau board of directors (based on the implied price per share to be paid to Tableau stockholders based on the exchange ratio and the closing price per share of Salesforce common stock on June 7, 2019, the last trading day before the date of the merger agreement) which represented, in the Board’s view, a compelling premium to the standalone present value of Tableau to its stockholders and the historical market prices of the shares of Class A common stock, including a (i) 42.1% premium based on the $125.21 closing price per share of Class A common stock on June 7, 2019, the last trading day before the date of the merger agreement, (ii) a 49.7% premium based on the average closing trading price of $118.80 per share of Class A common stock during the 30-day period prior to June 7, 2019 and (iii) a 43.2% premium based on the average closing trading price of $124.19 per share of Class A common stock during the 90-day period prior to June 7, 2019.

 

   

The fact that the transaction consideration to be paid to the Tableau stockholders would be in the form of shares of Salesforce common stock, and, as such, would offer the Tableau stockholders the ability (i) to participate in the future growth of Salesforce and, indirectly, Tableau, including any potential appreciation that may be reflected in the value of the combined company (including any resulting synergies), and (ii) to attain liquidity should any such Tableau stockholder choose not to retain its shares of Salesforce common stock.

 

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The current and historical financial condition, results of operations, business, competitive position and prospects of Tableau, including:

 

   

its belief that the transactions would provide Tableau with substantial resources with which to expand its product offerings along with the potential to build and leverage Salesforce’s sales infrastructure to drive growth across domestic and international markets;

 

   

the ability to leverage the scale and financial capabilities of the combined company to make additional investments in innovation and technology and the potential to enhance existing products with Tableau’s data analytic capabilities to drive future growth and success of the combined company;

 

   

the business challenges that Tableau was facing, including the operational and business challenges and risks of continuing to build, scale and operate the business globally as an independent company, the current competitive environment in Tableau’s industry as well as general uncertainty surrounding forecasted economic conditions over the near and long terms;

 

   

Salesforce’s strong track record of successfully integrating prior acquisitions, including MuleSoft, Inc., which continues to have strong revenue growth following its acquisition by Salesforce;

 

   

the complementary nature of the cultures of the two companies, including with respect to corporate purpose and focus on customer success and innovation and vibrant user communities;

 

   

the expectation that Tableau’s management team will continue to play an important role in the combined company overseeing Tableau’s mission, products and services; and

 

   

the combined company’s business, operations, financial condition, product offerings, earnings, and prospects.

 

   

The fact that the transaction consideration Salesforce proposed reflected extensive negotiations between Tableau and Salesforce and their respective advisors, and the belief of the Tableau board of directors that the exchange ratio represents the best proposal and economic value available to Tableau’s stockholders, based upon an overall assessment, among other things, of the net present value of the risk-adjusted returns that are likely to accrue to the Tableau stockholders over the long term.

 

   

The oral opinion delivered by Goldman Sachs to the Tableau board of directors on June 9, 2019, subsequently confirmed in writing, that as of June 9, 2019, and based upon and subject to the factors and assumptions set forth therein, the transaction consideration to be paid to the holders of shares of Tableau common stock (other than Salesforce and its affiliates), taken in the aggregate, pursuant to the merger agreement was fair from a financial point of view to such holders (See “—Opinion of Tableau’s Financial Advisor”).

 

   

The fact that the transactions are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and as such generally no gain or loss should be recognized by the Tableau stockholders for U.S. federal income tax purposes in connection with the exchange of Tableau common stock for shares of Salesforce common stock pursuant to the offer or the merger.

 

   

The likelihood of completion of the transactions, particularly in light of the terms of the merger agreement and the closing conditions to the offer and the merger, including:

 

   

the conditions to the offer and the merger are limited and customary;

 

   

the fact that Salesforce’s obligations pursuant to the merger agreement are not subject to any financing condition or similar contingency that is based on Salesforce’s ability to obtain financing;

 

   

the ability of Tableau to specifically enforce the merger agreement, including Salesforce’s obligation to consummate the offer and the merger, subject to the terms and conditions therein;

 

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the obligation of the parties to use reasonable best efforts to obtain approvals or clearances from applicable antitrust and competition authorities, including a commitment by Salesforce during the pendency of the offer not to undertake certain acquisitions if doing so would reasonably be expected to prevent Salesforce from obtaining any such approvals or clearances prior to the outside date; and

 

   

the fact that the founders (i) have agreed to convert the shares of Class B common stock beneficially owned by such holders into shares of Class A common stock representing in the aggregate approximately 11.8% of the outstanding shares of Class A common stock in accordance with, and subject to, the terms and conditions of the Letter Agreement and (ii) have conveyed to the Tableau board of directors that the founders intend to tender their shares of Tableau common stock into the offer.

 

   

The terms of the merger agreement permitting Tableau to receive unsolicited alternative proposals, and the other terms and conditions of the merger agreement, including:

 

   

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

 

   

the ability of the Tableau board of directors under the merger agreement to withdraw or modify its recommendation that the Tableau stockholders tender their shares of Tableau common stock to Offeror pursuant to the offer in certain circumstances, including in connection with a superior offer or an intervening event; and

 

   

the provision of the merger agreement allowing the Tableau board of directors to terminate the merger agreement in order to accept and enter into a definitive agreement with respect to an unsolicited superior offer in certain circumstances, subject to providing Salesforce an opportunity to match such proposal and payment to Salesforce of a termination fee of $552 million, which amount the Tableau board of directors believes to be reasonable under the circumstances and taking into account the range of such termination fees in similar transactions.

The Tableau board of directors also considered a variety of risks and other potentially adverse factors in determining whether to approve the merger agreement and the transactions, including the following material factors (which factors are not necessarily presented in order of relative importance):

 

   

The potential risk of diverting Tableau management attention and resources from the operation of Tableau’s business and towards completion of the offer and the merger.

 

   

The uncertainty about the effect of the proposed transactions, regardless of whether the transactions are completed, on Tableau’s employees, customers and other parties, which may impair Tableau’s ability to attract, retain and motivate key personnel, and could cause customers, suppliers and others to seek to change existing business relationships with Tableau.

 

   

The fact that no cash consideration is being paid in connection with the offer and the merger and that the exchange ratio is fixed, which could result in the Tableau stockholders being adversely affected by a decrease in the trading price of Salesforce common stock during the pendency of the offer.

 

   

The restrictions in the merger agreement on the conduct of Tableau’s business prior to the consummation of the merger, which may delay or prevent Tableau from undertaking business or other opportunities that may arise prior to the consummation of the transactions (see “Merger Agreement—Conduct of Business Before Completion of the Merger—Restrictions on Tableau’s Operations”).

 

   

The risk that the conditions to the offer may not be satisfied and that, therefore, the offer and the merger may not be consummated.

 

   

The possibility that, under certain circumstances, Tableau may be required to pay Salesforce a termination fee of $552 million (see “Merger Agreement—Termination Fee and Expenses”).

 

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The fact that Tableau’s executive officers and directors have financial interests in the transactions that are not shared by all Tableau Stockholders (see “Interests of Certain Persons in the Transaction” and “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements between Salesforce, the Offeror and the Current Executive Officers, Directors and Affiliates of Tableau” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document).

 

   

The costs to be incurred in connection with the transactions, regardless of whether the transactions are completed and the risks and contingencies relating to the announcement and pendency of the transactions and the risks and costs to Tableau if the transactions are not completed on a timely basis or at all.

 

   

The challenges of combining the businesses, operations and workforces of Salesforce and Tableau and the risk that anticipated strategic and other benefits to Salesforce and Tableau following completion of the merger, including any expected synergies, would not be realized or would take longer to realize than expected.

 

   

The regulatory and other approvals required in connection with the offer and the merger and the risk that such regulatory approvals will not be received in a timely manner or at all or may impose unacceptable conditions.

 

   

Various other risks associated with the transactions and the business of Tableau and the combined company described in the “Forward-Looking Statements” and in “Item 8—Additional Information—Cautionary Statement Regarding Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document, and as detailed in Tableau’s and Salesforce’s filings with the SEC (see “—Where to Obtain More Information”).

At a meeting held on June 9, 2019, after careful consideration, the Tableau board of directors, among other things, unanimously:

 

   

determined that the merger agreement and the transactions contemplated thereby, including the offer and the merger are fair to, and in the best interests of, Tableau and the Tableau stockholders;

 

   

determined that it is in the best interests of Tableau and its stockholders and declared it advisable to enter into the merger agreement;

 

   

approved the execution and delivery by Tableau of the merger agreement, the performance by Tableau of its covenants and agreements contained in the merger agreement and the consummation of the offer, the merger and the other transactions contemplated by the merger agreement upon the terms and subject to the conditions contained in the merger agreement; and

 

   

resolved to recommend, and recommended, that the Tableau stockholders accept the offer and tender their shares of Tableau common stock to the Offeror pursuant to the offer.

Accordingly, the Tableau Board unanimously recommends that the Tableau stockholders tender their shares of Tableau common stock pursuant to the offer.

The foregoing discussion of reasons of the Tableau board of directors for its recommendation to accept the offer is not meant to be exhaustive, but addresses the material information and factors considered by the Tableau board of directors in connection with its recommendation. In view of the wide variety of reasons considered by the Tableau board of directors in connection with the evaluation of the offer and the complexity of these matters, the Tableau board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific reasons considered in reaching its determination and recommendation. Rather, the Tableau board of directors made its determinations and recommendations based on the totality of the information presented to them, and the judgments of individual members of the Tableau board of directors may have been influenced to a

 

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greater or lesser degree by different reasons. In arriving at their respective recommendations, the members of the Tableau board of directors considered the interests of our executive officers and directors (see “Interests of Certain Persons in the Transaction” and “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements between Salesforce, the Offeror and the Current Executive Officers, Directors and Affiliates of Tableau” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document).

The foregoing description of the consideration by the Tableau board of directors of the reasons supporting the merger agreement and the transactions is forward-looking in nature. This information should be read in light of the factors discussed in “Forward-Looking Statements” and in “Item 8—Additional Information—Cautionary Statement Regarding Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.

Salesforce’s Reasons for the Offer and the Merger

In reaching its decision to approve the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement, the Salesforce board of directors consulted with Salesforce’s management, as well as Salesforce’s legal and financial advisors, and considered a number of factors, including the following factors which it viewed as supporting its decision to approve the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement (not in any relative order of importance):

 

   

the view that Tableau is a premier analytics platform, which will allow Salesforce to play a greater role in driving digital transformation;

 

   

the view that Tableau’s products will enhance Salesforce’s value to its customers by helping customers to better visualize and analyze data to make smarter and faster decisions;

 

   

the view that Tableau’s products, when integrated with Salesforce’s products, presents an opportunity to improve customer satisfaction and lower attrition;

 

   

the view that Tableau addresses a multi-billion dollar market opportunity that is growing at a fast rate;

 

   

Tableau’s large enterprise customer base, which also includes many of Salesforce’s largest customers;

 

   

the view of Salesforce’s customers that data analytics and visualization tools are an important part of the broader digital transformation initiative and a high priority;

 

   

Tableau’s demonstrated ability to meaningfully scale its business with attractive growth prospects;

 

   

the expectation that the combined company would create additional growth opportunities by leveraging the respective strengths of each business, which is expected to create long-term stockholder value;

 

   

the strength of Tableau’s management team and engineering team, and the cultural synergies between the two companies;

 

   

the view that the terms and conditions of the merger agreement and the transactions contemplated therein, including the representations, warranties, covenants, closing conditions and termination provisions, are comprehensive and favorable to completing the proposed transactions;

 

   

the fact that the merger agreement places limitations on Tableau’s ability to seek an alternative proposal and requires Tableau to pay Salesforce a termination fee of $552 million if Salesforce or Tableau terminates the merger agreement under certain circumstances, including if Tableau consummates or enters into an agreement with respect to a competing acquisition proposal within a certain time period;

 

   

the anticipated short time period from announcement to completion achievable through the exchange offer structure and the expectation that the conditions to the consummation of the offer and the merger will be satisfied on a timely basis;

 

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the amount and form of consideration to be paid in the transaction, including the fact that the exchange ratio is fixed;

 

   

current financial market conditions and the current and historical market prices and volatility of, and trading information with respect to, shares of Salesforce common stock and Tableau Class A common stock;

 

   

the Salesforce board of directors’ and Salesforce’s management’s familiarity with the business operations, strategy, earnings and prospects of each of Salesforce and Tableau and the scope and results of the due diligence investigation of Tableau conducted by Salesforce;

 

   

the entry into the letter agreement by Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock prior to the expiration of the offer, subject to certain terms and conditions, and

 

   

Tableau’s management’s recommendation in favor of the offer and the merger.

The Salesforce board of directors also considered a variety of uncertainties and risks and other potentially negative factors concerning the transactions, including the following (not in any relative order of importance):

 

   

the risk that the potential benefits of the acquisition may not be fully or even partially achieved, or may not be achieved within the expected time frame;

 

   

costs associated with the transactions;

 

   

the risk that the transactions may not be consummated despite the parties’ efforts or that the closing of the transactions may be unduly delayed;

 

   

the risks associated with the occurrence of events which may materially and adversely affect the operations or financial condition of Tableau and its subsidiaries, which may not entitle Salesforce to terminate the merger agreement;

 

   

the challenges and difficulties relating to combining the operations of Salesforce and Tableau;

 

   

the risk of diverting Salesforce’s management’s focus and resources from other strategic opportunities and from operational matters while working to implement the acquisition of Tableau, and other potential disruptions associated with combining the two companies;

 

   

the effects of general competitive, economic, political and market conditions and fluctuations on Salesforce, Tableau or the combined company; and

 

   

various other risks associated with the acquisition and the businesses of Salesforce, Tableau and the combined company, some of which are described under “Risk Factors.”

The Salesforce board of directors concluded that the potential negative factors associated with the acquisition were outweighed by the potential benefits of completing the offer and the merger. Accordingly, the Salesforce board of directors approved the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement.

The foregoing discussion of the information and factors considered by the Salesforce board of directors is not intended to be exhaustive, but includes the material positive and negative factors considered by the Salesforce board of directors. In view of the variety of factors considered in connection with its evaluation of the acquisition, the Salesforce board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination. In addition, individual directors may have given different weights to different factors. The Salesforce board of directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Salesforce board of directors based its determination on the totality of the information presented.

 

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Projected Financial Information

Although Tableau has publicly issued limited short-term guidance concerning certain aspects of its expected financial performance, it does not, as a matter of course, make public disclosure of detailed forecasts or projections of its expected financial performance for extended periods due to, among other things, the inherent difficulty of accurately predicting future periods and the likelihood that the underlying assumptions and estimates may prove incorrect. However, in connection with the transaction with Salesforce, Tableau’s senior management prepared and approved for use certain unaudited prospective financial information which was provided to and considered by the Tableau board of directors and Salesforce, and which was provided to Goldman Sachs, in each case as set forth herein.

Tableau’s management initially prepared certain non-public, unaudited prospective financial information for calendar years 2019 through 2023 in February 2019 and such non-public, unaudited prospective financial information was discussed with, and approved for use by, the Tableau board of directors on February 25, 2019 (which we refer to as the “Initial Five-Year Plan”) in connection with the evaluation of the strategic transaction with Salesforce. In March, senior management subsequently made certain unaudited prospective extrapolations based on the Initial Five-Year Plan for the calendar years 2024 through 2033, which were provided to Goldman Sachs. In May, the Initial Five-Year Plan was subsequently adjusted to reflect Tableau’s actual operating results for the first quarter of 2019 and Tableau’s revised estimated results for the second quarter of 2019 (which we refer to as the “Updated Five-Year Plan”). As compared to the Initial Five-Year Plan, the Updated Five-Year Plan reflected, with respect to the year-ended December 31, 2019, (i) lower revenue based on the actual operating results for the first quarter of 2019 and lower estimated revenue outlook for the second quarter of 2019 and (ii) decreased operating income and cash flows as a result of such reduced revenue performance and outlook and the timing of certain expenses during the balance of calendar year 2019. The Updated Five-Year Plan (excluding the impact of stock-based compensation and any related extrapolations) was shared with representatives of Salesforce on May 19, 2019 in connection with their due diligence review. Senior management also approved the Updated Five-Year Plan and the related extrapolations for calendar years 2024 through 2033 for use by Goldman Sachs on May 30, 2019 and directed Goldman Sachs to use the Updated Five-Year Plan and the related extrapolations for calendar years 2024 through 2033 in connection with performing its financial analyses in connection with its opinion, as described in more detail in the section of this document titled “Opinion of Tableau’s Financial Advisor” below. In addition to the Initial Five-Year Plan and the Updated Five-Year Plan, Tableau management also prepared unaudited, nonpublic prospective pro forma financial information about the combined company using publicly available Institutional Brokers’ Estimate System (which we refer to as “IBES”) estimates for Salesforce for future periods and the Updated Five-Year Plan for Tableau future periods (the “Pro Forma Information”), which was made available to the Tableau Board and approved by Tableau for Goldman Sachs’ use in connection with its opinion. The Pro Forma Information does not give effect to any anticipated synergies or potential purchase accounting adjustments that may be associated with the merger. Neither the Salesforce IBES estimates included in the Pro Forma Information, nor the Pro Forma Information, was provided, reviewed or approved by Salesforce or any of its representatives, and they should not be read as indicative of Salesforce’s expected actual results or internal forecasts.

We refer to any of the Initial Five-Year Plan, the Updated Five-Year and related extrapolated projections for calendar years 2024 through 2033 and the Pro Forma Information as the “management projections.” The management projections (other than the Pro Forma Information) were prepared by Tableau on a stand-alone basis and do not take into account the transaction, including any costs incurred in connection with the offer or the other transactions contemplated thereby or any changes to Tableau’s operations or strategy that may be implemented after the completion of the merger. As a result, actual results likely will differ, and may differ materially, from those contained in the management projections.

 

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The information and tables set forth below are included solely to give Tableau stockholders access to relevant portions of the management projections and are not included in this document to influence any Tableau stockholder to tender their shares of Tableau common stock or for any other purpose.

Initial Five-Year Plan and Related Extrapolations

($ in millions)

 

FYE December 31,

  2019E     2020E     2021E     2022E     2023E     2024E     2025E     2026E     2027E     2028E     2029E     2030E     2031E     2032E     2033E  

Revenue

  $ 1,418     $ 1,773     $ 2,180     $ 2,677     $ 3,297     $ 4,023     $ 4,827     $ 5,696     $ 6,607     $ 7,532     $ 8,436     $ 9,280     $ 10,022     $ 10,724     $ 11,367  

Gross Profit (non-GAAP)(1)

  $ 1,275     $ 1,598     $ 1,961     $ 2,409     $ 2,975     $ 3,610     $ 4,307     $ 5,054     $ 5,830     $ 6,608     $ 7,359     $ 8,049     $ 8,642     $ 9,194     $ 9,689  

EBIT (non-GAAP)(2)

  $ 192     $ 315     $ 459     $ 644     $ 889     $ 1,080     $ 1,311     $ 1,564     $ 1,834     $ 2,113     $ 2,392     $ 2,659     $ 2,901     $ 3,137     $ 3,359  

(-) Stock-Based Compensation

  $ (269   $ (307   $ (351   $ (387   $ (423   $ (484   $ (537   $ (594   $ (658   $ (727   $ (803   $ (886   $ (978   $ (1,032   $ (1,078

EBIT (non-GAAP)(3)

  $ (77   $ 8     $ 108     $ 257     $ 466     $ 596     $ 774     $ 969     $
 
 
1,176
 
 
  $
 
 
1,386
 
 
  $
 
 
1,588
 
 
  $
 
 
1,772
 
 
  $ 1,923     $ 2,105     $ 2,281  

(-) Cash Taxes

  $ (14   $ (25   $ (48   $ (48   $ (52   $ (89   $ (116   $ (145   $ (176   $ (208   $ (238   $ (266   $ (337   $ (421   $ (502

(+) Depreciation & Amortization

  $ 32     $ 36     $ 44     $ 54     $ 66     $ 70     $ 72     $ 71     $ 83     $ 94     $ 105     $ 116     $ 125     $ 134     $ 142  

(-) CapEx

  $ (60   $ (40   $ (40   $ (40   $ (40   $ (50   $ (60   $ (71   $ (83   $ (94   $ (105   $ (116   $ (125   $ (134   $ (142

(+) (Inc.) / Dec. in Working Capital and Deferred Revenue

  $ (24   $ (59   $ (23   $ (28   $ (55   $ (107   $ (171   $ (255   $ (322   $ (363   $ (314   $ (292   $ (159   $ (87   $ (61

Unlevered Free Cash Flow(4)

  $ (143   $ (80   $ 40     $ 194     $ 385     $ 419     $ 499     $ 569     $ 678     $ 815     $ 1,036     $ 1,214     $ 1,428     $ 1,597     $ 1,718  

% Margin

    (10 )%      (5 )%      2     7     12     10     10     10     10     11     12     13     14     15     15

 

(1)

Excludes the impact of stock-based compensation.

(2)

EBIT calculated as net income before interest and taxes and is presented before the impact of stock-based compensation.

(3)

EBIT calculated as net income before interest and taxes and is presented after the impact of stock-based compensation.

(4)

Includes the impact of stock-based compensation.

Updated Five-Year Plan and Related Extrapolations

($ in millions)

 

FYE December 31,

  9mos
Ended
12/31/19
    2020E     2021E     2022E     2023E     2024E     2025E     2026E     2027E     2028E     2029E     2030E     2031E     2032E     2033E  

Revenue

  $ 1,116     $ 1,773     $ 2,180     $ 2,677     $ 3,297     $ 4,023     $ 4,827     $ 5,696     $ 6,607     $ 7,532     $ 8,436     $ 9,280     $ 10,022     $ 10,724     $ 11,367  

Gross Profit (non-GAAP)(1)

  $ 1,012     $ 1,598     $ 1,961     $ 2,409     $ 2,975     $ 3,610     $ 4,307     $ 5,054     $ 5,830     $ 6,608     $ 7,359     $ 8,049     $ 8,642     $ 9,194     $ 9,689  

EBIT (non-GAAP)(2)

  $ 183     $ 315     $ 459     $ 644     $ 889     $ 1,080     $ 1,311     $ 1,564     $ 1,834     $ 2,113     $ 2,392     $ 2,659     $ 2,901     $ 3,137     $ 3,359  

(-) Stock-Based Compensation

  $ (204   $ (307   $ (351   $ (387   $ (423   $ (484   $ (537   $ (594   $ (658   $ (727   $ (803   $ (886   $ (978   $ (1,032   $ (1,078

EBIT (non-GAAP)(3)

  $ (21   $ 8     $ 108     $ 257     $ 466     $ 596     $ 774     $ 969     $ 1,176     $ 1,386     $ 1,588     $ 1,772     $ 1,923     $ 2,105     $ 2,281  

(-) Cash Taxes

  $ (10   $ (25   $ (48   $ (48   $ (52   $ (89   $ (116   $ (145   $ (176   $ (208   $ (238   $ (266   $ (337   $ (421   $ (502

(+) Depreciation & Amortization

  $ 47     $ 67     $ 77     $ 87     $ 100     $ 104     $ 106     $ 105     $ 118     $ 129     $ 140     $ 152     $ 162     $ 171     $ 179  

(-) CapEx

  $ (43   $ (40   $ (40   $ (40   $ (40   $ (50   $ (60   $ (71   $ (83   $ (94   $ (105   $ (116   $ (125   $ (134   $ (142

(+) (Inc.) / Dec. in Working Capital (ex-Deferred Revenue)

  $ (161   $ (185   $ (190   $ (224   $ (249   $ (316   $ (396   $ (490   $ (564   $ (600   $ (541   $ (500   $ (337   $ (251   $ (208

(+) Inc. / (Dec.) in Deferred Revenue

  $ 66     $ 95     $ 134     $ 163     $ 159     $ 174     $ 191     $ 200     $ 207     $ 202     $ 192     $ 172     $ 142     $ 128     $ 109  

Unlevered Free Cash Flow(4)

  $ (121   $ (80   $ 40     $ 194     $ 385     $ 419     $ 499     $ 569     $ 678     $ 815     $ 1,036     $ 1,214     $ 1,428     $ 1,597     $ 1,718  

% Margin

    (11 )%      (5 )%      2     7     12     10     10     10     10     11     12     13     14     15     15

 

(1)

Excludes the impact of stock-based compensation.

(2)

EBIT calculated as net income before interest and taxes and is presented before the impact of stock-based compensation.

(3)

EBIT calculated as net income before interest and taxes and is presented after the impact of stock-based compensation.

(4)

Includes the impact of stock-based compensation.

Pro Forma Information(1)

($ in millions)

 

CYE December 31,

   2019      2020      2021  

Revenue

   $ 17,607      $ 21,163      $ 25,277  
  

 

 

    

 

 

    

 

 

 

Gross Profit

   $ 13,805      $ 16,606      $ 19,832  
  

 

 

    

 

 

    

 

 

 

Non-GAAP Operating Income

   $ 2,973      $ 4,038      $ 5,232  
  

 

 

    

 

 

    

 

 

 

Unlevered Free Cash Flow

   $ 3,672      $ 4,438      $ 5,482  
  

 

 

    

 

 

    

 

 

 

 

(1)

As discussed above and below, the Pro Forma Information was not provided, reviewed or approved by Salesforce or any of its representatives, and should not be read as indicative of Salesforce’s expected actual results or internal forecasts.

 

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Important Information About the Management Projections

The management projections were not prepared with a view toward public disclosure or toward complying with GAAP, nor were they prepared with a view toward compliance with the published guidelines of the SEC, or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of projections of prospective financial information. The non-GAAP financial measures used in the Updated Five-Year Plan and the related extrapolations for calendar years 2024 through 2033 were approved by Tableau for Goldman Sachs’ use in connection with its opinion and were relied upon by the Tableau board of directors in connection with its consideration of the offer, the merger and the transaction consideration. The SEC rules, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure, do not apply to non-GAAP financial measures provided to Goldman Sachs or to the Tableau board of directors in connection with a proposed business combination like the merger if the disclosure is included in a document like this document. In addition, reconciliations of non-GAAP financial measures to a GAAP financial measure were not relied upon by Goldman Sachs for purposes of its opinion or by the Tableau board of directors in connection with its consideration of the merger agreement, the offer, the merger and the transaction consideration. Accordingly, Tableau has not provided a reconciliation of the financial measures included in the management projections to the relevant GAAP financial measures. In addition, the management projections were not prepared with a view towards complying with GAAP. The management projections may differ from published analyst estimates and forecasts and do not take into account any events or circumstances after the date they were prepared, including the announcement of the merger.

While the management projections are presented with numerical specificity, the management projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond Tableau management’s control. Further, given that the management projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year beyond their preparation. Important factors that may affect actual results and may result in such projections not being achieved include: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the inability to complete the offer or merger, or the failure to satisfy other conditions to completion of the offer or the merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the completion of the merger, and risks and uncertainties pertaining to Tableau’s business, including the risks and uncertainties detailed in Tableau’s public periodic filings with the SEC. In addition, the ability to achieve the management projections may depend on, in part, whether or not the strategic goals, objectives and targets are reached over the applicable period. The assumptions upon which the management projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which Tableau operates, and the risks and uncertainties described in the section of this document titled “Forward-Looking Statements” and in “Item 8—Additional Information—Cautionary Statement Regarding Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document, all of which are difficult or impossible to predict accurately and many of which are beyond Tableau’s and our control. The management projections also reflect assumptions by Tableau management that are subject to change and are susceptible to multiple interpretations and periodic revisions based on actual results, revised prospects for the Tableau business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated when such projections were prepared.

Accordingly, there can be no assurance that the management projections will be realized, and actual results may differ, and may differ materially, from those shown. The inclusion of the management projections in this document should not be regarded as an indication that any of Tableau, Goldman Sachs, Salesforce, the Offeror or any of their respective affiliates, officers, directors, advisors or other representatives considered or consider the management projections necessarily predictive of actual future events, and the management projections should

 

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not be relied upon as such. None of Tableau, Goldman Sachs, Salesforce, the Offeror or any of their respective affiliates, officers, directors, advisors or other representatives can give any assurance that actual results will not differ from the management projections. None of Tableau, Goldman Sachs, Salesforce, the Offeror or any of their respective affiliates, officers, directors, advisors or other representatives has made or makes any representation to any stockholder or other person regarding the ultimate performance of Tableau compared to the information contained in the management projections or that forecasted results will be achieved.

In addition, the management projections have not been updated or revised to reflect information or results after the date they were prepared or as of the date of this document, and except as required by applicable securities laws, Tableau does not intend to update or otherwise revise the management projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the underlying assumptions are shown to be in error.

The management projections (for the avoidance of doubt, including the Pro Forma Information) were prepared by, and are the responsibility of, Tableau’s management. PricewaterhouseCoopers LLP, Ernst & Young LLP and Salesforce have not audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the management projections and, accordingly, do not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report incorporation by reference relates to Tableau’s previously issued financial statements. It does not extend to the management projections and should not be read to do so.

Opinion of Tableau’s Financial Advisor

Goldman Sachs rendered its opinion to the Tableau board of directors that, as of June 9, 2019 and based upon and subject to the factors and assumptions set forth therein, the transaction consideration to be paid to the holders of Tableau common stock (other than Salesforce and its affiliates) taken in the aggregate, pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated June 9, 2019, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. The summary of the Goldman Sachs opinion contained in this document is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs provided advisory services and its opinion for the information and assistance of Tableau board of directors in connection with its consideration of the transactions contemplated by the merger agreement. The Goldman Sachs opinion is not a recommendation as to whether or not any holder of Tableau common stock should tender such shares of Tableau common stock in connection with the offer.

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

 

   

the merger agreement;

 

   

annual reports to stockholders and Annual Reports on Form 10-K of Tableau and Salesforce for the five fiscal years ended December 31, 2018 and January 31, 2019, respectively.

 

   

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Tableau and Salesforce;

 

   

certain other communications from Tableau and Salesforce to their respective stockholders;

 

   

certain publicly available research analyst reports for Tableau and Salesforce; and

 

   

certain internal financial analyses and forecasts for Tableau and certain financial analyses and forecasts for Salesforce pro-forma for the transactions, in each case, as prepared by the management of Tableau and approved for Goldman Sachs’ use by Tableau (which we refer to as the “Forecasts”). For more information regarding the Forecasts, see above under the caption “—Projected Financial Information”.

 

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

For purposes of rendering its opinion, Goldman Sachs, with Tableau’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, Goldman Sachs, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with Tableau’s consent that the Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of Tableau. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of Tableau or Salesforce or any of their respective subsidiaries and Goldman Sachs was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the transactions will be obtained without any adverse effect on Tableau or Salesforce or on the expected benefits of the transactions in any way meaningful to its analysis. Goldman Sachs also assumed that the transactions will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs’ opinion does not address the underlying business decision of Tableau to engage in the transactions or the relative merits of the transactions as compared to any strategic alternatives that may be available to Tableau; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs was not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, Tableau or any other alternative transaction. Goldman Sachs’ opinion addresses only the fairness from a financial point of view to the holders of Tableau common stock (other than Salesforce and its affiliates), as of the date of the opinion, of the transaction consideration to be paid to such holders, taken in the aggregate, pursuant to the merger agreement. Goldman Sachs’ opinion does not express any view on, and does not address, any other term or aspect of the merger agreement or the transactions or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the transactions, including, any allocation of the transaction consideration payable pursuant to the merger agreement, including among the holders of Class A common stock and the holders of Class B common stock, the fairness of the transactions to, or any transaction consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of Tableau; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Tableau or any class of such persons in connection with the transactions, whether relative to the transaction consideration to be paid to the holders (other than Salesforce and its affiliates) of Tableau common stock, taken in the aggregate, pursuant to the merger agreement or otherwise. Goldman Sachs does not express any opinion as to the prices at which shares of Salesforce common stock will trade at any time or as to the impact of the transactions on the solvency or viability of Tableau or Salesforce or the ability of Tableau or Salesforce to pay their respective obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary market and other conditions, as in effect on, and the information made available to it as of the date of the opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the Tableau board of directors in connection with its consideration of the transactions and Goldman Sachs’ opinion does not constitute a recommendation as to whether or not any holder of shares of Tableau common stock should tender such shares of Tableau common stock in connection with the offer. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

 

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The following is a summary of the material financial analyses delivered by Goldman Sachs to the Tableau board of directors in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before June 7, 2019, the last trading day before the public announcement of the transactions, and is not necessarily indicative of current market conditions.

Historical Exchange Ratio Analysis. Goldman Sachs reviewed the historical trading prices for Tableau common stock and Salesforce common stock for the 52-week period prior to June 7, 2019. Goldman Sachs calculated historical average exchange ratios over various periods by first dividing the closing price per share of Tableau common stock on each trading day during the period by the closing price per share of Salesforce common stock on the same trading day, and subsequently taking the average of these daily historical exchange ratios over such periods (such period, the “Average Exchange Ratio”). Goldman Sachs then calculated the premiums implied by the exchange ratio to the historical average exchange ratio over various periods. The following table presents the results of this analysis:

 

Historical Date or Period

   Exchange Ratio      Premium of Exchange Ratio
per Merger Agreement to
Historical Average
 

Exchange Ratio per the merger agreement

     1.103x     

June 7, 2018

     0.776x        42.1

52-week high

     0.940x        17.3

5-day period ending June 7, 2019

     0.754x        46.3

10-day period ending June 7, 2019

     0.745x        48.1

30-day period ending June 7, 2019

     0.755x        46.2

90-day period ending June 7, 2019

     0.783x        41.0

Historical Stock Trading Analysis. Goldman Sachs reviewed the historical trading prices and volumes of Tableau common stock for the 90-day period ended June 7, 2019. This analysis indicated that the implied price per share to be paid to Tableau stockholders based on the exchange ratio of 1.103x pursuant to the merger agreement represented:

 

   

a premium of 52.1% based on the average closing trading price of $116.93 per share of Tableau common stock during the 5-day period prior to June 7, 2019;

 

   

a premium of 54.6% based on the average closing trading price of $115.09 per share of Tableau common stock during the 10-day period prior to June 7, 2019;

 

   

a premium of 49.7% based on the average closing trading price of $118.80 per share of Tableau common stock during the 30-day period prior to June 7, 2019; and

 

   

a premium of 43.2% based on the average closing trading price of $124.19 per share of Tableau common stock during the 90-day period prior to June 7, 2019.

Illustrative Discounted Cash Flow Analysis. Using the Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis on Tableau. Using discount rates ranging from 8.0% to 10.0%, reflecting estimates of Tableau’s weighted average cost of capital, Goldman Sachs discounted to present value as of Tableau’s latest reported balance sheet date of March 31, 2019 using the mid-year convention, (i) estimates of unlevered free cash flow for Tableau for the nine months ended December 31, 2019 and years 2020 through 2033 as reflected in the Forecasts and (ii) a range of illustrative terminal values for Tableau, which were calculated by applying perpetuity growth rates ranging from 2.5% to 4.5%, to a terminal year estimate of free cash flow to be generated

 

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by Tableau as reflected in the Forecasts (which analysis implied exit terminal year multiples for next twelve months net operating profit after tax ranging from 13.5x to 28.7x). Goldman Sachs derived such discount rates by application of the Capital Asset Pricing Model (“CAPM”), which requires certain company-specific inputs, including Tableau’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for Tableau, as well as certain financial metrics for the United States financial markets generally. The range of perpetuity growth rates was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account the Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs derived ranges of illustrative enterprise values for Tableau by adding the ranges of present values it derived above. Goldman Sachs then added to the range of illustrative enterprise values it derived for Tableau the $1.06 billion of net cash held by Tableau, in each case, as provided by the management of Tableau to derive a range of illustrative equity values for Tableau. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Tableau (95.6 million shares), as provided by the management of Tableau to calculate a range of implied equity values per share of Tableau common stock of $114 to $239, as rounded to the nearest dollar, which implied an illustrative range of exchange ratios of 0.710x to 1.480x per share of Tableau common stock based on the closing price per share of $161.27 of Salesforce common stock as of June 7, 2019.

Precedent Premium Analysis. Using publicly available information, Goldman Sachs reviewed and analyzed acquisition premia for certain transactions, as described below.

Goldman Sachs calculated the 25th and 75th percentile premia relative to the target company’s last undisturbed stock price prior to the announcement of certain selected transactions See the table titled, “Selected Transactions” on page 56 for the applicable transactions and premia. While none of the companies that participated in the selected transactions are directly comparable to Tableau, the companies that participated in the selected transactions are companies with operations, results, market sizes and product profiles that, for the purposes of analysis, may be considered similar to that of Tableau. This analysis indicated a 25th and 75th percentile premium of 11.0% and 33.8%, respectively. Using this analysis, Goldman Sachs applied an illustrative reference range of premia ranging from 11.0% to 33.8% to the closing price per share of Class A common stock of $125.21 per share as of June 7, 2019, which was one trading day prior to the announcement of the transactions contemplated by the merger agreement, and calculated a range of implied equity values per share of Tableau common stock of $139 to $168, as rounded to the nearest dollar, which implied an illustrative range of exchange ratios of 0.862x to 1.039x per share of Tableau common stock based on the closing price per share of Salesforce common stock of $161.27 as of June 7, 2019.

Goldman Sachs also calculated the 25th and 75th percentile premia relative to the target company’s stock price 30 trading days prior to the last undisturbed date prior to the announcement of certain selected transactions. See the table titled, “Selected Transactions” on page 56 for the applicable transactions and premia. While none of the companies that participated in the selected transactions are directly comparable to Tableau, the companies that participated in the selected transactions are companies with operations, results, market sizes and product profiles that, for the purposes of analysis, may be considered similar to that of Tableau. This analysis indicated a 25th and 75th percentile premium of 21.2% and 45.5%, respectively. Using this analysis, Goldman Sachs applied an illustrative reference range of premia ranging from 21.2% to 45.5% to the closing price per share of Class A common stock of $120.70 per share as of April 26, 2019, which was 30 trading days prior to the announcement of the transactions contemplated by the merger agreement, and calculated a range of implied equity values per share of Tableau common stock of $146 to $176, as rounded to the nearest dollar, which implied a range of illustrative exchange ratios of 0.907x to 1.089x per share of Tableau common stock based on the closing price per share of Salesforce common stock of $161.27 as of June 7, 2019.

Goldman Sachs also reviewed and analyzed acquisition premia for transactions announced during the time period from January 1, 2016 through June 7, 2019, involving a public company based in the United States in the technology industry as the target, where the disclosed transaction value was over $500 million, and calculated the

 

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median and 25th and 75th percentile premia (discount) relative to the target company’s stock price at its 52-week high prior to the announcement of the applicable transaction. This analysis indicated a median 25th and 75th percentile premium of 6.0%, (2.2%) and 11.6%, respectively. Using this analysis, Goldman Sachs applied an illustrative reference range of premia (discount) of (2.2%) to 11.6% to the closing price per share of Class A common stock of $136.64 per share as of March 21, 2019, which was the date that the Class A common stock reached its 52-week high prior to the announcement of the transactions contemplated by the merger agreement, and calculated a range of implied equity values per share of Tableau common stock of $134 to $152, as rounded to the nearest dollar, which implied a range of illustrative exchange ratios of 0.829x to 0.946x per share of Tableau common stock based on the closing price per share of Salesforce common stock of $161.27 as of June 7, 2019.

Precedent Transactions Analysis. Goldman Sachs analyzed certain information relating to the following transactions in the software industry announced between October 2011 and June 2019.

 

Selected Transactions  

Announcement Date

 

Acquirer

 

Target

 

NTM
Transaction
Revenue
Multiple

 

Growth-
Adjusted
NTM
Transaction
Revenue
Multiple

  Premium to
Undisturbed
Date
    Premium to
30 Trading
Days Prior
to
Undisturbed
Date
 
October 2011   Oracle Corp.   RightNow Technologies, Inc.   6.5x   0.34x     20%       35%  
December 2011   SAP SE   SuccessFactors, Inc.   8.7x   0.23x     52%       67%  
February 2012   Oracle Corp.   Taleo Corp   5.3x   0.23x     18%       17%  
May 2012   SAP America, Inc.   Ariba, Inc.   7.7x   0.59x     20%       38%  
December 2012   Oracle Corp.   Eloqua, Inc.   8.1x   0.41x     31%       15%  
June 2013   Salesforce   ExactTarget, Inc.   6.4x   0.26x     53%       70%  
July 2013   Cisco Systems, Inc.   Sourcefire Inc.   8.1x   0.32x     29%       40%  
December 2013   Oracle Corp.   Responsys, Inc.   6.7x   0.37x     38%       73%  
September 2014   SAP America, Inc.   Concur Technologies, Inc.   9.9x   0.46x     28%       41%  
October 2015   Silver Lake Management, LLC /Thoma Bravo, LLC   Solarwinds Corp.   7.7x   0.42x     27%       48%  
April 2016   Oracle Corp.   Textura Corp.   6.1x   0.24x     31%       48%  
May 2016   Vista Equity Partners   Marketo, Inc.   5.9x   0.22x     64%       80%  
June 2016   Microsoft Corp.   LinkedIn Corp.   6.8x   0.32x     50%       56%  
June 2016   Salesforce   Demandware Inc.   8.9x   0.34x     56%       74%  
July 2016   Oracle Corp.   NetSuite Inc.   9.2x   0.31x     44%       38%  
January 2018   SAP America, Inc.   Callidus Software, Inc.   7.9x   0.43x     10%       26%  
March 2018   Salesforce   MuleSoft, Inc.   15.7x   0.40x     36%       91%  
June 2018   Workday, Inc.   Adaptive Insights, Inc.   10.9x   0.45x     NA       NA  
July 2018   Broadcom Inc.   CA, Inc.   4.3x   NM     20%       25%  
October 2018   Twilio Inc.   SendGrid, Inc.   11.5x   0.46x     19%       NA  
October 2018   IBM Corp.   Red Hat, Inc.   9.4x   0.65x     63%       32%  
October 2018   Cloudera, Inc.   Hortonworks, Inc.   5.3x   0.25x     NA       NA  
November 2018   Vista Equity Partners   Apptio, Inc.   7.1x   0.47x     53%       NA  
December 2018   Vista Equity Partners   Mindbody, Inc.   6.7x   0.28x     68%       35%  
February 2019   Hellman & Friedman   The Ultimate Software Group, Inc.   8.3x   0.42x     19%       40%  

While none of the companies that participated in the selected transactions are directly comparable to Tableau, the companies that participated in the selected transactions are companies with operations, results, market sizes and product profiles that, for the purposes of analysis, may be considered similar to that of Tableau.

For each of the selected transactions, Goldman Sachs calculated and compared the estimated transaction enterprise value, which is (x) the announced per share consideration paid or payable in the applicable transaction multiplied by the number of fully diluted outstanding shares of the target company plus (y) the net debt of the

 

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target company, in each case based on data obtained from public filings, as a multiple of the target’s estimated next twelve months revenue from the announcement date of the transaction based on Institutional Broker’s Estimate System (“IBES”) consensus estimates and Wall Street Research (which we refer to as the “NTM transaction revenue multiple”). Goldman Sachs then applied an illustrative range of NTM transaction revenue multiples of 7.0x to 10.0x to the next twelve months revenue of Tableau reflected in the Forecasts, and calculated a range of implied equity values per share of Tableau common stock of $121 to $167, as rounded to the nearest dollar, which implied an illustrative range of exchange ratios of 0.748x to 1.038x per share of Tableau common stock based on the closing price per share of $161.27 of Salesforce common stock as of June 7, 2019. The illustrative range was selected by Goldman Sachs based on its professional judgment and experience, taking into consideration, among other things, the observed multiples for the selected transactions.

Goldman Sachs also calculated and compared the estimated transaction enterprise value for each of the selected transactions, as a multiple of the target’s estimated growth-adjusted next twelve months revenue from the announcement date of the transaction based on IBES consensus estimates and Wall Street Research (which we refer to as the “growth-adjusted NTM transaction revenue multiple”). Goldman Sachs then applied an illustrative range of growth-adjusted NTM transaction revenue multiples of 0.30x to 0.50x to the next twelve months revenue of Tableau reflected in the Forecasts, and calculated a range of implied equity values per share of Tableau common stock of $105 to $167, as rounded to the nearest dollar, which implied an illustrative range of exchange ratios of 0.651x to 1.038x per share of Tableau common stock based on the closing price per share of $161.27 of Salesforce common stock as of June 7, 2019. The illustrative range was selected by Goldman Sachs based on its professional judgment and experience, taking into consideration, among other things, the observed multiples for the selected transactions.

Public Comparables Analysis. Goldman Sachs reviewed and compared certain financial information for Tableau to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the software industry (collectively referred to as the “selected companies”):

 

          Growth-adjusted EV / CY20E
             Rev. Multiple            
 

Alteryx, Inc.

                 0.24x  

Atlassian Corp. Plc

        0.49x  

DocuSign, Inc.

        0.23x  

Dropbox, Inc.

        0.21x  

HubSpot, Inc.

        0.27x  

MongoDB, Inc.

        0.32x  

New Relic, Inc.

        0.23x  

Okta, Inc.

        0.45x  

Pegasystems Inc.

        NM  

Smartsheet Inc.

        0.25x  

Splunk Inc.

        0.17x  

Talend S.A.

        0.19x  

Workday, Inc.

        0.36x  

Zendesk, Inc.

        0.25x  

Although none of the selected companies is directly comparable to Tableau, the companies included were chosen by Goldman Sachs utilizing its professional judgment because they are companies with operations, results, market sizes and product profiles that, for the purposes of analysis, may be considered similar to that of Tableau.

 

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Goldman Sachs calculated and compared the enterprise value of each selected company as a multiple of its estimated growth-adjusted calendar year 2020 revenue (which we refer to as the “growth-adjusted EV / CY20 revenue multiple”) based on the Forecasts for Tableau and IBES estimates and Bloomberg data for Tableau, Salesforce and the selected companies. The results of this analysis are as follows:

 

          Growth-adjusted EV / CY20
            Rev.  Multiple            

Tableau

   Forecasts    0.31x
   IBES Estimates    0.33x

Median of Selected Companies

   IBES Estimates    0.25x

Present Value of Future Share Price AnalysisTableau Standalone. Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of Tableau common stock, which is designed to provide an indication of the present value of a theoretical future value of Tableau’s equity as a function of Tableau’s financial multiples. For this analysis, Goldman Sachs used the Forecasts for each of the calendar years 2019 to 2021. Goldman Sachs first calculated the implied future enterprise value of Tableau as of March 31, 2019 and as of December 31, 2019 and 2020, by applying a range of enterprise value to forward revenue multiples of 7.5x to 8.5x to the revenue estimates for Tableau contained in the Forecasts for each of the calendar years 2019 through 2021. These illustrative multiples were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account historical average enterprise value to revenue multiples for Tableau and the forward enterprise to revenue multiples for the selected companies. Goldman Sachs then added estimated net cash as of the relevant period ($1.06 billion as of March 31, 2019 and $1.10 billion and $1.16 billion as of year-end 2019 and 2020, respectively) per the Forecasts to such future enterprise values in order to calculate the implied future equity values. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Tableau (95.6 million shares, 95.9 million shares and 97.2 million shares as of March 31, 2019 and year-end 2019 and 2020, respectively), as provided by the management of Tableau. Goldman Sachs then discounted implied December 31, 2019 and 2020 per share equity values back to March 31, 2019 using an illustrative discount rate of 8.5%, reflecting an estimate of Tableau’s cost of equity. Goldman Sachs derived such illustrative discount rate by application of the CAPM, which requires certain company-specific inputs, including a beta for Tableau, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in an illustrative range of implied present values of $121 to $176 per share of Tableau common stock, as rounded to the nearest dollar.

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

Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the Tableau board of directors as to the fairness from a financial point of view of the transaction consideration to be paid to the holders of Tableau common stock (other than Salesforce and its affiliates) taken in the aggregate, pursuant to the merger agreement.

These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Tableau, Salesforce, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

 

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The transaction consideration was determined through arm’s-length negotiations between Tableau and Salesforce and was approved by the Tableau board of directors. Goldman Sachs provided advice to Tableau during these negotiations. Goldman Sachs did not, however, recommend any specific amount of transaction consideration to Tableau or the Tableau board of directors or that any specific amount of transaction consideration constituted the only appropriate transaction consideration for the contemplated transactions.

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

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or with which they co-invest or have other economic interests, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of Tableau, Salesforce, or any of their respective affiliates and third parties, or any currency or commodity that may be involved in the transactions contemplated by the merger agreement for the accounts of Goldman Sachs and its affiliates and employees and their customers. Goldman Sachs acted as financial advisor to Tableau in connection with, and participated in certain of the negotiations leading to, the transactions contemplated by the merger agreement. During the two year period ended June 9, 2019, the Investment Banking Division of Goldman Sachs has not been engaged by Tableau or its affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. During the two year period ended June 9, 2019, the Investment Banking Division of Goldman Sachs has not been engaged by Salesforce or its affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to Tableau, Salesforce and their respective affiliates for which the Investment Banking Division of Goldman Sachs may receive compensation.

The Tableau board of directors selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transactions contemplated by the merger agreement. Pursuant to a letter agreement dated February 25, 2019, Tableau engaged Goldman Sachs to act as its financial advisor in connection with the transactions contemplated by the merger agreement. The engagement letter between Tableau and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $82 million, all of which is contingent upon consummation of the transactions. In addition, Tableau has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Distribution of Offering Materials

This document, the related letter of transmittal and other relevant materials will be delivered to record holders of Tableau shares and to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on Tableau’s stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing, so that they can in turn send these materials to beneficial owners of Tableau shares.

Expiration of the Offer

The offer is scheduled to expire at midnight, Eastern Time, at the end of July 31, 2019, unless extended or terminated in accordance with the merger agreement. “Expiration date” means midnight, Eastern Time, at the end

 

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of July 31, 2019, unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term “expiration date” means the latest time and date at which the offer, as so extended by the Offeror, will expire.

Extension, Termination and Amendment of the Offer

Subject to the provisions of the merger agreement and the applicable rules and regulations of the SEC, and unless Tableau consents otherwise (which may be granted or withheld in its sole discretion) or the merger agreement is otherwise terminated:

 

   

the Offeror must extend the offer for any period required by any law, or any rule, regulation, interpretation or position of the SEC or its staff or the NYSE applicable to the offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or the offer documents or the registration statement on Form S-4, of which this document is a part;

 

   

in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived in accordance with the merger agreement as of any then-scheduled expiration of the offer, the Offeror must extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and

 

   

if, as of any then-scheduled expiration of the offer, each condition to the offer (other than the minimum tender condition, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived in accordance with the merger agreement and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau must, extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or that have been tendered but validly withdrawn, in the offer as of such time, and (y) as of such time the founders whose untendered shares are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares into the offer; or (ii) for more than 20 business days in the aggregate.

The Offeror may not terminate or withdraw the offer prior to the then-scheduled expiration of the offer unless the merger agreement is validly terminated in accordance with its terms, in which case the Offeror will terminate the offer promptly (but in no event more than one business day) after such termination. Among other circumstances, the merger agreement may be terminated by either Salesforce or Tableau if the offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Salesforce or the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer, or if the acceptance for exchange of Tableau shares tendered in the offer has not occurred on or before October 9, 2019 (subject to the two-month extension in certain circumstances described under “Merger Agreement—Termination of the Merger Agreement”), which we refer to as the “outside date.” See “Merger Agreement—Termination of the Merger Agreement.”

The Offeror expressly reserves the right to waive any offer condition or modify the terms of the offer, except that the Offeror may not make certain changes to the offer or waive certain conditions to the offer without the prior

 

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written consent of Tableau (which may be granted or withheld in its sole discretion). Changes to the offer that require the prior written consent of Tableau include changes (i) that change the form of consideration to be paid in the offer, (ii) that reduce the transaction consideration per Tableau share or decrease the consideration in the offer or the number of Tableau shares sought in the offer, (iii) that extend the offer (other than in a manner required or permitted by the merger agreement), (iv) that impose conditions to the offer not included in the merger agreement or (v) that amend or modify any term of or condition to the offer in any manner that has an adverse effect, or would be reasonably likely to have an adverse effect, on the holders of Tableau shares, that is not de minimis.

Conditions to the offer that the Offeror and Salesforce may not amend, modify or waive without the prior written consent of Tableau (which may be granted or withheld in its sole discretion) include (i) the minimum tender condition, (ii) the receipt of required regulatory approvals, (iii) lack of legal prohibitions, (iv) the effectiveness of the registration statement on Form S-4, of which this document is a part, (v) the approval for listing on the NYSE of the Salesforce shares to be issued in the offer and the merger and (vi) that the merger agreement shall not have been validly terminated in accordance with its terms.

The Offeror will effect any extension, termination, amendment or delay of the offer by giving oral or written notice to the exchange agent and by making a public announcement as promptly as practicable thereafter. In the case of an extension, any such announcement will be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material change in the information published, sent or given to stockholders in connection with the offer be promptly disseminated to stockholders in a manner reasonably designed to inform them of such change) and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror assumes no obligation to publish, advertise or otherwise communicate any such public announcement of this type other than by issuing a press release.

If the Offeror materially changes the terms of the offer or the information concerning the offer, or if the Offeror waives a material condition of the offer, in each case, subject to the terms and conditions of the merger agreement, the Offeror will extend the offer to the extent legally required under the Exchange Act.

For purposes of the offer, a “business day” means any day other than a Saturday, Sunday and any day which is a legal holiday under the laws of California or New York, or is a day on which banking institutions located in such states are authorized or required by applicable law or other governmental action to close.

No subsequent offering period will be available following the expiration of the offer without the prior written consent of Tableau, other than in accordance with the extension provisions set forth in the merger agreement.

Exchange of Shares; Delivery of Salesforce Shares

Salesforce has retained American Stock Transfer and Trust Company, LLC as the depositary and exchange agent for the offer and the merger (which we refer to as the “exchange agent”) to handle the exchange of Tableau shares for the transaction consideration in the offer and the merger.

Upon the terms and subject to the satisfaction or waiver of the conditions of the offer (including, if the offer is extended or amended in accordance with the merger agreement, the terms and conditions of any such extension or amendment), the Offeror will accept for exchange, and will exchange, Tableau shares validly tendered and not validly withdrawn in the offer, promptly after the expiration of the offer. In all cases, a Tableau stockholder will receive consideration for Tableau shares tendered in the offer only after timely receipt by the exchange agent of either a confirmation of a book-entry transfer of such shares (as described in “—Procedure for Tendering”) or a properly completed and duly executed letter of transmittal, in each case, together with any other required documents.

 

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For purposes of the offer, the Offeror will be deemed to have accepted for exchange Tableau shares validly tendered and not validly withdrawn if and when it notifies the exchange agent of its acceptance of those Tableau shares pursuant to the offer. The exchange agent will deliver to the applicable Tableau stockholders any Salesforce shares and cash in lieu of fractional shares issuable in exchange for Tableau shares validly tendered and accepted pursuant to the offer promptly after receipt of such notice. The exchange agent will act as the agent for tendering Tableau stockholders for the purpose of receiving Salesforce shares from the Offeror and transmitting such Salesforce shares and cash in lieu of fractional shares to the tendering Tableau stockholders. Tableau stockholders will not receive any interest on any cash that the Offeror pays in the offer in lieu of fractional shares, even if there is a delay in making the exchange.

If the Offeror does not accept any tendered Tableau shares for exchange pursuant to the terms and conditions of the offer for any reason, the Tableau shares to be returned will be credited to an account maintained with DTC or otherwise credited to the tendering stockholder as soon as practicable following expiration or termination of the offer.

Withdrawal Rights

Tableau stockholders can withdraw tendered Tableau shares at any time until the expiration of the offer and, if the Offeror has not agreed to accept the shares for exchange on or prior to September 1, 2019, Tableau stockholders can thereafter withdraw their shares from tender at any time after such date until the Offeror accepts shares for exchange. Any Tableau stockholder that validly withdraws previously validly tendered Tableau shares will receive shares of the same class of Tableau common stock that were tendered.

For the withdrawal of Tableau shares to be effective, the exchange agent must receive a written notice of withdrawal from the Tableau stockholder at one of the addresses set forth elsewhere in this document prior to the expiration of the offer. The notice must include the Tableau stockholder’s name, address, social security number (or tax identification number in the case of entities), the number of shares to be withdrawn and the name of the registered holder, if it is different from that of the person who tendered those shares, and any other information required pursuant to the offer or the procedures of DTC, if applicable.

A financial institution must guarantee all signatures on the notice of withdrawal, unless the shares to be withdrawn were tendered for the account of an eligible institution. Most banks, savings and loan associations and brokerage houses are able to provide signature guarantees. An “eligible institution” is a financial institution that is a participant in the Securities Transfer Agents Medallion Program.

If shares have been tendered pursuant to the procedures for book-entry transfer discussed under the section entitled “The Offer—Procedure for Tendering,” any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn shares and must otherwise comply with DTC’s procedures.

The Offeror will decide all questions as to the form and validity (including time of receipt) of any notice of withdrawal in its sole discretion, and its decision will be final and binding. None of the Offeror, Salesforce, Tableau, the exchange agent, the information agent or any other person is under any duty to give notification of any defects or irregularities in any tender or notice of withdrawal or will incur any liability for failure to give any such notification. Any shares validly withdrawn will be deemed not to have been validly tendered for purposes of the offer. However, a Tableau stockholder may re-tender withdrawn shares by following the applicable procedures discussed under the section “The Offer—Procedure for Tendering” at any time prior to the expiration of the offer.

Procedure for Tendering

All Tableau shares are held in electronic book entry form.

 

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To validly tender Tableau shares held of record, Tableau stockholders must deliver a properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents for tendered Tableau shares to the exchange agent for the offer, at its address set forth elsewhere in this document, all of which must be received by the exchange agent prior to the expiration of the offer.

If Tableau shares of Class A common stock are held in “street name” (i.e., through a broker, dealer, commercial bank, trust company or other nominee), those shares of Class A common stock may be tendered by the nominee holding such shares by book-entry transfer through DTC. To validly tender such shares held in street name, Tableau stockholders should instruct such nominee to do so prior to the expiration of the offer. No shares of Tableau Class B common stock are held in “street name.”

The exchange agent has established an account with respect to the Tableau shares at DTC in connection with the offer, and any financial institution that is a participant in DTC may make book-entry delivery of Tableau shares by causing DTC to transfer such shares prior to the expiration date into the exchange agent’s account in accordance with DTC’s procedure for such transfer. However, although delivery of Tableau shares may be effected through book-entry transfer at DTC, the letter of transmittal with any required signature guarantees, or an agent’s message, along with any other required documents, must, in any case, be received by the exchange agent at its address set forth elsewhere in this document prior to the expiration date. The term “agent’s message” means a message transmitted by DTC to, and received by, the exchange agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the DTC participant tendering the shares that are the subject of such book-entry confirmation, that such participant has received and agrees to be bound by the terms of the letter of transmittal and that the Offeror may enforce that agreement against such participant.

The Offeror is not providing for guaranteed delivery procedures and therefore Tableau stockholders who hold their shares through a DTC participant must allow sufficient time for the necessary tender procedures to be completed during normal business hours of DTC prior to the expiration date. Tenders received by the exchange agent after the expiration date will be disregarded and of no effect.

Signatures on all letters of transmittal must be guaranteed by an eligible institution, except in cases in which shares are tendered either by a registered holder of Tableau shares who has not completed the box entitled “Special Issuance Instructions” or the box entitled “Special Delivery Instructions” on the letter of transmittal or for the account of an eligible institution.

If the Tableau shares are registered in the name of a person other than the person who signs the letter of transmittal, or if payment is to be made or delivered to a person other than the registered holder(s), the tendering stockholder must provide appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the applicable book entry position, with the signature or signatures on the stock powers guaranteed by an eligible institution.

The method of delivery of all required documents, including delivery through DTC, is at the option and risk of the tendering Tableau stockholder, and delivery will be deemed made only when actually received by the exchange agent. If delivery is by mail, the Offeror recommends registered mail with return receipt requested and properly insured. In all cases, Tableau stockholders should allow sufficient time to ensure timely delivery.

To prevent U.S. federal backup withholding, each Tableau stockholder that is a U.S. person (as defined in the Code), other than a stockholder exempt from backup withholding as described elsewhere in this document, must provide the exchange agent with its correct taxpayer identification number and certify that it is not subject to U.S. federal backup withholding by timely completing the IRS Form W-9 included in the letter of transmittal. Certain stockholders (including, among others, certain foreign persons) are not subject to these backup withholding requirements. In order for a Tableau stockholder that is a foreign person to qualify as an exempt recipient for

 

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purposes of U.S. federal backup withholding, the stockholder must timely submit an applicable IRS Form W-8, signed under penalty of perjury, attesting to such person’s exempt status.

The acceptance for payment by the Offeror of Tableau shares pursuant to any of the procedures described above will constitute a binding agreement between the Offeror and the tendering Tableau stockholder upon the terms and subject to the conditions of the offer (including, if the offer is extended or amended in accordance with the merger agreement, the terms and conditions of any such extension or amendment).

No Guaranteed Delivery

The Offeror is not providing for guaranteed delivery procedures, and therefore Tableau stockholders must allow sufficient time for the necessary tender procedures to be completed prior to the expiration date. If Tableau stockholders hold shares through a DTC participant, such stockholders must allow sufficient time for the necessary tender procedures to be completed during normal business hours of DTC prior to the expiration date. Tableau stockholders must tender their Tableau shares in accordance with the procedures set forth in this document. In all cases, the Offeror will exchange Tableau shares tendered and accepted for exchange pursuant to the offer only after either a confirmation of a book-entry transfer of such shares (as described in “The Offer—Procedure for Tendering”) or a properly completed and duly executed letter of transmittal, in each case, together with any other required documents.

Grant of Proxy

By executing a letter of transmittal, subject to and effective upon acceptance for exchange of Tableau shares tendered thereby, a Tableau stockholder will irrevocably appoint the Offeror’s designees as such Tableau stockholder’s attorneys-in-fact and proxies, each with full power of substitution, to exercise to the full extent such stockholder’s rights with respect to its Tableau shares tendered and accepted for exchange by the Offeror and with respect to any and all other shares and other securities issued or issuable in respect of those Tableau shares. That appointment is effective, and voting rights will be effected, when and only to the extent that the Offeror accepts tendered Tableau shares for exchange pursuant to the offer and deposits with the exchange agent the transaction consideration for such Tableau shares. Furthermore, the letter of transmittal will not constitute a binding agreement between the signatory thereto and the Offeror until the Offeror accepts tendered Tableau shares for exchange pursuant to the offer and deposits with the exchange agent the transaction consideration for such Tableau shares.

All such proxies, when effective, will be considered coupled with an interest in the tendered Tableau shares and therefore will not be revocable. Upon the effectiveness of such appointment, all prior powers of attorney and proxies that the Tableau stockholder has given will be revoked, and such stockholder may not give any subsequent powers of attorney or proxies (and, if given, they will not be deemed effective). The Offeror’s designees will, with respect to the Tableau shares for which the appointment is effective, be empowered, among other things, to exercise all of such stockholder’s voting and other rights as they, in their sole discretion, deem proper at any annual, special or adjourned meeting of Tableau’s stockholders or otherwise.

The Offeror reserves the right to require that, in order for Tableau shares to be deemed validly tendered, immediately upon the Offeror’s acceptance of such shares for exchange, the Offeror must be able to exercise full voting rights with respect to such shares. However, prior to acceptance for exchange by the Offeror in accordance with terms of the offer, the appointment will not be effective, and the Offeror will have no voting rights as a result of the tender of Tableau shares. 

Tableau Class A Common Stock and Tableau Class B Common Stock

Under Tableau’s amended and restated certificate of incorporation (which we refer to as the “Tableau charter”), each share of Tableau Class A common stock entitles the holder to one vote while each share of Tableau Class B

 

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common stock generally entitles the holder to 10 votes. Each share of Tableau Class B common stock is convertible at any time at the option of the holder into one share of Tableau Class A common stock. In addition, each share of Tableau Class B common stock will convert automatically into one share of Tableau Class A common stock upon any transfer, whether or not for value, subject to certain exceptions set forth in the Tableau charter (none of such exceptions being applicable to the consummation of the offer). Accordingly, shares of Tableau Class B common stock that are validly tendered (and not validly withdrawn) in the offer will automatically convert, on a one-to-one basis, into Tableau Class A common stock upon the consummation of the offer

If the offer is successfully completed, holders of shares of Tableau Class A common stock and Tableau Class B common stock that validly tender (and do not validly withdraw) their shares into the offer will both receive the same transaction consideration. In the merger, each outstanding share of Tableau Class A common stock and Tableau Class B common stock (other than certain converted or cancelled shares, as described elsewhere in this document) that were not acquired by the Offeror in the offer will be converted into the right to receive the same transaction consideration.

Fees and Commissions

Tendering registered Tableau stockholders who tender Tableau shares directly to the exchange agent will not be obligated to pay any charges or expenses of the exchange agent or any brokerage commissions. Tendering Tableau stockholders who hold Tableau shares through a broker, dealer, commercial bank, trust company or other nominee should consult that institution as to whether or not such institution will charge the Tableau stockholder any service fees in connection with tendering Tableau shares pursuant to the offer.

Matters Concerning Validity and Eligibility

The Offeror will determine questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of Tableau shares, in its sole discretion, and its determination will be final and binding to the fullest extent permitted by law. The Offeror reserves the absolute right to reject any and all tenders of Tableau shares that it determines are not in the proper form or the acceptance of or exchange for which may be unlawful. The Offeror also reserves the absolute right to waive any defect or irregularity in the tender of any Tableau shares. No tender of Tableau shares will be deemed to have been validly made until all defects and irregularities in tenders of such shares have been cured or waived. None of the Offeror, Salesforce, Tableau or any of their affiliates or assigns, the exchange agent, the information agent or any other person will be under any duty to give notification of any defects or irregularities in the tender of any Tableau shares or will incur any liability for failure to give any such notification. The Offeror’s interpretation of the terms and conditions of the offer (including the letter of transmittal and instructions thereto) will be final and binding to the fullest extent permitted by law.

Tableau stockholders who have any questions about the procedure for tendering Tableau shares in the offer should contact the information agent at the address and telephone number set forth elsewhere in this document.

Announcement of Results of the Offer

Salesforce will announce the final results of the offer, including whether all of the conditions to the offer have been satisfied or waived and whether the Offeror will accept the tendered Tableau shares for exchange, as promptly as practicable following the expiration date. The announcement will be made by a press release in accordance with applicable securities laws and stock exchange requirements.

Purpose of the Offer and the Merger

The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer, as the first step in the acquisition of Tableau, is intended to facilitate the acquisition of

 

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Tableau. Accordingly, if the offer is completed and as a second step in such plan, pursuant to the terms and subject to the conditions of the merger agreement, Salesforce intends to promptly consummate a merger of the Offeror with and into Tableau, with Tableau surviving the merger. The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer. In the merger, each outstanding Tableau share that was not acquired by Salesforce or the Offeror in the offer (other than certain converted and cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. Upon consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former stockholders of Tableau will no longer have any direct ownership interest in the surviving corporation.

No Stockholder Approval

If the offer is consummated, Salesforce is not required to and will not seek the approval of Tableau’s remaining public stockholders before effecting the merger. Section 251(h) of the DGCL provides that following consummation of a successful tender offer for a public corporation, and subject to certain statutory provisions, if the acquiring corporation owns at least the amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger involving the target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender offer, the acquiring corporation can effect a merger without the action of the other stockholders of the target corporation. Accordingly, if the offer is completed, it will mean that the minimum tender condition has been satisfied, and if the minimum tender condition has been satisfied, it will mean that the merger will be subject to Section 251(h) of the DGCL. Accordingly, if the offer is completed, Salesforce intends to effect the closing of the merger without a vote of the Tableau stockholders in accordance with Section 251(h) of the DGCL.

No Appraisal Rights

Section 262 of the DGCL provides that stockholders have the right, in some circumstances, to dissent from certain corporate actions and to instead demand payment of the fair value of their shares. Stockholders do not have appraisal rights with respect to shares of any class or series of stock if such shares of stock, or depositary receipts in respect thereof, are either (a) listed on a national securities exchange or (b) held of record by more than 2,000 holders, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation (or depositary receipts in respect thereof), or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash in lieu of fractional shares or fractional depositary receipts described above or any combination of the foregoing.

Therefore, because shares of Tableau common stock are listed on NYSE, and the transaction consideration consists of only shares of Salesforce common stock, which are listed on NYSE, and cash in lieu of fractional shares, holders of Tableau common stock are not entitled to appraisal rights in the offer or the merger with respect to their shares of Tableau common stock. In addition, because the merger is of Tableau with and into a subsidiary of Salesforce and holders of Salesforce common stock will continue to hold their shares following completion of the merger, holders of Salesforce common stock are not entitled to appraisal rights in connection with the offer or the merger with respect to their shares of Salesforce common stock.

Non-Applicability of Rules Regarding “Going Private” Transactions

The SEC has adopted Rule 13e-3 under the Exchange Act, which is applicable to certain “going private” transactions, and which may under certain circumstances be applicable to the merger or another business combination following the acceptance of shares pursuant to the offer in which the Offeror seeks to acquire the remaining shares not held by it. The Offeror believes that Rule 13e-3 will not be applicable to the merger because it is anticipated that the merger will be effected within one year following the consummation of the offer and, in the merger, stockholders will receive the same consideration as that paid in the offer.

 

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Plans for Tableau

In connection with the offer, Salesforce has reviewed and will continue to review various possible business strategies that it might consider in the event that the Offeror acquires control of Tableau, whether pursuant to the offer, the merger or otherwise. Following a review of additional information regarding Tableau, these changes could include, among other things, changes in Tableau’s business, operations, personnel, employee benefit plans, corporate structure, capitalization and management. See also “The Offer—Salesforce’s Reasons for the Offer and the Merger.”

Delisting and Termination of Registration

Following consummation of the transactions, shares of Tableau Class A common stock will no longer be eligible for inclusion on the NYSE and will be withdrawn from listing. Assuming that Tableau qualifies for termination of registration under Exchange Act after the transactions are consummated, Salesforce also intends to seek to terminate the registration of shares of Tableau Class A common stock under the Exchange Act. See “The Offer—Effect of the Offer on the Market for Tableau Shares; NYSE Listing; Registration Under the Exchange Act; Margin Regulations.”

Board of Directors and Management; Organizational Documents

Upon consummation of the merger, the directors of the Offeror immediately prior to the consummation of the merger will be the directors of the surviving corporation in the merger, and the officers of the Offeror immediately prior to the consummation of the merger will be the officers of the surviving corporation in the merger. Upon consummation of the merger, the certificate of incorporation and bylaws of the Offeror as in effect immediately prior to the effective time of the merger will be the certificate of incorporation and bylaws of the surviving corporation in the merger, provided that the name of the surviving corporation will be Tableau Software, Inc. After Salesforce’s review of Tableau and its corporate structure, management and personnel, Salesforce will determine what changes, if any, are desirable.

Ownership of Salesforce Shares after the Offer and the Merger

Salesforce estimates that former Tableau stockholders would own, in the aggregate, approximately 11.0% of the outstanding Salesforce shares immediately following consummation of the offer and the merger, assuming that:

 

   

Salesforce acquires through the offer and the merger 100% of the outstanding Tableau shares;

 

   

in the offer and the merger, Salesforce issues 96,372,111 Salesforce shares as part of the transaction consideration (disregarding for this purpose stock options, restricted stock units and other rights to acquire shares that may be issued by Salesforce or Tableau pursuant to any employee stock plan); and

 

   

immediately following completion of the transactions, there are 875,249,785 Salesforce shares outstanding (calculated by adding 778,877,674, the number of Salesforce shares outstanding as of June 24, 2019 (excluding treasury shares), plus 96,372,111, the number of Salesforce shares estimated to be issued as part of the transaction consideration).

Each Salesforce share has one vote.

Effect of the Offer on the Market for Tableau Shares; NYSE Listing; Registration under the Exchange Act; Margin Regulations

Effect of the Offer on the Market for Tableau Shares

The purchase of shares of Tableau Class A common stock by the Offeror pursuant to the offer will reduce the number of holders of shares of Tableau Class A common stock and the number of shares of Tableau Class A

 

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common stock that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining shares of Tableau Class A common stock held by the public. The extent of the public market for shares of Tableau Class A common stock after consummation of the offer and the availability of quotations for such shares will depend upon a number of factors, including the number of stockholders holding shares of Tableau Class A common stock, the aggregate market value of the shares of Tableau Class A common stock held by the public at such time, the interest of maintaining a market in the shares of Tableau Class A common stock, analyst coverage of Tableau on the part of any securities firms and other factors. However, under the merger agreement, the closing of the merger must occur promptly, and in any case no later than the first business day, after the acceptance of tendered Tableau shares in the offer and the satisfaction of the other condition to the merger, unless the parties agree otherwise in writing (see “Merger Agreement—Conditions to the Merger”). If the merger is completed, shares of Tableau Class A common stock will no longer qualify for inclusion on the NYSE and will be withdrawn from listing.

There is no public trading market for the Tableau Class B common stock.

NYSE Listing

Shares of Tableau Class A common stock are currently listed on the NYSE. However, the rules of the NYSE establish certain criteria that, if not met, could lead to the discontinuance of listing of shares of Tableau Class A common stock from the NYSE. Among such criteria are the number of stockholders, the number of shares publicly held and the aggregate market value of the shares publicly held. If, as a result of the purchase of shares of Tableau Class A common stock pursuant to the offer or otherwise, shares of Tableau Class A common stock no longer meet the requirements of the NYSE for continued listing and the shares of Tableau Class A common stock are delisted, the market for such shares would be adversely affected.

Following the consummation of the offer, if the merger is for some reason not consummated, it is possible that shares of Tableau Class A common stock could be traded on other securities exchanges (with trades published by such exchanges), the OTC Bulletin Board or in a local or regional over-the-counter market. The extent of the public market for such shares would, however, depend upon the number of Tableau stockholders and the aggregate market value of shares of Tableau Class A common stock remaining at such time, the interest in maintaining a market in such shares on the part of securities firms, the possible termination of registration of shares of Tableau Class A common stock under the Exchange Act and other factors. If the merger is completed, shares of Tableau Class A common stock will no longer qualify for inclusion on the NYSE and will be withdrawn from listing.

Margin Regulations

The shares of Tableau Class A common stock are currently “margin securities” under the Regulations of the Board of Governors of the Federal Reserve System (which we refer to as the “Federal Reserve Board”), which designation has the effect, among other effects, of allowing brokers to extend credit on the collateral of such shares of Tableau Class A common stock. Depending upon factors similar to those described above regarding the market for shares of Tableau Class A common stock and stock quotations, it is possible that, following the offer, shares of Tableau Class A common stock would no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers. If the merger is completed, shares of Tableau Class A common stock will no longer constitute “margin securities.”

Registration under the Exchange Act

Shares of Tableau Class A common stock are currently registered under the Exchange Act. Such registration may be terminated upon application by Tableau to the SEC if shares of Tableau Class A common stock are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of

 

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shares of Tableau Class A common stock under the Exchange Act would substantially reduce the information required to be furnished by Tableau to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to Tableau, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with meetings of stockholders and the related requirement of furnishing an annual report to stockholders, and the requirements of Rule 13e-3 under the Exchange Act with respect to “going private” transactions. Furthermore, the ability of “affiliates” of Tableau and persons holding “restricted securities” of Tableau to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act may be impaired. If registration of shares of Tableau Class A common stock under the Exchange Act were terminated, such shares would no longer be “margin securities” or be eligible for quotation on the NYSE. After consummation of the offer, Salesforce and the Offeror currently intend to cause Tableau to terminate the registration of shares of Tableau Class A common stock under the Exchange Act as soon as the requirements for termination of registration are met.

Conditions of the Offer

Notwithstanding any other provisions of the offer and in addition to Salesforce’s and the Offeror’s rights to extend, amend or terminate the offer in accordance with the terms and conditions of the merger agreement and applicable law, and in addition to the obligations of the Offeror to extend the offer pursuant to the terms and conditions of the merger agreement and applicable law, the Offeror and Salesforce are not required to accept for exchange or, subject to any applicable rules and regulations of the SEC (including Rule 14e-1(c) under the Exchange Act), exchange the transaction consideration for any Tableau shares validly tendered in the offer and not validly withdrawn prior to the expiration of the offer, if at the expiration of the offer any of the following conditions have not been satisfied or waived in accordance with the merger agreement:

 

   

Minimum Tender Condition—Tableau stockholders having validly tendered and not validly withdrawn in accordance with the terms of the offer and prior to the expiration of the offer a number of shares of Tableau common stock that upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together with any shares of Tableau common stock then owned by Salesforce and the Offeror, would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer (which we refer to as the “minimum tender condition”);

 

   

Regulatory Approvals—Any applicable waiting period under the HSR Act having expired or been terminated, and any required pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany having been obtained;

 

   

Effectiveness of Form S-4—The registration statement on Form S-4, of which this document is a part, having become effective under the Securities Act, and not being the subject of any stop order or proceeding seeking a stop order;

 

   

No Legal Prohibition— No governmental entity of competent jurisdiction having (i) enacted, issued or promulgated any law on or after June 9, 2019 (and there not having been any change on or after June 9, 2019 in the manner in which any governmental entity enforces or interprets any law enacted, issued or promulgated prior to June 9, 2019) that is in effect as of immediately prior to the expiration of the offer or (ii) issued or granted any order or injunctions (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the expiration of the offer, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the offer or the merger;

 

   

Listing of Salesforce Shares—The Salesforce shares to be issued in the offer and the merger having been approved for listing on the NYSE, subject to official notice of issuance;

 

   

No Tableau Material Adverse Effect—There not having occurred any change, effect, development, circumstance, condition, state of facts, event or occurrence since the date of the merger agreement that,

 

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individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations of Tableau and its subsidiaries, taken as a whole (with such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”), and that is continuing as of immediately prior to the expiration of the offer;

 

   

Accuracy of Tableau’s Representations and Warranties—The representations and warranties of Tableau in the merger agreement (without giving effect to any qualification as to materiality or material adverse effect) being true and correct as of June 9, 2019 and as of the expiration of the offer as though made on and as of the expiration of the offer (except for representations and warranties that by their terms speak specifically as of another date, in which case as of such date), except where the failure of such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or material adverse effect) have not had and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Tableau (with such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”), except that (1) certain of Tableau’s representations and warranties related to its qualification, organization and subsidiaries, its authority to enter into the merger agreement, the opinion of Tableau’s financial advisor, anti-takeover laws and finders and brokers fees must be true and correct in all material respects, if not qualified by materiality or material adverse effect, and in all respects, if qualified by materiality or material adverse effect; (2) certain of Tableau’s representations and warranties related to its capitalization and voting agreements must be true and correct in all respects, except for any de minimis inaccuracies; and (3) Tableau’s representation and warranty that no material adverse effect on Tableau (with such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”) has occurred from December 31, 2018 through June 9, 2019 (the date of the merger agreement) must be true and correct in all respects;

 

   

Tableau’s Compliance with Covenants—Tableau having performed or complied in all material respects with the covenants and agreements required to be performed or complied with by it under the merger agreement at or prior to the expiration of the offer;

 

   

Receipt of Tableau Officer’s Certificate—Salesforce and the Offeror having received from Tableau a certificate, dated the date of the expiration of the offer and signed by its chief executive officer or chief financial officer, certifying to the effect that the conditions set forth in the three bullet points immediately above have been satisfied; or

 

   

No Termination of the Merger Agreement—The merger agreement not having been validly terminated in accordance with its terms.

Except as expressly set forth in the merger agreement, the foregoing conditions to the offer are for the sole benefit of Salesforce and the Offeror and may be asserted by Salesforce or the Offeror regardless of the circumstances giving rise to any such conditions, and may be waived by Salesforce or the Offeror in whole or in part at any time and from time to time in their sole and absolute discretion. However, certain specified conditions may only be waived by Salesforce or the Offeror with the prior written consent of Tableau (which may be granted or withheld in its sole discretion). These conditions are the minimum tender condition, the receipt of required regulatory approvals, lack of legal prohibitions, the Salesforce shares to be issued in the offer and the merger having been approved for listing on the NYSE, subject to official notice of issuance, the registration statement on Form S-4, of which this document is a part, having become effective and the merger agreement not having been validly terminated in accordance with its terms. There is no financing condition to the offer.

Regulatory Approvals

General

Salesforce is not aware of any governmental license or regulatory permit that appears to be material to Tableau’s business that might be adversely affected by the acquisition of Tableau shares pursuant to the offer or the merger

 

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or, except as described below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Tableau shares pursuant to the offer or the merger. Should any of these approvals or other actions be required, Salesforce and the Offeror currently contemplate that these approvals or other actions will be sought. There can be no assurance that (a) any of these approvals or other actions, if needed, will be obtained (with or without substantial conditions), (b) if these approvals were not obtained or these other actions were not taken, adverse consequences would not result to Tableau’s business or (c) certain parts of Tableau’s or any of its subsidiaries’ businesses would not have to be disposed of or held separate. The Offeror’s obligation under the offer to accept for exchange and pay for shares is subject to certain conditions. See “The Offer—Conditions of the Offer.”

Subject to the terms and conditions of the merger agreement, Salesforce and Tableau have agreed to use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the offer and the merger as soon as practicable after the date of the merger agreement. Notwithstanding the foregoing, none of Salesforce, the Offeror or any of their respective subsidiaries is required to, and Tableau may not and may not permit any of its subsidiaries to, without the prior written consent of Salesforce, become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (a) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of Tableau, Salesforce or their respective subsidiaries, (b) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of Tableau, Salesforce or their respective subsidiaries or (c) impose any restriction, requirement or limitation on the operation of the business or portion of the business of Tableau, Salesforce or their respective subsidiaries. However, if requested by Salesforce, Tableau or its subsidiaries will become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on Tableau or its subsidiaries in the event the merger is completed.

HSR Act

Under the HSR Act and the rules and regulations promulgated thereunder, the offer may not be completed until Salesforce and Tableau each files a Notification and Report Form with the Federal Trade Commission (which we refer to as “FTC”) and the Antitrust Division of the U.S. Department of Justice (which we refer to as “DOJ”), and the applicable waiting period has expired or been terminated. A transaction notifiable under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filings of their respective HSR Act notification and report forms or the early termination of that waiting period.

Salesforce and Tableau each filed a Notification and Report Form with respect to the transaction with the DOJ and the FTC on June 14, 2019. At 11:59 p.m., New York City time, on July 15, 2019, the waiting period applicable to the transaction under the HSR Act expired.

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

 

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There can be no assurance that a challenge to the transactions on antitrust grounds will not be made, or if such a challenge is made, what the result will be. See “The Offer—Conditions of the Offer” for certain conditions to the offer, including conditions with respect to the HSR Act.

German Antitrust Approval

The merger is also subject to clearance or approval under the antitrust laws in Germany. The German Act Against Restraints of Competition of 1958, as amended (which we refer to as the “German ARC”) imposes a pre-merger notification requirement on transactions that qualify as concentrations within the meaning of the law and meet certain specified turnover thresholds, which the present merger meets. Accordingly, consummation of the merger is conditional upon clearance or approval being received from the Bundeskartellamt (Federal Cartel Office, which we refer to as the “FCO”). Clearance is considered granted if, after a transaction has been notified, the applicable one-month waiting period expires without the decision by the FCO to open in-depth Phase II proceedings or if the FCO explicitly clears the transaction before the expiration of the waiting period.

Salesforce notified the FCO of the proposed transaction on June 21, 2019. On July 17, 2019, the FCO granted clearance to the proposed transaction.

The FCO could take such actions under the applicable antitrust laws as they deem necessary or desirable, including seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. There is no assurance that Salesforce and Tableau will obtain the required antitrust clearance or approval on a timely basis, if at all.

Litigation Relating to the Offer and the Merger

Three civil actions were filed challenging the adequacy of certain disclosures disseminated in connection with the proposed transaction. On July 10, 2019, Shiva Stein, a purported stockholder of Tableau, commenced an action in the United States District Court for the District of Delaware, captioned Stein v. Tableau Software, Inc. et al., Case No. 1:19-cv-01289, against Tableau and each of the current members of the Tableau Board. The Stein complaint asserts claims under Sections 14(d), 14(e), and 20(a) of the Exchange Act challenging the adequacy of certain public disclosures made in the Schedule 14D-9 concerning the proposed transaction. The plaintiff seeks, among other things, an injunction preventing consummation of the proposed transaction, rescission of the proposed transaction or rescissory damages in the event it is consummated, an accounting by defendants for all damages caused to the plaintiff, and the award of attorneys’ fees and expenses. On July 10, 2019, Marcy Curtis, a purported stockholder of Tableau, commenced a putative class action in the United States District Court for the District of Delaware, captioned Curtis v. Tableau Software, Inc. et al., Case No. 1:19-cv-01290, against Tableau, each of the current members of the Tableau Board, Salesforce, and Offeror. The Curtis complaint asserts claims under Sections 14(d), 14(e), and 20(a) of the Exchange Act challenging the adequacy of certain public disclosures made in the Schedule 14D-9 concerning the proposed transaction. The plaintiff seeks, among other things, an injunction preventing consummation of the proposed transaction, rescission of the proposed transaction or rescissory damages in the event it is consummated, declaratory relief, and the award of attorneys’ fees and expenses. On July 11, 2019, Cathy O’Brien, a purported stockholder of Tableau, commenced an action in the United States District Court for the Southern District of New York, captioned O’Brien v. Tableau Software, Inc., et al., Case No. 1:19-cv-06447, against Tableau and each of the current members of the Tableau Board. The O’Brien complaint asserts claims under Sections 14(d), 14(e), and 20(a) of the Exchange Act challenging the adequacy of certain public disclosures made in the Schedule 14D-9 concerning the proposed transaction. The plaintiff seeks, among other things, an injunction preventing consummation of the proposed transaction, rescission of the proposed transaction or rescissory damages in the event it is consummated, an accounting by defendants for all damages caused to the plaintiff, and the award of attorneys’ fees and expenses. The defendants believe the claims asserted in these civil actions are without merit.

 

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Interests of Certain Persons in the Offer and the Merger

Effect of the Offer and the Merger on Tableau Common Stock and Equity Awards

Consideration for Tableau Common Stock in the Merger

The following table sets forth the number of shares of Tableau common stock beneficially owned as of June 24, 2019 by each of Tableau’s executive officers and directors, excluding shares issuable upon exercise of stock options or vesting of restricted stock units or performance share units, and the aggregate transaction consideration payable for such shares. Each holder of shares of Tableau common stock who otherwise would be entitled to receive a fraction of a share of Salesforce common stock under the merger agreement will receive cash, without interest, in an amount equal to such fractional part of a share of Salesforce common stock multiplied by the volume weighted average closing sale price of one (1) share of Salesforce common stock as reported on the NYSE for the ten consecutive trading days ending on the trading day immediately prior to the acceptance time (which we refer to as the “Salesforce trading price”), rounded to the nearest whole cent. The amounts in this table assume that the transaction consideration is $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019 (the trading day preceding June 10, 2019, the date on which the execution of the merger agreement was first publicly announced). This information is based on the number of shares of Tableau common stock held by Tableau’s directors and executive officers as of June 24, 2019. The amounts set forth in the table below are as calculated before any taxes that may be due on such amounts are paid.

 

Name

   Number of Shares of
Tableau Common Stock
Beneficially Owned
     Number of Shares of
Salesforce Common
Stock for Shares
     Total Value of Shares(1)  

Adam Selipsky

     8,725        9,623      $ 1,551,901  

Christian Chabot

     2,349,598        2,591,606      $ 417,948,300  

Patrick Hanrahan

     6,863,170        7,570,076      $ 1,220,826,157  

Christopher Stolte

     1,141,661        1,259,252      $ 203,079,570  

William Bosworth

     9,153        10,095      $ 1,628,021  

Elliott Jurgensen, Jr.

     2,722        3,002      $ 484,133  

Hilarie Koplow-McAdams

     5,549        6,120      $ 986,972  

Gerri Martin-Flickinger

     1,452        1,601      $ 258,193  

John McAdam

     16,835        18,569      $ 2,994,623  

Brooke Seawell

     31,297        34,520      $ 5,567,040  

Damon Fletcher

     2,861        3,155      $ 508,807  

Keenan Conder

     45,069        49,711      $ 8,016,893  

Dan Miller

     10,255        11,311      $ 1,824,125  

Mark Nelson

     12,113        13,360      $ 2,154,567  

 

(1)

Does not include cash for fractional shares of Salesforce common stock.

Consideration for Tableau Options in the Merger—Generally

At the effective time, each Tableau option that is outstanding and unexercised immediately prior to the effective time (whether vested or unvested) held by any former employee of Tableau will be cancelled and converted into the right to receive the transaction consideration in respect of each “net share” covered by such Tableau option, where “net share” means the quotient obtained by dividing (a) the product of (1) the excess, if any, of the “per share cash equivalent consideration” (defined below) over the per share exercise price applicable to the Tableau option, multiplied by (2) the number of shares subject to the Tableau option immediately prior to the effective time, by (b) the per share cash equivalent consideration, less applicable tax withholdings. As used in the offer to exchange, the “per share cash equivalent consideration” means the product (rounded to the nearest cent) obtained by multiplying (i) the exchange ratio by (ii) the Salesforce trading price. 

 

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At the effective time, each Tableau option not held by a former employee of Tableau at the effective time will be assumed and automatically converted into an option to purchase the number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau option immediately prior to the effective time by the exchange ratio. Each adjusted option will have an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per share exercise price of the Tableau option by the exchange ratio and will otherwise be subject to the same terms and conditions as were applicable to such Tableau option prior to the effective time.

Consideration for Tableau Restricted Stock Units and Performance Share Units in the Merger—Generally

At the effective time, each Tableau RSU award that is outstanding immediately prior to the effective time held by a non-employee director of Tableau will vest as of the effective time and will be cancelled and converted into the right to receive the transaction consideration in respect of each share of Tableau common stock subject to such Tableau RSU award.

At the effective time, each Tableau RSU award held by an individual who is not a non-employee director of Tableau at the effective time will be assumed and automatically converted into a restricted stock unit, on the same terms and conditions as were applicable to such Tableau RSU award prior to the effective time, with respect to a number of shares of Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau RSU award by the exchange ratio. Each converted Tableau RSU award will be subject to the same terms and conditions as were applicable to such Tableau RSU award prior to the effective time, except that it will vest after the effective time solely based on continued service to Salesforce and its affiliates.

At the effective time, each Tableau PSU award that is outstanding immediately prior to the effective time will be assumed and automatically converted into a restricted stock unit with respect to a number of shares of Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau PSU award by the exchange ratio; provided that the number of shares of Tableau common stock subject to a Tableau PSU award equals the number of shares that would have vested based on the achievement of performance at target levels. Each converted Tableau PSU award will be subject to the same terms and conditions as were applicable to such Tableau PSU award prior to the effective time, except that it will vest after the effective time solely based on continued service to Salesforce and its affiliates.

Treatment of Director Equity Awards

As of June 24, 2019, Tableau’s non-employee directors held Tableau options to purchase 289,812 shares of Tableau common stock, with exercise prices ranging from $7.17 to $7.47, all of which are vested. As of the same date, Tableau’s non-employee directors held Tableau RSU awards covering 18,686 shares and did not hold any Tableau PSU awards.

At the effective time, all Tableau options held by a non-employee director of Tableau will be assumed and automatically converted into options covering shares of Salesforce common stock, as discussed above. At the effective time, each Tableau RSU award that is outstanding and held by a non-employee director of Tableau will vest and be cancelled and automatically converted into the right to receive the transaction consideration, as discussed above.

Please see “—Table of Estimated Consideration for Equity Awards” below for additional information.

Treatment of Executive Officer Equity Awards

As of June 24, 2019, Tableau’s executive officers held Tableau options to purchase 75,000 shares of Tableau common stock, with an exercise price of $54.87, of which options to purchase 51,562 shares of Tableau common

 

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stock are vested. As of the same date, Tableau’s executive officers held Tableau RSU awards covering 438,494 shares and held Tableau PSU awards covering 36,548 shares (assuming performance goals are achieved at target levels).

Assuming continued employment through the effective time, all Tableau options, Tableau RSU awards and Tableau PSU awards held by Tableau’s executive officers will be assumed and converted into awards covering shares of Salesforce common stock, as discussed above.

As discussed in more detail below, pursuant to the terms of the change in control agreements entered into with each of Tableau’s executive officers (each, a “change in control agreement”), if, within twelve months following the date of a change of control of Tableau, such as the completion of the offer, the executive officer’s employment is terminated by Tableau without cause (as such term is defined in the applicable change in control agreement) or the executive officer resigns for good reason (as such term is defined in the applicable change in control agreement), and provided the executive officer executes a general release in a form provided by Tableau at the time of his or her termination of employment, then vesting with respect to 100% of the then unvested shares subject to the executive officer’s adjusted options or converted Tableau RSU awards and converted Tableau PSU awards will accelerate.

Please see “—Table of Estimated Consideration for Equity Awards” below for additional information.

Table of Estimated Consideration for Equity Awards

Directors

The table below sets forth, for each of Tableau’s non-employee directors, the aggregate number of Tableau options and Tableau RSU awards that are held by Tableau’s non-employee directors as of June 24, 2019.

 

Name

   Vested
Tableau
Options
(#)(1)
     Unvested
Tableau
Options
(#)(2)
     Value of
Tableau
Options ($)(3)
     Tableau
RSU Awards
(#)(4)
     Value of
Tableau
RSU Awards
($)(5)
     Total ($)(6)  

Christian Chabot

     —          —          —          —          —          —    

Patrick Hanrahan

     —          —          —          —          —          —    

Christopher Stolte

     259,812        —          44,352,507        —          —          44,352,507  

William Bosworth

     1,000        —          170,690        2,051        364,832        535,522  

Elliott Jurgensen, Jr.

     29,000        —          4,941,890        2,051        364,832        5,306,722  

Hilarie Koplow-McAdams

     —          —          —          5,236        931,380        931,380  

Gerri Martin-Flickinger

     —          —          —          5,246        933,158        933,158  

John McAdam

     —          —          —          2,051        364,832        364,832  

Brooke Seawell

     —          —          —          2,051        364,832        364,832  

 

(1)

Represents the number of Tableau options that are outstanding and vested in accordance with their terms as of June 24, 2019, assuming that such date occurs prior to the effective time.

(2)

Represents the number of Tableau options that are outstanding and unvested in accordance with their terms as of June 24, 2019, assuming that such date occurs prior to the effective time.

(3)

Equals (i) the number of shares of Tableau common stock subject to outstanding Tableau options as of June 24, 2019 (that is, the sum of the number of shares shown in the “Vested Tableau Options” and the “Unvested Tableau Options” columns), multiplied by (ii) (a) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019, reduced by (b) the exercise price of the Tableau option.

(4)

Represents the number of Tableau RSU awards that will vest immediately prior to the effective time in accordance with the terms of the merger agreement, assuming the effective time occurs on June 24, 2019.

 

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(5)

Equals (i) the number of Tableau RSU awards, multiplied by (ii) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019.

(6)

Equals the sum of the amounts shown in the “Value of Tableau Options” and the “Value of Tableau RSU Awards” columns.

Executive Officers

The table below sets forth, for each of Tableau’s executive officers, the aggregate number of vested Tableau options that are held by Tableau’s executive officers as of June 24, 2019, and the aggregate number of unvested Tableau options and unvested Tableau RSU awards held by Tableau’s executive officers as of June 24, 2019 that would accelerate upon a qualifying termination.

 

Name

   Vested
Tableau
Options
(#)(1)
     Value of
Vested
Tableau
Options
($)(2)
     Accelerated
Unvested
Tableau
Options
Upon a
Qualifying
Termination
(#)(3)
     Value of
Accelerated
Unvested
Tableau
Options
Upon a
Qualifying
Termination
($)(4)
     Accelerated
Tableau
RSU
Awards
Upon a
Qualifying
Termination
(#)(5)
     Value of
Accelerated
Tableau
RSU Awards
Upon a
Qualifying
Termination
($)(6)
     Total
($)(7)
 

Adam Selipsky

     51,562        6,342,642        23,438        2,883,108        231,592        41,195,585        50,421,335  

Damon Fletcher

     —          —          —          —          50,355        8,957,147        8,957,147  

Dan Miller

     —          —          —          —          87,115        15,496,016        15,496,016  

Mark Nelson

     —          —          —          —          66,727        11,869,399        11,869,399  

Keenan Conder

     —          —          —          —          39,253        6,982,324        6,982,324  

 

(1)

Represents the number of Tableau options that are outstanding and vested in accordance with their terms as of June 24, 2019, assuming such date occurs prior to the effective time.

(2)

Equals (i) the number of shares of Tableau common stock shown in the “Vested Tableau Options” column, multiplied by (ii) (a) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019, reduced by (b) the exercise price of the Tableau option.

(3)

Represents the number of Tableau options that would vest upon a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019. For each executive officer, this number represents 100% of the unvested shares subject to his Tableau options.

(4)

Equals (i) the number of shares of Tableau common stock shown in the “Accelerated Unvested Tableau Options Upon a Qualifying Termination” column, multiplied by (ii) (a) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019, reduced by (b) the exercise price of the Tableau option. Assumes that each executive officer experiences a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019.

(5)

Represents the number of Tableau RSU awards (including Tableau PSU awards) that would vest upon a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019. For each executive officer, this number represents 100% of the unvested shares subject to the awards and assumes any applicable performance metrics are achieved at target.

(6)

Equals (i) the number of Tableau RSU awards shown in the “Accelerated Tableau RSU Awards Upon a Qualifying Termination” column, multiplied by (ii) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019. Assumes that each executive officer experiences a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019.

(7)

Equals the sum of amounts shown in the “Value of Vested Tableau Options,” “Value of Accelerated Unvested Tableau Options Upon a Qualifying Termination” and the “Value of Accelerated Tableau RSU Awards Upon a Qualifying Termination” columns.

 

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Tableau Shares Held by Tableau Officers and Directors

As of June 24, 2019, the directors and executive officers of Tableau and their affiliates beneficially owned approximately 10,500,460 Tableau shares, representing approximately 12.0% of the Tableau shares outstanding as of June 24, 2019.

Concurrently with the execution of the merger agreement, on June 24, 2019, Tableau board members Christian Chabot, Christopher Stolte and Patrick Hanrahan entered into a letter agreement with Salesforce and the Offeror, solely in their capacities as stockholders of Tableau, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock, which in the aggregate represent approximately 11.8% of the outstanding shares of Tableau common stock, prior to the expiration of the offer. The co-founders have also conveyed to both Salesforce and Tableau that they intend to tender into the offer. For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and such letter agreement, which is filed as Exhibit 10.25 to this document.

Founder Offer Letters and Arrangements

The founders do not receive compensation for their service as directors and instead are compensated for their services to Tableau as employees. Per the terms of their respective offer letters with Tableau, the founders are each entitled to receive certain severance benefits as described herein. For each founder, if, within twelve months following the date of a change of control of Tableau, such as the completion of the offer, the founder’s employment is terminated by Tableau without cause or, solely with respect to Messrs. Chabot and Stolte, such founder resigns for good reason, and provided that such founder executes a general release in a form provided by Tableau at the time of his termination of employment, then such founder will be entitled to: (i) a lump sum payment equal to twelve months’ of base salary for Messrs. Chabot and Stolte and six months’ of base salary for Mr. Hanrahan and (ii) reimbursement of COBRA premiums for a period of up to twelve months for Messrs. Chabot and Stolte and up to six months for Mr. Hanrahan. Each of Mr. Stolte and Mr. Chabot would also be entitled to vest in any then-unvested Tableau equity awards. The estimated amount of these payments is $130,000 for each of Messrs. Stolte and Chabot and $50,000 for Mr. Hanrahan. As of June 24, 2019, neither of Messrs. Stolte and Chabot hold any unvested Tableau equity awards.

Offer Letters

Each of Tableau’s executive officers is an at-will employee. Offer letters with Tableau’s executive officers set forth the executive officer’s salary, short-term and long-term incentive compensation opportunities, signing bonus and benefit plan participation. Each of Tableau’s executive officers has also executed Tableau’s standard form of confidential information and invention assignment agreement.

Change in Control Agreements

In order to ensure retention of key personnel and continuity of the business in the event of a change in control, Tableau has also previously entered into change in control agreements with key personnel, including each of Tableau’s named executive officers, the terms of which were approved by Tableau’s Compensation Committee.

The change in control agreements provide for the following benefits upon a “Covered Termination” (as described below):

 

   

a lump sum payment equal to twelve months of such executive’s then-current base salary;

 

   

reimbursement of COBRA premiums for a period of up to twelve months; and

 

   

100% acceleration of vesting of all then-unvested equity awards held by such executive.

 

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For purposes of the change in control agreements:

 

   

“Covered Termination” means dismissal or discharge for reasons other than Cause (and other than as a result of death or disability), or termination of employment for Good Reason, either of which occurs within twelve months following the effective date of a change in control.

 

   

“Cause” means the executive’s (i) willful failure to substantially perform his or her duties to Tableau or deliberate and material violation of a Company policy; (ii) commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to Tableau; (iii) unauthorized use or disclosure by executive of any proprietary information or trade secrets of Tableau or any other party to whom the named executive officer owes an obligation of nondisclosure as a result of his or her relationship with Tableau; or (iv) willful breach of any obligations under any written agreement or covenant with Tableau, in each case in the reasonable determination of the Tableau board of directors.

 

   

“Good Reason” means the occurrence of one or more of the following, without an executive’s express written consent (i) a material reduction in executive’s responsibilities, provided that neither a mere change in title alone nor reassignment following a change in control to a position that is substantially similar to the position held prior to the change in control will constitute a material reduction in job responsibilities; (ii) relocation by Tableau or a subsidiary, parent, affiliate or successor thereto, as appropriate, of executive’s primary business location that increases one way commute by more than 35 miles; or (iii) a reduction in then-current base salary by at least 10%, provided that an across-the-board reduction in the salary level of all other employees or consultants in positions similar to executive’s by the same percentage amount as part of a general salary level reduction will not constitute such a salary reduction.

Payment of any severance benefits described above is conditioned on the executive’s timely execution of a general release of claims in Tableau’s favor and compliance with a twelve month non-compete.

Salesforce Offer Letters

Tableau’s executive officers have entered into new offer letters for continued at-will employment with Salesforce in connection with the transaction. These offer letters with Salesforce (which we refer to as the “Salesforce offer letters”), which will be effective as of the effective time (with the compensation and benefits set forth therein to become effective on a date chosen by Salesforce), provide each individual with an annual base salary, annual cash incentive bonus, equity-based awards, and participation in Salesforce benefit plans. All equity grants (stock options and restricted stock units (which we refer to as “RSUs”)) require continuous service over an extended period of time (up to four years in some cases) in order to vest, are subject to approval of the Compensation Committee of the Salesforce Board of Directors, and will be subject to Salesforce’s applicable equity plan documents and individual award agreements. The Salesforce offer letters are described in more detail below.

 

   

Adam Selipsky. Mr. Selipsky will serve as Chief Executive Officer and President of Tableau, with an annual base salary of $800,000 and a target annual bonus of 100% of base salary. Immediately prior to the effective time, Tableau will pay Mr. Selipsky his target bonus under his current bonus plan with Tableau, with such amount pro-rated based on the number of days lapsed between January 1 of the year in which the effective time occurs and the date of the effective time. Mr. Selipsky will be granted RSUs with a value of $5,500,000, with 25% vesting on the first anniversary of the grant date and 1/16th vesting each quarter thereafter; RSUs with a value of $4,000,000, with 40% vesting on the third anniversary of the grant date and 60% vesting on the fourth anniversary of the grant date; stock options with a value of $5,500,000, with 25% vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $4,000,000, with 40% vesting on the third anniversary of the grant date and 60% vesting on the fourth anniversary of the

 

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grant date. Continued vesting is in all cases subject to Mr. Selipsky’s continued employment through the applicable vesting date. As of the effective time, any of Mr. Selipsky’s outstanding Tableau equity awards that are outstanding as of immediately prior to the effective time will be assumed and converted into Salesforce awards, except that 50% of any Tableau equity awards scheduled to vest after the third anniversary of the effective time will instead vest on the second anniversary of the effective time and 50% of any Tableau equity awards scheduled to vest after the third anniversary of the effective time will instead vest on the third anniversary of the effective time, in all cases subject to Mr. Selipsky’s continued employment through the applicable vesting date. Commencing in March 2020, Mr. Selipsky will be eligible to receive annual refresh grants of equity awards, as determined in the sole discretion of the Salesforce Board of Directors Compensation Committee. Salesforce intends to recommend to the Compensation Committee that the amount of such refresh be $12,000,000, with standard vesting terms. In March 2021, Mr. Selipsky will be eligible to receive an annual refresh grant of equity awards, as determined in the sole discretion of the Salesforce Board of Directors Compensation Committee. Salesforce intends to recommend to the Compensation Committee that the amount of this such refresh be $13,000,000, with standard vesting terms.

 

   

Damon Fletcher. Mr. Fletcher will serve as Chief Financial Officer of Tableau, with an annual base salary of $500,000 and a target annual bonus of $300,000. Mr. Fletcher will continue to participate in Tableau’s bonus plan through January 31, 2020. Mr. Fletcher’s Salesforce offer letter also provides for a cash retention bonus of $600,000, payable in four equal annual installments of $150,000, with the first payment to be paid no later than 30 days following the effective time of the transaction and the next three payments to be made on the first three anniversaries of the closing. In the event Mr. Fletcher’s employment is terminated, he will forfeit any unpaid portion of the cash retention bonus and the last installment of the retention bonus paid prior to his termination date will be subject to a pro-rated claw back, with proration based on the number of months he was employed between the last payment date prior to his termination and the 12 month anniversary of such payment date. Mr. Fletcher will be granted RSUs with a value of $1,000,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $3,500,000, with 3/7th vesting on the first anniversary of the grant date and 4/7th of the grant amount vesting on the second anniversary of the grant date; and stock options with a value of $1,000,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter. Continued vesting is in all cases subject to Mr. Fletcher’s continued employment through the applicable vesting date.

 

   

Dan Miller. Mr. Miller will serve as EVP Sales, Services & Support of Tableau, and maintain his current annual base salary. Mr. Miller will continue to participate in and be eligible to earn incentive compensation in accordance with the terms in effect with Tableau as of the effective time through January 31, 2020; effective February 1, 2020, he will be eligible to earn incentive compensation pursuant to the terms of an incentive compensation plan with Salesforce. Mr. Miller will be granted RSUs with a value of $1,250,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date; stock options with a value of $1,250,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date. Continued vesting is in all cases subject to Mr. Miller’s continued employment through the applicable vesting date.

 

   

Mark Nelson. Mr. Nelson will serve as EVP, Product Development of Tableau, and maintain his current annual base salary. Mr. Nelson will continue to be eligible to earn an annual bonus in accordance with the terms in effect with Tableau through January 31, 2020; effective February 1, 2020, he will be eligible to earn incentive compensation pursuant to the terms of an incentive compensation

 

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plan with Salesforce. Mr. Nelson will be granted RSUs with a value of $1,250,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date; stock options with a value of $1,250,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date. Continued vesting is in all cases subject to Mr. Nelson’s continued employment through the applicable vesting date.

 

   

Keenan Conder. Mr. Conder will serve as EVP and General Counsel of Tableau, and maintain his current annual base salary. Mr. Conder will continue to be eligible to earn an annual bonus in accordance with the terms in effect with Tableau through January 31, 2020; effective February 1, 2020, he will be eligible to earn incentive compensation pursuant to the terms of an incentive compensation plan with Salesforce. Mr. Conder will be granted RSUs with a value of $500,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $1,500,000, with 50% vesting on the first anniversary of the grant date and 50% vesting on the second anniversary of the grant date; stock options with a value of $500,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $1,500,000, with 50% vesting on the first anniversary of the grant date and 50% vesting on the second anniversary of the grant date. Continued vesting is in all cases subject to Mr. Conder’s continued employment through the applicable vesting date.

The Salesforce offer letters also amend the executive officers’ Tableau change in control agreements in certain respects:

Mr. Selipsky’s Salesforce offer letter amends his change in control agreement to provide for the following:

 

   

Accelerated vesting of equity awards applies only to those awards granted prior to the effective time.

 

   

The definition of “Covered Termination” in the change in control agreement is amended to extend the protected period from twelve months to thirty-six months following a change in control.

 

   

Clause (i) of the definition of “Good Reason” in the change in control agreement is amended and restated in its entirety as follows: “(A) solely if such event occurs during the 12 months following a Change in Control, a change in Executive’s reporting relationship or (B) a reduction in Executive’s grade level.”

Mr. Conder and Mr. Fletcher’s Salesforce offer letters amend their change in control agreements to provide for the following:

 

   

Accelerated vesting of equity awards applies only to those awards granted prior to the effective time.

 

   

The definition of “Covered Termination” in the change in control agreement is amended to extend the protected period from twelve months to twenty-four months following a change in control, except with respect to a resignation for Good Reason by reason of relocation and except as set forth in the following bullet.

 

   

Clause (i) of the definition of “Good Reason” in the change in control agreements is amended and restated in their entirety as follows: “(A) solely if such event occurs during the 12 months following a Change in Control, a reduction in Executive’s reporting level or (B) a reduction in Executive’s grade level.”

Mr. Miller and Mr. Nelson’s Salesforce offer letters amend their change in control agreements to provide for the following:

 

   

Accelerated vesting of equity awards applies only to those awards granted prior to the effective time.

 

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The definition of “Covered Termination” in the change in control agreement is amended to extend the protected period from twelve months to twenty-four months following a change in control, except with respect to a resignation for Good Reason by reason of relocation and except as set forth in the following bullet.

 

   

Clause (i) of the definition of “Good Reason” in the change in control agreements is amended and restated in their entirety as follows: “(A) solely if such event occurs during the 12 months following a Change in Control, Executive ceasing to report to Adam Selipsky or his successor or (B) a reduction in Executive’s grade level.”

Employee Stock Purchase Plan

Any Tableau employee who is not a participant in the ESPP as of the date of the merger agreement may not become a participant in any offering periods in effect under the ESPP as of the date of the merger agreement (which we refer to as the “current ESPP offering periods”) and no participant may increase the percentage of his or her payroll deduction election from that in effect on the date of the merger agreement for such current ESPP offering periods. If the current ESPP offering periods terminate prior to the effective time, then the ESPP will be suspended and no new offering period will commence under the ESPP prior to the termination of the merger agreement. If any current ESPP offering period is still in effect at the effective time, then the last day of such current ESPP offering period will be accelerated to the date prior to the closing date. Subject to the consummation of the merger, the ESPP will terminate effective immediately prior to the effective time.

Indemnification and Insurance

Under the merger agreement, for a period of not less than six years after the effective time of the merger, Salesforce must, and must cause the surviving corporation in the merger to, indemnify and hold harmless, to the fullest extent permitted under applicable law and the organizational documents of Tableau or its subsidiaries, or any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce, each current and former director and officer of Tableau and its subsidiaries against any costs and expenses in connection with any actual or threatened claims in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time of the merger, whether asserted or claimed prior to, at or after the effective time of the merger, in connection with such person serving as an officer, director, employee or other fiduciary of Tableau, any of its subsidiaries or any other person if such service was at the request or for the benefit of Tableau or any of its subsidiaries.

In addition, for a period of six years following the effective time of the merger, Salesforce is required to maintain in effect the provisions in the organizational documents of Tableau and any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce (except to the extent such agreement provides for an earlier termination) regarding elimination of liability, indemnification of officers, directors and employees and advancement of expenses that are in existence as of the date of the merger agreement.

At or prior to the effective time of the merger, Tableau is required to purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the effective time of the merger with respect to matters arising at or prior to the effective time of the merger, with a one-time cost not in excess of 300% of the last aggregate annual premium paid by Tableau for its directors’ and officers’ liability insurance and fiduciary liability insurance prior to the date of the merger agreement, and if the cost of such “tail” insurance policy would otherwise exceed such amount, Tableau may purchase as much coverage as reasonably practicable for such amount. See “Merger Agreement—Directors’ and Officers’ Indemnification and Insurance.”

 

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Section 16 Matters

Pursuant to the merger agreement, prior to the effective time of the merger, Tableau and Salesforce have agreed to, as applicable, take all such steps as may be reasonably necessary or advisable to cause any dispositions of equity securities of Tableau (including derivative securities) and acquisitions of equity securities of Salesforce pursuant to the transactions contemplated by the merger agreement by each individual who is a director or officer of Tableau subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Tableau to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Rule 14d-10(d) Matters

The compensation committee of the Tableau board of directors at a meeting to be held prior to the acceptance time, will duly adopt resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (i) each employment compensation, severance and other employee benefit plans of the Tableau directors, executive officers and employees effective on or prior to the date the merger agreement or entered into thereafter and prior to the effective time, and (ii) certain provisions of the merger agreement relating to indemnification, insurance and other compensation and benefits provided to Tableau’s directors, executive officers and employees. In addition, the compensation committee of the Tableau board of directors will take all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act, including with respect to the foregoing arrangements and any other applicable transactions contemplated by the merger agreement.

Certain Relationships with Tableau

As of the date of this document, Salesforce does not own any shares of Tableau common stock. Neither Salesforce nor the Offeror has effected any transaction in securities of Tableau in the past 60 days. To the best of Salesforce’s and the Offeror’s knowledge, after reasonable inquiry, none of the persons listed on Annex C hereto, nor any of their respective associates or majority-owned subsidiaries, beneficially owns or has the right to acquire any securities of Tableau or has effected any transaction in securities of Tableau during the past 60 days.

Tableau has been a Salesforce customer for over five years, and Salesforce has been a customer of Tableau for over a decade.

Salesforce and Tableau entered into a confidentiality agreement, dated February 27, 2019 in connection with their evaluation of the potential business combination that resulted in the execution of the merger agreement. Pursuant to the confidentiality agreement, subject to certain customary exceptions, Salesforce and Tableau agreed to keep confidential all non-public information received from the other party. Salesforce and Tableau also agreed that the non-public information furnished by the other party pursuant to the confidentiality agreement would be used solely for the purpose of evaluating, negotiating and consummating the potential business combination. The confidentiality agreement contains a customary “standstill” provision that prohibits Salesforce, its subsidiaries or representatives acting on its behalf from taking certain actions involving or with respect to Tableau for a one-year period, subject to certain exceptions set forth in the confidentiality agreement. See “Other Transaction Agreements—Confidentiality Agreement” and the confidentiality agreement, which is filed as Exhibit 99.5 to this document.

Salesforce and Tableau entered into an exclusivity agreement, dated May 18, 2019 and amended on June 4, 2019, in connection with their evaluation of the potential business combination that resulted in the execution of the merger agreement. The exclusivity agreement set forth certain terms on which Salesforce and Tableau would conduct negotiations regarding the potential business combination that resulted in the execution of the merger agreement. See “Other Transaction Agreements—Exclusivity Agreement” and the exclusivity agreement and the amendment to the exclusivity agreement, copies of which have been filed as Exhibit 99.6 and Exhibit 99.7 to this document.

 

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Fees and Expenses

Salesforce has retained Morrow Sodali LLC as information agent in connection with the offer and the merger. The information agent may contact holders of shares by mail, email, telephone, facsimile and personal interview and may request brokers, dealers and other nominee stockholders to forward material relating to the offer and the merger to beneficial owners of shares. Salesforce will pay the information agent reasonable and customary compensation for these services in addition to reimbursing the information agent for its reasonable out-of-pocket expenses. Salesforce agreed to indemnify the information agent against certain liabilities and expenses, including certain liabilities under the U.S. federal securities laws.

In addition, Salesforce has retained American Stock Transfer and Trust Company, LLC as exchange agent in connection with the offer and the merger (which we refer to as the “exchange agent”). Salesforce will pay the exchange agent reasonable and customary compensation for its services in connection with the offer and the merger, will reimburse the exchange agent for its reasonable out-of-pocket expenses and will indemnify the exchange agent against certain liabilities and expenses, including certain liabilities under the U.S. federal securities laws.

Salesforce will reimburse brokers, dealers, commercial banks and trust companies and other nominees, upon request, for customary clerical and mailing expenses incurred by them in forwarding offering materials to their customers. Except as set forth above, neither Salesforce nor the Offeror will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Tableau shares pursuant to the offer.

Accounting Treatment

In accordance with U.S. generally accepted accounting principles, Salesforce will account for the acquisition of shares through the offer and the merger under the acquisition method of accounting for business combinations.

Stock Exchange Listing

Salesforce shares are listed on the NYSE under the symbol “CRM.” Salesforce intends to submit a supplemental listing application to list on the NYSE the Salesforce shares that Salesforce will issue in the offer and merger as part of the transaction consideration. Such listing is a condition to completion of the offer.

Resale of Salesforce Common Stock

All Salesforce shares received by Tableau stockholders as part of the transaction consideration in the offer and the merger will be freely tradable for purposes of the Securities Act, except for Salesforce shares received by any person who is deemed an “affiliate” of Salesforce at the time of the closing of the merger. Salesforce shares held by an affiliate of Salesforce may be resold or otherwise transferred without registration in compliance with the volume limitations, manner of sale requirements, notice requirements and other requirements under Rule 144 or as otherwise permitted under the Securities Act. This document does not cover resales of Salesforce shares received upon completion of the offer or the merger by any person, and no person is authorized to make any use of this document in connection with any such resale.

 

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Exchange Agent Contact Information

The contact information for the exchange agent for the offer and the merger is:

 

 

LOGO

 

If delivering by mail:

 

American Stock Transfer & Trust Company, LLC

Operations Center

Attn: Reorganization Department

6201 15th Avenue

Brooklyn, New York 11219

 

Phone: Toll-free (877) 248-6417

(718) 921-8317

Fax (718) 234-5001

  

If delivering by hand, express mail, courier

or any other expedited service:

 

American Stock Transfer & Trust Company, LLC

Operations Center

Attn: Reorganization Department

6201 15th Avenue

Brooklyn, New York 11219

 

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MERGER AGREEMENT

The following summary describes certain material provisions of the merger agreement entered into by Salesforce, the Offeror and Tableau, a copy of which is attached hereto as Annex A. This summary may not contain all of the information about the merger agreement that is important to Tableau stockholders, and Tableau stockholders are encouraged to read the merger agreement carefully in its entirety. The legal rights and obligations of the parties are governed by the specific language of the merger agreement and not this summary.

The Offer

The Offeror is offering to exchange for each outstanding share of Tableau Class A common stock and Tableau Class B common stock validly tendered, and not validly withdrawn, in the offer, 1.103 shares of Salesforce common stock, with cash in lieu of any fractional shares of Salesforce common stock, without interest and less any applicable withholding taxes. Each of Salesforce and the Offeror shall use its reasonable best efforts to consummate the offer.

The Offeror’s obligation to accept for exchange (and Salesforce’s obligation to cause the Offeror to accept for exchange) Tableau shares validly tendered, and not validly withdrawn, pursuant to the offer is subject to the satisfaction or waiver by the Offeror of certain conditions, including the condition that, prior to the expiration of the offer, there have been validly tendered and not validly withdrawn a number of Tableau shares that, upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered, and not validly withdrawn, will convert into shares of Tableau Class A common stock upon the consummation of the offer), together with Tableau shares then owned by Salesforce and the Offeror, if any, would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer (which we refer to as the “minimum tender condition”), as more fully described under “The Offer—Conditions of the Offer.”

Under the merger agreement, unless Salesforce receives the prior written consent of Tableau:

 

   

the Offeror must (and Salesforce shall cause the Offeror to) extend the offer for any period required by any law, or any rule, regulation, interpretation or position of the SEC, its staff or the NYSE applicable to the offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or the offer documents or this registration statement on Form S-4;

 

   

in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived as of any then-scheduled expiration of the offer, the Offeror must (and Salesforce shall cause the Offeror to) extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and

 

   

if as of any then-scheduled expiration of the offer each condition to the offer (other than the minimum tender condition, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau, must (and Salesforce shall cause the Offeror to), extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of

 

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Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or have been tendered but validly withdrawn, in the offer as of such time and (y) as of such time the founders whose untendered shares of Tableau common stock are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares of Tableau common stock into the offer; or (ii) for more than 20 business days in the aggregate.

The Offeror may not terminate or withdraw the offer prior to the then-scheduled expiration of the offer unless the merger agreement is validly terminated in accordance with its terms, in which case the Offeror will terminate the offer promptly (but in no event more than one business day) after such termination. Among other circumstances, the merger agreement may be terminated by either Salesforce or Tableau if the offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Salesforce or the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer, or if the acceptance for exchange of Tableau shares tendered in the offer has not occurred on or before October 9, 2019 (subject to extension to January 9, 2020 in certain circumstances described under “—Termination of the Merger Agreement”), which we refer to as the “outside date.” See “—Termination of the Merger Agreement.”

For a more complete description of the offer, see “The Offer.”

The Merger

The merger agreement provides that, if the offer is completed, the parties will effect the merger of the Offeror with and into Tableau, with Tableau continuing as the surviving corporation in the merger, and the former Tableau stockholders will not have any direct equity ownership interest in the surviving corporation. If the offer is completed, such that Salesforce accordingly owns at least a majority of the aggregate voting power of Tableau shares, the merger will be governed by Section 251(h) of the General Corporation Law of the DGCL, and accordingly no Tableau stockholder vote will be required to complete the merger.

Completion and Effectiveness of the Merger

Under the merger agreement, the closing of the merger must occur as promptly as practicable, and in any case no later than the first business day after the acceptance of tendered Tableau shares in the offer and the satisfaction of the other conditions to the merger, unless the parties agree otherwise in writing. See “—Conditions to the Merger.” The merger will become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware or on such other date and time as agreed to by Salesforce and Tableau and specified in the certificate of merger.

Transaction Consideration Payable Pursuant to the Merger

In the merger, except as provided below, each outstanding Tableau share that was not acquired by the Offeror in the offer will be converted into the right to receive the transaction consideration—that is, 1.103 shares of Salesforce common stock, with cash in lieu of any fractional shares of Salesforce common stock, without interest and less any applicable withholding taxes.

In the merger, Tableau shares that are owned or held in treasury by Tableau or owned by Salesforce or the Offeror will be cancelled without any consideration being delivered. In the merger, Tableau shares that are owned by any wholly owned subsidiary of Salesforce (other than the Offeror) or of Tableau will be converted into shares of common stock of the surviving corporation in accordance with the merger agreement.

Fractional Shares

Salesforce will not issue fractional shares of Salesforce common stock in the offer or the merger. Instead, each holder of Tableau shares who otherwise would be entitled to receive fractional shares of Salesforce common

 

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stock will be entitled to an amount in cash, without interest, equal to such fraction of a share of Salesforce common stock multiplied by the volume weighted average closing sale price of one share of Salesforce common stock as reported on the NYSE for the 10 consecutive trading days ending on the trading day immediately preceding the day the Offeror accepts for payment all Tableau shares tendered in the offer, rounded to the nearest whole cent.

Exchange of Tableau Stock Book-Entry Shares for the Transaction Consideration

Salesforce has retained American Stock Transfer and Trust Company, LLC as the depositary and exchange agent for the offer and the merger to handle the exchange of Tableau shares for the transaction consideration.

All Tableau shares are held in electronic book-entry form. No holder of book-entry Tableau shares will be required to deliver a certificate or letter of transmittal or surrender such book-entry Tableau shares to the exchange agent to receive the transaction consideration. In lieu thereof, each book-entry Tableau share will automatically on the effective time be entitled to receive, and Salesforce will cause the exchange agent to pay and deliver in exchange therefor as promptly as reasonably practicable after the effective time, the transaction consideration (including cash in lieu of any fractional shares of Salesforce common stock), and the payment of any dividends or other distributions, without interest, which prior to proper exchange of such Tableau shares had become payable with respect to the shares of Salesforce common stock issuable as transaction consideration in respect of such Tableau shares.

No interest will be paid or will accrue on any portion of the transaction consideration payable in respect of any Tableau share.

After the effective time of the merger, each Tableau share that has not been surrendered will represent only the right to receive upon such surrender the transaction consideration to which such holder is entitled by virtue of the merger and any dividends or other distributions payable to such holder upon such surrender.

Conditions to the Merger

The obligations of Salesforce, the Offeror and Tableau to effect the merger will be subject to the satisfaction of each of the following conditions, any and all of which may be waived in whole or in part by Salesforce, the Offeror and Tableau, as the case may be, to the extent permitted by applicable law:

 

   

Completion of Offer—The Offeror has accepted for payment all of the Tableau shares validly tendered in the offer and not validly withdrawn pursuant to the offer.

 

   

No Legal Prohibition—No governmental entity of competent jurisdiction has (i) enacted, issued or promulgated any law that is in effect as of immediately prior to the effective time or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the effective time, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the merger.

Representations and Warranties

The merger agreement contains customary representations and warranties of the parties. These include representations and warranties of Tableau with respect to:

 

   

organization and qualification;

 

   

subsidiaries;

 

   

capitalization;

 

   

corporate authority relative to the merger agreement;

 

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due execution, delivery and enforceability of the merger agreement;

 

   

required consents and approvals;

 

   

no violations;

 

   

SEC reports and filings;

 

   

financial statements;

 

   

internal controls and procedures;

 

   

the absence of undisclosed liabilities;

 

   

absence of certain changes or events;

 

   

compliance with laws and permits;

 

   

employee benefit plans;

 

   

labor matters;

 

   

tax matters;

 

   

litigation; orders;

 

   

intellectual property;

 

   

privacy and data protection;

 

   

real property; assets;

 

   

material contracts;

 

   

environmental matters;

 

   

customers; suppliers; resellers; government entities;

 

   

insurance;

 

   

information supplied for SEC filings;

 

   

opinion of financial advisor;

 

   

takeover statutes;

 

   

related party transactions; and

 

   

finders and brokers.

The merger agreement also contains customary representations and warranties of Salesforce and the Offeror, including with respect to:

 

   

organization and qualification;

 

   

subsidiaries;

 

   

capitalization;

 

   

corporate authority relative to the merger agreement;

 

   

due execution, delivery and enforceability of the merger agreement;

 

   

required consents and approvals;

 

   

no violations;

 

   

SEC reports and filings;

 

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financial statements;

 

   

internal controls and procedures;

 

   

the absence of undisclosed liabilities;

 

   

absence of changes or events;

 

   

compliance with laws and permits;

 

   

litigation; orders;

 

   

information supplied for SEC filings;

 

   

valid issuance of Salesforce common stock in the offer and the merger;

 

   

finders and brokers;

 

   

no Tableau common stock ownership;

 

   

activity of the Offeror; and

 

   

tax matters.

Certain representations and warranties contained in the merger agreement are qualified by “material adverse effect,” as described below. The representations and warranties contained in the merger agreement will expire at the effective time of the merger. The representations, warranties and covenants made by Tableau in the merger agreement are qualified by information contained in Tableau’s confidential disclosure letter delivered to Salesforce in connection with the execution of the merger agreement and by filings that Tableau has made with the SEC since January 1, 2017 and prior to the date of the merger agreement. The representations, warranties and covenants made by Salesforce and the Offeror in the merger agreement are qualified by information contained in Salesforce’s confidential disclosure letter delivered to Tableau in connection with the execution of the merger agreement and by filings that Salesforce has made with the SEC since January 1, 2017 and prior to the date of the merger agreement. The representations, warranties and covenants of each party in the merger agreement were made only for the purposes of, and were and are solely for the benefit of the parties to, the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosure letters made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to holders of Tableau common stock. Accordingly, the representations and warranties may not describe the actual state of affairs as of the date of the merger agreement or at any other time, and holders of Tableau common stock should not rely on them as statements of fact. These confidential disclosure letters contain information that modifies, qualifies and creates exceptions to the representations and warranties and certain covenants set forth in the merger agreement. Holders of Tableau common stock are not third-party beneficiaries of these representations, warranties and covenants under the merger agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Tableau or any of its affiliates or of Salesforce or any of its affiliates.

Material Adverse Effect

A “material adverse effect” with respect to Salesforce or Tableau, means any change, effect, development, circumstance, condition, state of facts, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations of such party and its subsidiaries, taken as a whole, except that no such change, effect, development, circumstance, condition, state of facts, event or occurrence resulting or arising from any of the following will be deemed to constitute a material adverse effect or will be taken into account when determining whether a material adverse effect exists or has occurred:

 

  (a)

any changes in U.S., regional, global or international economic conditions, including any changes affecting financial, credit, foreign exchange or capital market conditions;

 

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  (b)

any changes in conditions in any industry or industries in which such party and its subsidiaries operate;

 

  (c)

any changes in political, geopolitical, regulatory or legislative conditions in the United States or any other country or region of the world;

 

  (d)

any changes after the date of the merger agreement in GAAP or the interpretation thereof;

 

  (e)

any changes after the date of the merger agreement in applicable law or the interpretation thereof;

 

  (f)

any failure by such party to meet any internal or published projections, estimates or expectations of such party’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by such party to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a “material adverse effect” may be taken into account);

 

  (g)

any acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, natural disasters or other force majeure events, including any material worsening of such conditions threatened or existing as of the date of the merger agreement;

 

  (h)

the execution and delivery of the merger agreement, the identity of Salesforce, Tableau or any of their subsidiaries, as applicable, the pendency or consummation of the merger agreement, the transactions contemplated by the merger agreement, including the effect thereof on the relationships with current or prospective customers, suppliers, distributors, partners, financing sources, employees or sales representatives, or the public announcement of the merger agreement or the transactions contemplated by the merger agreement, including any litigation arising out of or relating to the merger agreement or the transactions contemplated by the merger agreement, in each case only to the extent resulting from the execution and delivery of the merger agreement, the identity of Salesforce, Tableau or any of their subsidiaries, as applicable, the pendency or consummation of the merger agreement, the transactions contemplated by the merger agreement, or the public announcement of the merger agreement or the transactions contemplated by the merger agreement, as applicable (except that this clause (h) will not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address, as applicable, the consequences resulting from the execution and delivery of the merger agreement, the pendency or consummation of the transactions contemplated by the merger agreement or to address the consequences of litigation); and

 

  (i)

any action or failure to take any action which action or failure to act is requested in writing by the other party or otherwise expressly required by the terms of the merger agreement (other than pursuant to Tableau’s covenant to use reasonable best efforts to conduct its business in all material respects in the ordinary course of business until the earlier of the effective time of the merger or the date (if any) the merger agreement is terminated);

provided that with respect to the exceptions in clauses (a), (b), (c), (d), (e) and (g), if such change, effect, development, circumstance, condition, state of facts, event or occurrence has had a disproportionate adverse effect on such party relative to other companies operating in the industry or industries in which such party operates, then only the incremental disproportionate adverse effect of such change, effect, development, circumstance, condition, state of facts, event or occurrence will be taken into account for the purpose of determining whether a “material adverse effect” exists or has occurred.

No Solicitation of Other Offers by Tableau

Under the terms of the merger agreement, subject to certain exceptions described below, Tableau has agreed that, from the date of the merger agreement until the earlier of the acceptance time (as defined below) or the date (if any) on which the merger agreement is terminated, Tableau will not and will cause its subsidiaries, and its and

 

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their respective officers and directors not to, and Tableau will use reasonable best efforts to cause its and its subsidiaries’ other representatives to not, directly or indirectly:

 

  (a)

solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer, which constitutes or would be reasonably expected to lead to an acquisition proposal (as defined below);

 

  (b)

participate in any negotiations regarding, or furnish to any person any non-public information relating to Tableau or any of its subsidiaries in connection with, an actual or potential acquisition proposal;

 

  (c)

adopt, approve, endorse or recommend, or publicly propose to adopt, approve, endorse or recommend, any acquisition proposal;

 

  (d)

withdraw, change, amend, modify or qualify, or otherwise propose to withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer, or resolve or agree to take any such action;

 

  (e)

if an acquisition proposal has been publicly disclosed, fail to publicly recommend against any such acquisition proposal within 10 business days after the public disclosure of such acquisition proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, such rejection of such acquisition proposal) and reaffirm the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer within such 10 business day period (or, if earlier, by the second business day prior to the then-scheduled expiration of the offer);

 

  (f)

fail to include the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer in the Schedule 14D-9;

 

  (g)

approve, or authorize, or cause or permit Tableau or any of its subsidiaries to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or document with respect to, or any other agreement or commitment providing for, any acquisition proposal (other than certain confidentiality agreements);

 

  (h)

call or convene a meeting of Tableau stockholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or

 

  (i)

resolve or agree to do any of the foregoing.

We refer to the actions set forth in clauses (c), (d), (e), (f) and (i) (to the extent clause (i) is related to the foregoing clauses (c), (d) or (e)) above as a “change of recommendation.”

In addition, under the merger agreement, Tableau has agreed that:

 

   

it will and will cause its subsidiaries, and its and their respective officers and directors to, and Tableau will use reasonable best efforts to cause its and its subsidiaries’ other representatives to, immediately cease any and all existing solicitation, discussions or negotiations with any persons, or provision of any non-public information to any persons, with respect to any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal;

 

   

it will promptly request in writing that each person that previously executed a confidentiality agreement with Tableau in connection with its consideration of an acquisition proposal or a potential acquisition proposal promptly destroy or return to Tableau all non-public information furnished by Tableau or any of its representatives to such person or any of its representatives in accordance with the terms of such confidentiality agreement; and

 

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it will terminate access to any physical or electronic data rooms relating to a possible acquisition proposal by such person and its representatives.

Under the merger agreement, Tableau must enforce, and not waive, terminate or modify without Salesforce’s prior written consent, any confidentiality, standstill or similar provision in any confidentiality, standstill or other agreement; provided that, if the Tableau board of directors determines in good faith after consultation with Tableau’s outside legal counsel that the failure to waive a particular standstill provision would be reasonably likely to violate the directors’ fiduciary duties under applicable law, Tableau may, with prior written notice to Salesforce, waive such standstill solely to the extent necessary to permit the applicable person (if it has not been solicited in violation of the merger agreement) to make, on a confidential basis to the Tableau board of directors, an acquisition proposal, conditioned upon such person agreeing to disclosure of such acquisition proposal to Salesforce, in each case as contemplated by the merger agreement.

Notwithstanding the prohibitions described above, if Tableau receives, prior to the acceptance time, an unsolicited bona fide written acquisition proposal that did not result from a breach of Tableau’s non-solicitation obligations, Tableau, its subsidiaries and its representatives are permitted to contact the person or any of its representatives who has made such acquisition proposal to clarify the terms and conditions of such acquisition proposal so that Tableau may inform itself about such acquisition proposal. Further, Tableau, its subsidiaries and its representatives are permitted to furnish non-public information to such person and engage in discussions or negotiations with such person with respect to the acquisition proposal, as long as:

 

   

the Tableau board of directors determines in good faith, after consulting with Tableau’s outside legal counsel and financial advisors, that such proposal constitutes, or would reasonably be expected to result in, a superior proposal;

 

   

the Tableau board of directors determines in good faith, after consulting with Tableau’s outside legal counsel, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law; and

 

   

(x) prior to providing any such non-public information, the person making the acquisition proposal enters into a confidentiality agreement that contains terms that are no less favorable in the aggregate to Tableau than those contained in the confidentiality agreement between Salesforce and Tableau (provided that the confidentiality agreement is not required to include a standstill provision) and that does not in any way restrict Tableau or its representatives from complying with its disclosure obligations under the merger agreement, and (y) Tableau also provides Salesforce, prior to or substantially concurrently with the time such information is provided or made available to such person, any nonpublic information furnished to such other person that was not previously furnished to Salesforce.

Under the merger agreement, Tableau will notify Salesforce promptly (and in any event within 24 hours) of Tableau’s or any of Tableau’s controlled affiliates’ or its or their respective representatives’ receipt of any acquisition proposal, any proposals or inquiries that would reasonably be expected to lead to an acquisition proposal, or any inquiry or request for non-public information relating to Tableau or any of its subsidiaries by any person who has made or would reasonably be expected to make any acquisition proposal. The notice must include the identity of the person making the acquisition proposal, inquiry or request, and the material terms and conditions of any such proposal or offer or the nature of the information requested pursuant to any such inquiry or request, including unredacted copies of all proposals or offers (including any proposed agreements received by Tableau relating to such acquisition proposal) or, if such acquisition proposal is not in writing, a reasonably detailed written description of the material terms and conditions thereof. Tableau will keep Salesforce reasonably informed on a prompt and timely basis of the status and material terms (including any amendments or proposed amendments to such material terms) of any such acquisition proposal or potential acquisition proposal, and as to the nature of any information requested of Tableau with respect thereto and provide to Salesforce copies of all proposals, offers and proposed agreements relating to an acquisition proposal received by Tableau or, if such

 

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information or communication is not in writing, a reasonably detailed written description of the material contents thereof. Tableau also must promptly provide (and in any event within 24 hours) Salesforce with any material non-public information concerning Tableau provided to any other person in connection with any acquisition proposal that was not previously provided to Salesforce. Without limiting the foregoing, Tableau will promptly (and in any event within 24 hours after such determination) inform Salesforce in writing if Tableau determines to begin providing information or to engage in discussions or negotiations concerning an acquisition proposal to the extent otherwise permitted by the merger agreement.

The “acceptance time” for purposes of the merger agreement is the time that the Offeror accepts for payment all Tableau shares that are validly tendered and not validly withdrawn pursuant to the offer promptly after the expiration of the offer (as it may be extended pursuant to the terms of the merger agreement) or, at Salesforce’s election, concurrently with the expiration of the offer if all conditions to the offer have been satisfied or waived in accordance with the merger agreement.

An “acquisition proposal” for purposes of the merger agreement means any offer, proposal or indication of interest from any person or group (as defined in Section 13(d) of the Exchange Act), other than a proposal or offer by Salesforce or a subsidiary of Salesforce, at any time relating to any transaction or series of related transactions involving:

 

   

any acquisition or purchase by any person, directly or indirectly, of more than 15% of any class of outstanding Tableau voting or equity securities (whether by voting power or number of shares);

 

   

any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any person or group beneficially owning more than 15% of any class of outstanding Tableau voting or equity securities (whether by voting power or number of shares);

 

   

any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction, in each case involving Tableau and any other person or group, pursuant to which the Tableau stockholders immediately prior to such transaction hold less than 85% of the equity interests in the surviving, resulting or ultimate parent entity of such transaction (whether by voting power or number of shares); or

 

   

any sale, lease, exchange, transfer or other disposition to any person or group of more than 15% of the consolidated assets of Tableau and its subsidiaries (measured by fair market value).

A “superior proposal” for purposes of the merger agreement means a bona fide, written acquisition proposal by a third party which the Tableau board of directors determines in good faith (after consultation with Tableau’s outside legal counsel and financial advisors) to be more favorable to Tableau stockholders from a financial point of view than the offer and the merger, taking into account all relevant factors, including all the terms and conditions of such proposal or offer (including the transaction consideration, conditionality, timing, certainty of financing or regulatory approvals and likelihood of consummation) and the merger agreement, as well as any changes to the terms of the merger agreement proposed by Salesforce in response to any acquisition proposal. When determining whether an offer constitutes a superior proposal, references in definition of the term “acquisition proposal” to “15%” or “85%” will be replaced with references to “80%” and “20%,” respectively.

Change of Recommendation; Match Rights

At any time prior to the acceptance time:

 

   

the Tableau board of directors may make a change of recommendation in response to an intervening event (as defined below) if the Tableau board of directors has determined in good faith, after consultation with Tableau’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law; or

 

   

the Tableau board of directors may make a change of recommendation and cause Tableau to terminate the merger agreement in order to enter into a definitive agreement providing for an unsolicited

 

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acquisition proposal that did not result from a breach of Tableau’s non-solicitation obligations (subject to payment by Tableau to Salesforce of the termination fee described under “—Termination Fee and Expenses”) which the Tableau board of directors has determined in good faith after consultation with Tableau’s outside legal counsel and financial advisors is a superior proposal, but only if the Tableau board of directors has determined in good faith after consultation with Tableau’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law.

Prior to making a change of recommendation for any reason set forth above, Tableau must provide Salesforce with four business days’ prior written notice advising Salesforce that the Tableau board of directors intends to make a change of recommendation. The notice must specify in reasonable detail the reasons for such change of recommendation due to an intervening event, or the material terms and conditions of the acquisition proposal (including a copy of any proposed definitive agreement) for any change of recommendation due to a superior proposal. In each case, Tableau must procure that its representatives negotiate in good faith (solely to the extent Salesforce desires to negotiate) any proposal by Salesforce to amend the merger agreement in a manner that would eliminate the need for the Tableau board of directors to make such change of recommendation, and the Tableau board of directors must make the required determination regarding its fiduciary duties again at the end of such four business day negotiation period (after in good faith taking into account the amendments to the merger agreement proposed by Salesforce, if any). With respect to any change of recommendation in response to a superior proposal, if there is any material amendment, revision or change to the terms of the then-existing superior proposal (including any revision to the amount, form or mix of consideration proposed to be received by Tableau stockholders as a result of such superior proposal), Tableau must notify Salesforce of each such amendment, revision or change and the applicable four day business period will be extended until at least three business days after the time that Salesforce receives notification of such revision.

An “intervening event” for purposes of the merger agreement means any change, effect, development, circumstance, condition, state of facts, event or occurrence that is material to Tableau and its subsidiaries, taken as a whole, and was not known by or reasonably foreseeable to Tableau or the Tableau board of directors as of or prior to the date of the merger agreement, except that in no event will the following events, changes or developments constitute an “intervening event”: (a) the receipt, existence or terms of an acquisition proposal or any matter relating thereto or consequence thereof, (b) changes in the market price or trading volume of the Tableau Class A common stock, the Salesforce common stock or any other securities of Tableau, Salesforce or their respective subsidiaries, or any change in credit rating or the fact that Tableau meets or exceeds (or that Salesforce fails to meet or exceed) internal or published estimates, projections, forecasts or predictions for any period, (c) changes in general economic, political or financial conditions or markets (including changes in interest rates, exchange rates, stock, bond or debt prices) or (d) changes in GAAP, other applicable accounting rules or applicable law or, in any such case, changes in the interpretation thereof.

Nothing in the merger agreement prohibits Tableau or the Tableau board of directors from (a) disclosing to Tableau stockholders a position contemplated by Item 1012(a) of Regulation M-A or Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, (b) making any “stop, look and listen” communication to Tableau stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act, or (c) making any legally required disclosure to Tableau stockholders with regard to an acquisition proposal, in each case so long as any such disclosure (x) includes an express reaffirmation of the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer, without any amendment, withdrawal, alteration, modification or qualification thereof and (y) does not include any statement that constitutes, and does not otherwise constitute, a change of recommendation under the merger agreement.

 

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Conduct of Business Before Completion of the Merger

Restrictions on Tableau’s Operations

The merger agreement provides for certain restrictions on Tableau’s and its subsidiaries’ activities until the earlier of the effective time of the merger or the date (if any) the merger agreement is terminated. In general, except as specifically permitted, set forth in Tableau’s confidential disclosure letter, or required by the merger agreement, as required by applicable law or as consented to in writing by Salesforce, subject to specified exceptions set forth in the merger agreement, Tableau and each of its subsidiaries is required to use reasonable best efforts to conduct its business in all material respects in the ordinary course of business, including by (i) preserving intact its and their present business organizations, goodwill and ongoing business, (ii) keeping available the services of its and their present officers and other key employees and (iii) preserving its and their relationships with customers, suppliers, vendors, resellers, licensors, licensees, governmental entities and other persons with whom it and they have material business relations. In addition, except as specifically permitted or required by the merger agreement, as required by applicable law or as consented to in writing by Salesforce (which, in certain specified cases, may not be unreasonably withheld, conditioned or delayed), subject to specified exceptions set forth in the merger agreement, Tableau must not and must not permit any of its subsidiaries to, directly or indirectly:

 

   

amend, modify, waive, rescind, change or otherwise restate Tableau’s or any of its subsidiaries’ certificate of incorporation, bylaws or equivalent organizational documents;

 

   

authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of Tableau or any of its subsidiaries) (other than dividends or distributions made by any wholly owned subsidiary of Tableau to Tableau or any wholly owned subsidiary of Tableau);

 

   

enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or securities;

 

   

split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests, except for (a) the acceptance of shares of Tableau common stock as payment of the exercise price of Tableau options or for withholding taxes in respect of Tableau equity awards or (b) any such transaction involving only wholly owned subsidiaries of Tableau;

 

   

issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in Tableau or any of its subsidiaries or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units;

 

   

take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Tableau equity award under any existing Tableau equity plan (except as otherwise provided by the express terms of any Tableau equity award), other than (a) issuances of Tableau common stock in respect of any exercise of Tableau options outstanding on the date of the merger agreement or the vesting or settlement of Tableau equity awards outstanding on the date of the merger agreement, in all cases in accordance with their respective terms as of the date of the merger agreement, (b) issuances of Tableau common stock in respect of any awards outstanding under the ESPP in respect of the current ESPP offering periods, (c) sales of shares of Tableau common stock pursuant to the exercise of Tableau options if necessary to effectuate an optionee direction upon exercise or pursuant to the settlement of Tableau equity awards in order to satisfy tax withholding obligations or (d) transactions solely between Tableau and its wholly owned subsidiaries or between such wholly owned subsidiaries;

 

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except as required by any Tableau benefit plan in existence as of the date of the merger agreement and set forth in Tableau’s confidential disclosure letter, (a) increase the compensation or benefits payable or to become payable to any Tableau director, executive officer or employee; (b) grant to any Tableau director, executive officer or employee any increase in severance or termination pay; (c) pay or award, or commit to pay or award, any bonuses, retention or incentive compensation to any of Tableau’s directors, executive officers or employees; (d) enter into any employment, severance or retention agreement (excluding offer letters that do not provide for severance or change in control benefits) with any of Tableau’s directors, executive officers or employees; (e) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Tableau benefit plan, except for certain exceptions described in the merger agreement; (f) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Tableau benefit plan; (g) terminate the employment of any Tableau employee at the level of vice president or above, other than for cause; (h) hire any new Tableau employees, except for non-officer employees at the level of vice president level and below; or (i) provide any funding for any rabbi trust or similar arrangement;

 

   

acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or publicly announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or a material portion of the assets of any person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations, except for (a) transactions solely between Tableau and its wholly owned subsidiaries or between such wholly owned subsidiaries, (b) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice or (c) capital expenditures in accordance with Tableau’s capital budget provided to Salesforce prior to the date of the merger agreement;

 

   

liquidate (completely or partially), dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization or reorganization between or among any of Tableau or its subsidiaries), or adopt any plan or resolution providing for any of the foregoing;

 

   

make any loans, advances or capital contributions to, or investments in, any other person, except for (a) loans solely among Tableau and its wholly owned subsidiaries or solely among Tableau’s wholly owned subsidiaries or (b) advances for reimbursable employee expenses in the ordinary course of business;

 

   

sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any lien (other than certain permitted liens), any of its material properties or assets, except (a) dispositions of obsolete or worthless equipment, in the ordinary course of business, (b) nonexclusive license or other nonexclusive grants of rights in or under any of Tableau’s intellectual property or products entered into in the ordinary course of business consistent with past practice with customers, (c) pursuant to transactions solely among Tableau and its wholly owned subsidiaries or solely among such wholly owned subsidiaries or (d) pursuant to certain agreements in effect prior to the execution of the merger agreement and set forth in Tableau’s confidential disclosure letter;

 

   

terminate or materially amend or modify any written policies or procedures with respect to the use or distribution by Tableau or any of its subsidiaries of any open source software;

 

   

enter into or become bound by, or amend, modify, terminate or waive any contract related to the acquisition or disposition or granting of any license with respect to material intellectual property, other than amendments, modifications, terminations or waivers in the ordinary course of business consistent with past practice, or otherwise encumber any material intellectual property (including by the granting of any covenants, including any covenant not to sue or covenant not to assert), other than (a) nonexclusive licenses of Tableau’s intellectual property entered in the ordinary course of business consistent with past practice and (b) amendments and modifications, in each case, to existing exclusive, limited distribution rights for Tableau products made or entered into in the ordinary course of business consistent with past practice;

 

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(a) enter into certain specified types of material contracts or any other material contract outside of the ordinary course of business consistent with past practice, (b) materially modify, materially amend, extend or terminate any material contract (other than non-renewals occurring in the ordinary course of business), or, other than in the ordinary course of business consistent with past practice, waive, release or assign any material rights or claims thereunder, or (c) materially modify, amend or terminate, or waive or release or assign any material rights under, any material government bid or submit any new government contract bid that would have been a material government bid if submitted prior to the date of the merger agreement;

 

   

except in accordance with Tableau’s capital budget provided to Salesforce prior to the date of the merger agreement, make any capital expenditures, enter into agreements or arrangements providing for capital expenditures or otherwise commit to do so;

 

   

commence, waive, release, assign, compromise or settle any claim, litigation, investigation or proceeding, other than the compromise or settlement of any claim, litigation or proceeding that is not brought by governmental entities and that (a) is for an amount not to exceed, for any such compromise or settlement individually $1,000,000 or in the aggregate, $2,000,000, (b) does not impose any injunctive relief on Tableau or its subsidiaries and does not involve the admission of wrongdoing by Tableau, any of its subsidiaries or any of their respective officers or directors or otherwise establish a materially adverse precedent for similar settlements by Salesforce or any of its subsidiaries and (c) does not provide for the license of any intellectual property or the termination, modification or amendment of any license of Tableau intellectual property;

 

   

make any change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable law;

 

   

amend or modify in any material respect any privacy statement of Tableau or any of its subsidiaries;

 

   

make, change or revoke any material tax election, adopt or change any tax accounting period or material method of tax accounting, amend any material tax return, file any material tax return that is materially inconsistent with a previously filed tax return of the same type for a prior taxable period (taking into account any amendments prior to the date hereof and other than inconsistencies intended to take advantage of changes in law since the date of the previously filed tax return), settle or compromise any material liability for taxes or any tax audit, claim or other proceeding relating to a material amount of taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law), surrender any right to claim a material refund of taxes, or, except extensions in connection with extensions of time obtained in the ordinary course of business consistent with past practice for the filing of tax returns, agree to an extension or waiver of the statute of limitations with respect to a material amount of taxes;

 

   

take any action, or knowingly fail to take any action, which action or failure to act would, or would be reasonably expected to, prevent the offer and the merger, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

   

redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for any indebtedness solely among Tableau and its wholly owned subsidiaries or solely among such wholly owned subsidiaries;

 

   

enter into any transactions or contracts with any affiliate or other person that would be required to be disclosed by Tableau under Item 404 of Regulation S-K of the SEC;

 

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fail to use commercially reasonable efforts to maintain Tableau’s insurance policies or comparable replacement policies with respect to the material assets, operations and activities of Tableau and its subsidiaries;

 

   

(a) acquire any real property or enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), (b) materially modify or amend or exercise any right to renew any Tableau lease, or waive any material term or condition thereof or grant any material consents thereunder, (c) grant or otherwise knowingly create or consent to the creation of any material easement, covenant, restriction, assessment or charge affecting any real property leased by Tableau, or any interest therein or part thereof, (d) knowingly commit any waste or nuisance on any such property or (e) make any material changes in the construction or condition of any such property, in each case of (b) through (e), other than in the ordinary course of business consistent with past practice;

 

   

convene any special meeting (or any adjournment or postponement thereof) of the holders of Tableau common stock;

 

   

terminate or modify or waive in any material respect any right under any material permit;

 

   

adopt or otherwise implement any stockholder rights plan, “poison-pill” or other comparable agreement;

 

   

take or cause to be taken any action that would reasonably be expected to materially impede or prevent the consummation of the transactions contemplated by the merger agreement on or before the outside date; or

 

   

agree or authorize, in writing or otherwise, to take any of the foregoing actions.

Restrictions on Salesforce’s Operations

The merger agreement provides for certain restrictions on Salesforce’s and its subsidiaries’ activities until the earlier of the effective time of the merger or the date (if any) on which the merger agreement is terminated. In general, except as specifically permitted or required by the merger agreement, as required by applicable law or as consented to in writing by Tableau (which consent may not be unreasonably withheld, conditioned or delayed), subject to specified exceptions set forth in the merger agreement, Salesforce must not and must cause its subsidiaries not to, directly or indirectly:

 

   

amend, modify, waive, rescind, change or otherwise restate the organizational documents of Salesforce (whether by merger, consolidation, operation of law or otherwise) in a manner that would materially and adversely affect the holders of Tableau common stock, or adversely affect the holders of Tableau common stock relative to other holders of Salesforce common stock;

 

   

authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, stock or other securities of Salesforce or any of its subsidiaries), except dividends and distributions paid or made in the ordinary course of business by Salesforce or its subsidiaries to Salesforce or any other wholly owned subsidiary of Salesforce;

 

   

split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, except for any such transaction involving only wholly owned subsidiaries of Salesforce;

 

   

liquidate (completely or partially), dissolve or adopt any plan or resolution providing for any of the foregoing, in each case, with respect to Salesforce, Offeror or any direct or indirect parent entity of Offeror;

 

   

acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or publicly announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or a material portion of the assets of any person (or any business

 

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or division thereof) that (i) would require (a) the filing by Salesforce or any of its subsidiaries of a Notification and Report Form pursuant to the HSR Act with respect to such acquisition or (b) any pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany with respect to such acquisition and (ii) would, or would reasonably be expected to, prevent (a) any waiting period (or extensions thereof) applicable to the transactions contemplated by the merger agreement under the HSR Act from expiring or terminating prior to the outside date or (b) Salesforce or Offeror from obtaining, prior to the outside date, any of the required pre-closing approvals, consents, waivers or clearances applicable to the transactions contemplated by the merger agreement under the applicable antitrust laws of Germany;

 

   

take any action, or knowingly fail to take any action, which action or failure to act would, or would be reasonably expected to, prevent the offer and the merger, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

   

take or cause to be taken any action that would reasonably be expected to materially impede or prevent the consummation of the transactions contemplated by the merger agreement on or before the outside date; or

 

   

agree or authorize, in writing or otherwise, to take any of the foregoing actions.

Access

From the date of the merger agreement until the earlier of the effective time of the merger or the date (if any) on which the merger agreement is terminated, to the extent permitted by applicable law, Tableau will give, and will cause each of its subsidiaries to give, Salesforce and its representatives reasonable access during normal business hours and upon reasonable advance notice to Tableau’s offices, properties, contracts, personnel, books and records (so long as such access does not unreasonably interfere with Tableau’s business), and Tableau will use reasonable best efforts, and will cause each of its subsidiaries to use reasonable best efforts, to furnish as promptly as practicable to Salesforce all information concerning Tableau’s business, properties, offices, contracts and personnel as Salesforce reasonably requests. However, Tableau is not required to provide access to or disclose information that may not be disclosed pursuant to contractual or legal restrictions, that is subject to attorney-client, attorney work product or other legal privilege, or in the good faith judgement of the Tableau, would violate applicable law, provided that Tableau will use commercially reasonable efforts to make alternative arrangements for disclosure that do not violate such restrictions or privileges.

Tax Matters

The merger agreement provides that none of the parties shall (and each party shall cause its respective subsidiaries not to) knowingly take any action (or knowingly fail to take any reasonable action) which action (or failure to act) would reasonably be expected to prevent or impede the offer and the merger, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code. The merger agreement provides that the parties intend to report and, except to the extent otherwise required by a determination as such term is used in Section 1313 of the Code, shall report, for U.S. federal income tax purposes, the offer and the merger, taken together, as a “reorganization” within the meaning of Section 368(a) of the Code. Each of the parties agree to cooperate in good faith and use their reasonable best efforts to deliver to Salesforce’s and Tableau’s tax counsel and tax advisors a certificate signed by an officer of Salesforce (and the Offeror) or Tableau, as applicable, containing representations reasonably satisfactory to such counsel or advisors in connection with the rendering of any tax opinions to be issued by such counsel or advisors with respect to the treatment of the offer and the merger, taken together, as a reorganization within the meaning of Section 368(a) of the Code, and Salesforce’s and Tableau’s tax counsel and tax advisors shall be entitled to rely upon such representations in rendering any such opinions.

 

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Additional Agreements

Under the merger agreement, Salesforce and Tableau are required to use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the merger agreement as soon as practicable, including:

 

   

preparing and filing or otherwise providing, in consultation with the other party and as promptly as practicable and advisable, all documentation to effect all necessary applications, notices, petitions, filings, and other documents and to obtain as promptly as reasonably practicable all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any governmental entity in order to consummate the transactions contemplated by the merger agreement; and

 

   

taking all steps as may be necessary, subject to the limitations in the merger agreement, to obtain all such waiting period expirations or terminations, consents, clearances, waivers, licenses, registrations, permits, authorizations, orders and approvals.

Further, Salesforce and Tableau each agree to:

 

   

make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by the merger agreement as promptly as practicable, and in any event within 10 business days after the date of the merger agreement (unless a later date is mutually agreed between the parties), and to supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as reasonably practicable; and

 

   

make all other necessary filings as promptly as reasonably practicable, and supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested under any other applicable antitrust laws.

Notwithstanding the foregoing, none of Salesforce, the Offeror or any of their respective subsidiaries is required to, and Tableau may not and may not permit any of its subsidiaries to, without the prior written consent of Salesforce, become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (1) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of Tableau, the surviving company, Salesforce or any of their respective subsidiaries, (2) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of Tableau, the surviving company, Salesforce or any of their respective subsidiaries or (3) impose any restriction, requirement or limitation on the operation of the business or portion of the business of Tableau, the surviving company, Salesforce or any of their respective subsidiaries. However, if requested by Salesforce, Tableau or its subsidiaries will become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on Tableau or its subsidiaries in the event the merger is completed.

Under the merger agreement, in connection with obtaining all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations for the transactions under the HSR Act or any other antitrust laws, Salesforce and Tableau also agree to:

 

   

cooperate in all respects and consult with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party;

 

   

promptly inform the other party of any communication with the DOJ, the FTC or any other governmental entity, by promptly providing copies to the other party of any such written

 

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communications, and of any communication received or given in connection with any proceeding by a private party; and

 

   

permit the other party to review in advance any communication that it gives to, and consult with each other in advance of any meeting, substantive telephone call or conference with, the DOJ, the FTC or any other applicable governmental entity, or, in connection with any proceeding by a private party, with any other person, and to the extent permitted by the DOJ, the FTC or other applicable governmental entity or other person, give the other party the opportunity to attend and participate in any in-person meetings, substantive telephone calls or conferences with the DOJ, the FTC or any other governmental entity or other person.

Treatment of Tableau Equity Awards

Consideration for Tableau Options in the Merger—Generally

At the effective time, each Tableau option that is outstanding and unexercised immediately prior to the effective time (whether vested or unvested) held by any former employee of Tableau will be cancelled and converted into the right to receive the transaction consideration in respect of each “net share” covered by such Tableau option, where “net share” means the quotient obtained by dividing (a) the product of (i) the excess, if any, of the “per share cash equivalent consideration” (as defined below) over the per share exercise price applicable to the Tableau option, multiplied by (ii) the number of Tableau shares subject to the Tableau option immediately prior to the effective time, by (b) the per share cash equivalent consideration, less applicable tax withholdings. As used in the offer, the “per share cash equivalent consideration” means the product (rounded to the nearest cent) obtained by multiplying (i) the exchange ratio by (ii) the Salesforce trading price. 

At the effective time, each Tableau option that is outstanding and unexercised immediately prior to the effective time not held by a former employee of Tableau will be assumed and automatically converted into an option to purchase the number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau option immediately prior to the effective time by the exchange ratio (each, an “adjusted option”). Each adjusted option will have an exercise price per share of Salesforce common stock (rounded up to the nearest whole cent) determined by dividing the per share exercise price of the Tableau option by the exchange ratio and will otherwise be subject to the same terms and conditions that were applicable to such Tableau option prior to the effective time.

Consideration for Tableau Restricted Stock Units and Performance Share Units in the Merger—Generally

At the effective time, each Tableau RSU award that is outstanding immediately prior to the effective time held by a non-employee director of Tableau will vest as of the effective time and will be cancelled and converted into the right to receive the transaction consideration in respect of each share of Tableau common stock subject to such Tableau RSU award.

At the effective time, each Tableau RSU award that is outstanding immediately prior to the effective time not held by a non-employee director of Tableau will be assumed and automatically converted into a restricted stock unit, on the same terms and conditions that were applicable to such Tableau RSU award prior to the effective time, with respect to a number of shares of Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau RSU award by the exchange ratio (each, a “converted RSU award”). Each converted RSU award will be subject to the same terms and conditions as were applicable to such Tableau RSU award prior to the effective time.

At the effective time, each Tableau PSU award that is outstanding immediately prior to the effective time will be assumed and automatically converted into a converted RSU award with respect to a number of shares of

 

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Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau PSU award by the exchange ratio; provided that the number of shares of Tableau common stock subject to a Tableau PSU award will equal the number of shares Tableau common stock that would have vested based on the achievement of performance at target levels. Each converted RSU award will be subject to the same terms and conditions as were applicable to such Tableau PSU award prior to the effective time, except that such converted RSU award will vest after the effective time solely based on continued service to Salesforce and its affiliates, subject to any accelerated vesting provisions applicable to such converted RSU award.

Tableau Employee Stock Purchase Plan

Pursuant to the merger agreement, as soon as practicable following the date of the merger agreement, Tableau shall take all actions with respect to the ESPP that are necessary to provide that: (i) with respect to the current ESPP offering periods, no Tableau employee who is not a participant in the ESPP as of the date of the merger agreement may become a participant in the ESPP and no current participant may increase the percentage amount of such participant’s payroll deduction election from that in effect on the date of the merger agreement for such current ESPP offering periods; (ii) subject to the consummation of the merger, the ESPP shall terminate effective immediately prior to the effective time; (iii) if the current ESPP offering periods terminate prior to the effective time, then the ESPP shall be suspended and no new offering period shall be commenced under the ESPP prior to the termination of this Agreement; and (iv) if any current ESPP offering period is still in effect at the effective time, then the last day of such current ESPP offering period shall be accelerated to a date prior to the closing date of the merger.

Registration of Salesforce Common Stock

Pursuant to the merger agreement, as soon as reasonably practicable after the effective time, Salesforce will file one or more appropriate registration statements with the SEC (on Form S-3 or Form S-8, or any successor or other appropriate forms) relating to the shares of Salesforce common stock issuable with respect to the adjusted options and converted RSU awards. Salesforce will use commercially reasonable efforts to maintain the effectiveness of such registration statement or statements for so long as any adjusted options and converted RSU awards remain outstanding and will reserve a sufficient number of shares of Salesforce common stock for issuance upon exercise or settlement thereof.

Employee Matters

Under the merger agreement, Salesforce will assume, honor and fulfill all of Tableau’s benefit plans in accordance with their terms as in effect immediately prior to the date of the merger agreement or as subsequently amended or terminated as permitted pursuant to the terms of such Tableau benefit plans and the merger agreement.

For a period of twelve months following the effective time, Salesforce has agreed to, with respect to each employee of Tableau who becomes an employee of Salesforce or its subsidiaries as of the effective time (which we refer to as the “continuing employees”), (a) maintain at least the same wage rate or base salary of each continuing employee and (b) provide employee benefits (including cash bonus opportunities, retirement, health and welfare benefits, but excluding equity compensation) that are, in the aggregate, in Salesforce’s discretion, either no less favorable to such continuing employee than (i) those in effect for such continuing employee immediately prior to the effective time or (ii) those in effect for similarly situated employees of Salesforce and its subsidiaries.

Salesforce also has agreed under the merger agreement to recognize years of service with Tableau or its subsidiaries under all employee benefit plans maintained by Salesforce or its affiliates for the benefit of continuing employees, except to the extent that any such recognition would result in a duplication of benefits,

 

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and to waive certain participation restrictions for continuing employees who become eligible to participate in Salesforce welfare plans. Tableau will terminate its 401(k) plan(s) as of the day immediately preceding the effective time if Salesforce provides timely, written notice requesting such termination in accordance with the merger agreement.

Directors’ and Officers’ Indemnification and Insurance

Under the merger agreement, for six years after the effective time, Salesforce must, or must cause the surviving corporation in the merger to, indemnify and hold harmless, to the fullest extent permitted under applicable law and the organizational documents of Tableau or its subsidiaries, or any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce, each current and former director and executive officer of Tableau and its subsidiaries (which we refer to as the “indemnified parties”) against any costs and expenses (including advancing attorneys’ fees and expenses) in connection with any actual or threatened claims in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time of the merger, whether asserted or claimed prior to, at or after the effective time of the merger, in connection with such person serving as an executive officer, director, employee or other fiduciary of Tableau, any of its subsidiaries or any other person if such service was at the request or for the benefit of Tableau or any of its subsidiaries.

In addition, for a period of six years following the effective time, Salesforce is required to maintain in effect the provisions in the organizational documents of Tableau and any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce (except to the extent such agreement provides for an earlier termination) regarding elimination of liability, indemnification of executive officers, directors and employees and advancement of expenses that are in existence as of the date of the merger agreement.

At or prior to the effective time, Tableau is required to purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the effective time with respect to matters arising at or prior to the effective time, with a one-time cost not in excess of 300% of the last aggregate annual premium paid by Tableau for its directors’ and officers’ liability insurance and fiduciary liability insurance prior to the date of the merger agreement, and if the cost of such “tail” insurance policy would otherwise exceed such amount, Tableau may purchase as much coverage as reasonably practicable for such amount.

Termination of the Merger Agreement

Termination by Salesforce or Tableau

The merger agreement may be terminated at any time before the acceptance time:

 

   

by mutual written consent of Salesforce and Tableau; or

 

   

by either Salesforce or Tableau, if:

 

   

any governmental entity of competent jurisdiction has issued a final, non-appealable order, injunction, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the merger agreement;

 

   

the offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Salesforce or the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer; except that this right to terminate the merger agreement will not be available to Salesforce if Salesforce or the Offeror has failed to comply in any material respect with its obligations under the merger agreement related to the extension of the offer or the acceptance of Tableau shares and this right to terminate the merger agreement will not be available to Tableau if Tableau or has failed to comply

 

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in any material respect with its obligations under the merger agreement related to offering documents or its obligations described under “—No Solicitation of Other Offers by Tableau” or “—Change of Recommendation; Match Rights”; or

 

   

the acceptance time has not occurred by on or before October 9, 2019 (which we refer to as the “outside date”), except that (a) if on the outside date all of the conditions to the offer, other than certain conditions related to clearances under the HSR Act and those conditions to the offer that by their nature are to be satisfied at the expiration of the offer (if such conditions (other than the minimum tender condition) would be satisfied or validly waived were the expiration of the offer to occur at such time), have been satisfied or waived, then the outside date will automatically be extended to January 9, 2020 and (b) this right to terminate the merger agreement will not be available to any party whose action or failure to fulfill any obligation under the merger agreement has been a proximate cause of, or directly resulted in, the failure of the transactions to be consummated by the outside date and such action or failure to act constitutes a material breach of the merger agreement.

Termination by Tableau

The merger agreement may be terminated at any time before the acceptance time by Tableau if:

 

   

the Tableau board of directors effects a change of recommendation and Tableau concurrently enters into a definitive agreement providing for a superior proposal, as long as (1) Tableau has complied in all material respects with its obligations to provide notice and negotiate with Salesforce regarding amendments to the merger agreement, as described under “—Change of Recommendation; Match Rights” and (2) concurrently with or prior to (and as a condition to) such termination, Tableau pays to Salesforce the $552 million termination fee described below; or

 

   

(1) Salesforce or the Offeror has breached, failed to perform or violated their respective covenants or agreements under the merger agreement, which breach, failure to perform or violation would reasonably be expected to have a material adverse effect on Salesforce, or any of the representations and warranties of Salesforce or the Offeror in the merger agreement have become inaccurate and such inaccuracy would reasonably be expected to have a material adverse effect on Salesforce; (2) such breach, failure to perform, violation or inaccuracy is incapable of being cured by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside date and the 30th calendar day following receipt of written notice from Tableau of such breach, failure to perform, violation or inaccuracy; and (3) Tableau is not then in material breach of the merger agreement such that the related conditions to the offer would not then be satisfied if the expiration date of the offer (including any extensions pursuant to the merger agreement) were the date of termination of the merger agreement.

Termination by Salesforce

The merger agreement may be terminated at any time before the acceptance time by Salesforce if:

 

   

the Tableau board of directors has effected a change of recommendation or Tableau has materially breached its obligations described under “—No Solicitation of Other Offers by Tableau” or “—Change of Recommendation; Match Rights”; or

 

   

(1) Tableau has breached, failed to perform or violated its covenants or agreements under the merger agreement or any of the representations and warranties of Tableau in the merger agreement have become inaccurate, in either case in a manner that would give rise to the right of Salesforce and the Offeror not to accept for payment and pay for any shares of Tableau common stock pursuant to the failure of any of the conditions to the consummation of the offer related to Tableau’s compliance with its covenants and agreements or the accuracy of Tableau’s representations and warranties; (2) such

 

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breach, failure to perform, violation or inaccuracy is incapable of being cured by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside date and the 30th calendar day following receipt of written notice from Salesforce of such breach, failure to perform, violation or inaccuracy; and (3) neither Salesforce nor the Offeror is then in material breach of the merger agreement such that Tableau would have the right to terminate the merger agreement as a result of such material breach.

Termination Fee and Expenses

Expenses

Except as otherwise expressly provided in the merger agreement, all costs and expenses incurred in connection with the merger agreement, the offer, the merger and the other transactions contemplated thereby will be paid by the party incurring the cost or expense.

Termination Fee

The merger agreement provides that Tableau will pay Salesforce a termination fee of $552 million if:

 

   

(1)(a) Salesforce terminates the merger agreement as a result of the offer expiring or the acceptance time having not occurred on or before the outside date, (b) Tableau terminates the merger agreement as a result of the offer expiring or the acceptance time having not occurred on or before the outside date at a time when Salesforce would be permitted to terminate the merger agreement for the same reason or (c) Salesforce terminates the merger agreement as a result of breach, failure to perform or violation of the merger agreement by Tableau that (except for a breach of Tableau’s non-solicitation obligations) first occurred following the making of an acquisition proposal of the type described in (2); (2) after the date of the merger agreement and prior to the date of the termination, a bona fide acquisition proposal has been publicly disclosed or otherwise made known to the Tableau board of directors or management and in each case is not withdrawn (publicly, if publicly disclosed) at least three business days prior to the earlier of the expiration date of the offer and such termination; and (3) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement providing for an acquisition proposal is entered into;

 

   

(1) Salesforce terminates the merger agreement because the Tableau board of directors has effected a change of recommendation or Tableau has willfully and materially breached its obligations described under “—No Solicitation of Other Offers by Tableau” or “—Change of Recommendation; Match Rights” or (2) Tableau terminates the merger agreement because the offer expired or the acceptance time has not occurred on or before the outside date, at a time when Salesforce would be permitted to terminate the merger agreement for the same reason or because the Tableau board of directors has effected a change of recommendation or Tableau has willfully and materially breached its obligations described under “—No Solicitation of Other Offers by Tableau” or “—Change of Recommendation; Match Rights”; or

 

   

Tableau terminates the merger agreement in order to enter into a definitive agreement providing for a superior proposal.

In no event will Tableau be obligated to pay the termination fee on more than one occasion. In the event that the termination fee is received by Salesforce, none of Tableau, any of its subsidiaries, any of their respective former, current or future officers, directors, partners, stockholders, managers, members, affiliates or agents will have any further liability or obligation relating to or arising out of the merger agreement or the transactions contemplated by the merger agreement, except for fraud or willful breach of the merger agreement occurring prior to the termination of the merger agreement.

 

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Effect of Termination

In the event of termination of the merger agreement in accordance with its terms, the merger agreement will become null and void (except that provisions relating to the effect of termination, payment of the termination fee and certain other miscellaneous provisions, together with the confidentiality agreement between Tableau and Salesforce, will survive any such termination), and there will be no liability on the part of any of the parties, provided that no party will be relieved of liability for any fraud or willful breach of the merger agreement prior to such termination. For purposes of the merger agreement, “willful breach” means an action or omission taken or omitted to be taken that the breaching party intentionally takes (or fails to take) and actually knows would, or would reasonably be expected to, be or cause a material breach of the merger agreement, and “fraud” means common law fraud that is committed with actual knowledge of falsity and with the intent to deceive or mislead another.

Amendments, Enforcements and Remedies, Extensions and Waivers

Amendments

The merger agreement may be amended by written agreement of each of the parties at any time.

Enforcements and Remedies

Under the merger agreement, the parties have agreed that each party will be entitled to:

 

   

an injunction or injunctions to prevent or remedy any breaches or threatened breaches of the merger agreement;

 

   

a decree or order of specific performance specifically enforcing the terms and provisions of the merger agreement; and

 

   

any further equitable relief, in each case, in addition to any other remedy to which a party is entitled to at law or in equity.

Extensions and Waivers

Under the merger agreement, at any time prior to the effective time of the merger, any party may:

 

   

extend the time for the performance of any of the obligations or other acts of the other parties;

 

   

waive any inaccuracies in the representations and warranties of the other parties; and

 

   

waive compliance by the other parties with any of the agreements or conditions for the benefit of such party.

 

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