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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
TIBCO SOFTWARE INC.
(Exact Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed per Exchange Act Rules 14a-6(i)(4) and 0-11.
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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TIBCO Software Inc.
3165 Porter Drive
Palo Alto, CA 94304
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 24, 2000
TO THE STOCKHOLDERS OF TIBCO SOFTWARE INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of TIBCO
Software Inc., a Delaware corporation (the "Company"), will be held on January
24, 2000 at 2:00 p.m. local time at the Company's headquarters located at 3165
Porter Drive, Palo Alto, California, for the following purposes as more fully
described in the Proxy Statement accompanying this Notice:
1. To approve the amendment of the Company's 1996 Stock Option Plan to (a)
increase the number of shares reserved for issuance thereunder by
3,822,514 shares and (b) modify the provisions relating to the annual
increase in the number of shares reserved for issuance thereunder such
that the annual increase will be equal to the lesser of (i) 20,000,000
shares or (ii) 5% of the outstanding shares on such date.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
Information relating to the proposed amendment of the Company's 1996 Stock
Option Plan is set forth in the discussion of Proposal 1 contained in the
attached Proxy Statement. The Board of Directors has fixed the close of
business on December 15, 1999 as the record date for the determination of
stockholders entitled to notice of and to vote at this Special Meeting and at
any adjournment or postponement thereof. Approval of Proposal 1, the proposed
amendment of the 1996 Stock Option Plan, requires the affirmative vote of the
holders of a majority of the shares of the Company's common stock present in
person or represented by proxy at the Special Meeting and entitled to vote on
Proposal 1.
By Order of the Board of Directors
/s/ Robert P. Stefanski
_____________________________________
Robert P. Stefanski
Secretary
Palo Alto, California
January , 2000
All stockholders are cordially invited to attend this meeting in person.
Whether or not you expect to attend this meeting, please take the time to vote
your proxy. YOUR VOTE IS IMPORTANT. Instructions for voting by mail or by
other means are contained on the reverse of this letter.
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YOUR VOTE IS IMPORTANT
Stockholders of record or "registered stockholders" can vote in one of two
ways:
1) By Mail: Mark your vote, date, sign and return the enclosed proxy in the
postage-paid return envelope provided.
2) By Televote: You may vote your proxy by using a touch-tone telephone.
Dial the toll-free number printed on your proxy card and have your
assigned control number at hand for verification.
If your shares are held in "street" name, that is in the custody of a
financial institution or other holder of record, your vote is controlled by
that institution or holder. Some institutions may offer telephone voting in
addition to returning the proxy card by mail. Specific instructions are
printed directly on your proxy card.
Even if you have given your proxy, you still may vote in person if you
attend the meeting. Please note, however, that if your shares are held
beneficially through a broker, bank or other nominee and you wish to vote at
the meeting, you must obtain from the record holder a proxy issued in your
name.
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TIBCO Software Inc.
3165 Porter Drive
Palo Alto, CA 94304
----------------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of TIBCO
Software Inc., a Delaware corporation (the "Company"), for use at the Special
Meeting of Stockholders to be held on January 24, 2000, at 2:00 p.m. local
time (the "Special Meeting"), or at any adjournment or postponement thereof,
for the purposes set forth herein and in the accompanying Notice of Special
Meeting. The Special Meeting will be held at the Company's headquarters
located at 3165 Porter Drive, Palo Alto, California. The Company intends to
mail this proxy statement and accompanying proxy card on or about January 12,
2000 to all stockholders entitled to vote at the Special Meeting.
Stockholders Entitled to Vote
Stockholders of record at the close of business on December 15, 1999 are
entitled to notice of and to vote at the Special Meeting. At the close of
business on December 15, 1999, the Company had outstanding and entitled to
vote 60,409,342 shares of common stock, each of which is entitled to one vote
on each matter to be voted upon at the Special Meeting.
Votes Required for Approval
The presence, in person or by proxy, of at least a majority of the shares
outstanding on the record date, December 15, 1999, is necessary to attain a
quorum. All votes will be tabulated by the inspector of elections appointed
for the Special Meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes. Broker non-votes occur when a
nominee, such as a financial institution, returns a proxy, but does not have
the authorization from the beneficial owner to vote the owner's shares on a
particular proposal because the nominee did not receive voting instructions
(via proxy vote) from the beneficial owner. Broker non-votes and abstentions
are counted toward a quorum. Because broker non-votes and abstentions are
included in the calculation of shares entitled to vote, they have the same
effect as negative votes. The following votes are required to approve each
item of business at the meeting:
. Amendment of 1996 Stock Option Plan: Approval of Proposal 1, the
amendment of the Company's 1996 Stock Option Plan to (a) increase the
number of shares reserved for issuance thereunder by 3,822,514 shares and
(b) modify the provisions relating to the annual increase in the number
of shares reserved for issuance thereunder such that the annual increase
will be equal to the lesser of (i) 20,000,000 shares or (ii) 5% of the
outstanding shares on such date, requires the affirmative vote of the
holders of a majority of the shares of the Company's common stock present
in person and represented by proxy at the Special Meeting and entitled to
vote on Proposal 1.
. Other Items: A majority of votes cast at the meeting, in person or by
proxy, is required for approval of other items of business.
How to Vote Your Shares
YOUR VOTE IS IMPORTANT. Your shares can be voted at the special meeting only
if you are present in person or represented by proxy. Whether or not you
expect to attend the meeting, please take the time to vote your proxy.
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Stockholders of record or "registered stockholders" can vote in one of two
ways:
. By Mail: Mark your vote, date, sign and return the enclosed proxy in the
postage-paid return envelope provided.
. By Televote: You may vote your proxy by using a touch-tone telephone.
Dial the toll-free number printed on your proxy card and have your
assigned control number at hand for verification.
If your shares are held beneficially in "street" name through a nominee such
as a financial institution or other holder of record, your vote may also be
cast by telephone as well as by mail if your financial institution offers such
voting alternatives. Please follow the specific instructions provided by your
nominee on your proxy card.
Even if you have given your proxy, you still may vote in person if you
attend the meeting. Please note, however, that if your shares are held
beneficially through a broker, bank or other nominee and you wish to vote at
the meeting, you must obtain from the record holder a proxy issued in your
name.
Solicitation
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of common stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of common stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid to directors, officers or
other regular employees for such services.
Stockholder Proposals
In order to be included in the proxy materials relating to the Company's
2000 Annual Meeting of Stockholders, proposals that stockholders intend to
present at the meeting must be received by the Company a reasonable time
before the Company begins to print and mail its proxy materials, which the
Company currently estimates will be on or around March 12, 2000. Stockholder
proposals received by the Company after that time will be considered untimely.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. A proxy may be revoked by filing
with the Secretary of the Company at the Company's principal executive office,
3165 Porter Drive, Palo Alto, California 94304, a written notice of revocation
or a duly executed proxy bearing a later date, or it may be revoked by
attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
Dissenters Rights
There are no dissenters' rights associated with the amendment of the 1996
Stock Option Plan contemplated in Proposal 1.
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PROPOSAL NO. 1
AMENDMENT OF 1996 STOCK OPTION PLAN
General
The Company's 1996 Stock Option Plan was adopted by the Board of Directors
and approved by the Company's stockholders and provides for the granting to
employees (including officers and employee directors) of the Company of
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), for the granting to employees
and consultants of the Company of nonstatutory stock options and for the
participation of eligible employees in a salary deferral employee stock
purchase program, or "ESPP," intended to qualify under Section 423 of the
Code. A total of 17,339,991 shares, plus an annual increase equal to the
lesser of (i) 5,000,000 shares or (ii) 3.5% of the outstanding shares on such
date, or a lesser amount determined by the board, are reserved for issuance
under the Plan. As of December 1, 1999, a total of 1,884,697 shares remained
available for future option grant and purchase pursuant to the ESPP.
Proposal
In December 1999, the Board of Directors adopted, subject to stockholder
approval, an amendment to the 1996 Stock Option Plan (a) increasing the number
of shares reserved for issuance thereunder by 3,822,514 shares, for an
aggregate of 21,162,505 shares (plus annual increases as described below), (b)
modifying the provisions relating to the annual increase in the number of
shares reserved for issuance thereunder such that the annual increase will be
equal to the lesser of (i) 20,000,000 shares or (ii) 5% of the outstanding
shares on such date. This amendment will enable the Company to continue to
grant options to eligible employees and consultants under the terms and
conditions of the 1996 Stock Option Plan. All of the share numbers in Proposal
1 will be proportionately adjusted for any increase or decrease in the number
of issued shares of common stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock or
other similar event that occurs between the date of this Proxy Statement and
the date of the Special Meeting.
The Company is experiencing a period of rapid growth, and must continue to
recruit, retain and motivate highly skilled management, sales, marketing and
engineering personnel in order to remain competitive. Competition for these
people in the Internet, eBusiness and software industries is intense. The
Board of Directors believes that the approval of the amendment to the 1996
Stock Option Plan is in the best interests of the Company and its
stockholders, as the availability of an adequate number of shares for issuance
under the 1996 Stock Option Plan and the ability to grant stock options are
important factors in attracting, motivating and retaining the highly skilled
personnel that are essential to the Company's success.
Required Vote
The affirmative vote of the holders of a majority of the common stock
present in person or represented by proxy and entitled to vote on the subject
matter is required to approve the amendment to the 1996 Stock Option Plan.
Recommendation: The Board of Directors recommends that the stockholders
vote "FOR" the proposed amendment to the 1996 Stock Option Plan.
Summary of the 1996 Stock Option Plan
The following summary of the 1996 Stock Option Plan is qualified in its
entirety by the specific language of the 1996 Stock Option Plan, a copy of
which is available to any stockholder upon written request to the Secretary of
the Company.
Purpose. The purposes of the 1996 Stock Option Plan are to attract and
retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to employees and consultants
of the Company and to promote the success of the Company's business.
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Administration. The 1996 Stock Option Plan may be administered by one or
more compensation committees of the Board of Directors (the "Administrator"),
which committees may be constituted to comply with Section 162(m) of the Code,
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and other applicable laws. Subject to the other provisions of
the 1996 Stock Option Plan, the Administrator has the power to determine the
employees and consultants to whom options may be granted, the number of shares
subject to the option and the exercisability thereof. The Administrator also
has the power to reprice options if the exercise price of outstanding options
exceeds the fair market value of the Company's common stock.
Eligibility and Limitations Applicable to Stock Option Awards. The 1996
Stock Option Plan provides that nonstatutory stock options may be granted to
employees and consultants. Incentive stock options may be granted only to
employees. An optionee who has been granted and option may, if he or she is
otherwise eligible, be granted additional options.
Section 162(m) of the Code limits the deductibility of compensation paid to
certain executive officers of the Company. To maximize the Company's deduction
attributable to options granted to such persons, the 1996 Stock Option Plan
provides that no individual may be granted, in any fiscal year, options to
purchase more than 1,500,000 shares of common stock. However, in connection
with an individual's initial employment with us, such individual may be
granted an option covering an additional 1,500,000 shares.
Eligibility and Limitations Applicable to Participation in the ESPP. The
ESPP under the 1996 Stock Option Plan provides that employees are eligible to
participate if they are customarily employed by the Company or any designated
subsidiary for at least 20 hours per week and for more than five months in any
calendar year.
Terms and Conditions of Options. Each option granted under the 1996 Stock
Option Plan is evidenced by a written stock option agreement between the
optionee and the Company and is subject to the following terms and conditions:
(a) Exercise Price. The Administrator determines the exercise price of
options to purchase shares of common stock at the time the options are
granted. However, the exercise price of an incentive stock option must not
be less than 100% (110% if issued to any person possessing more than 10% of
the voting power of all classes of stock of the Company (a "10%
Stockholder")) of the fair market value of the common stock on the date the
option is granted. For so long as the Company's common stock is traded on
the Nasdaq National Market, the fair market value of a share of common
stock will be the closing sales price for such stock (or the closing bid if
no sales were reported) on the date of grant as quoted on such system.
(b) Exercise of the Option. Each stock option agreement will specify the
term of the option and the date when the option is to become exercisable.
The terms of such vesting are to be determined by the Administrator.
Options granted under the 1996 Stock Option Plan to date generally become
exercisable over four years at a rate of one-fourth of the shares subject
to the options at the end of one year from the date of grant and 1/48th at
the end of each month thereafter. In the event of a change of control of
the Company, the vesting schedule of options granted under the 1996 Stock
Option Plan is generally replaced, both retroactively and prospectively,
with a vesting schedule of one-third at the end of one year from the date
of grant and 1/36th at the end of each month thereafter. An option is
exercised by giving written notice of exercise to the Company, specifying
the number of full shares of common stock to be purchased and by tendering
full payment of the purchase price to the Company.
(c) Form of Consideration. The consideration to be paid for the shares of
common stock issued upon exercise of an option shall be determined by the
Administrator and is set forth in the stock option agreement. Such form of
consideration may vary for each option, and may consist entirely of cash,
check, promissory note, other shares of the Company's common stock, any
combination thereof or any other legally permissible form of consideration
as may be provided in the stock option agreement.
(d) Termination of Employment. In the event an optionee's continuous
status as an employee or consultant terminates for any reason (other than
upon the optionee's death or disability), the optionee may
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exercise his or her option within such period of time as is specified in
such optionee's stock option agreement but only to the extent that the
optionee was entitled to exercise the option at the date of such
termination (but in no event later than the expiration of the term of such
option as set forth in the stock option agreement). Options granted under
the 1996 Stock Option Plan to date have generally provided that optionees
may exercise their options within three months from the date of termination
of employment (other than for death or disability).
(e) Disability. In the event an optionee's continuous status as an
employee or consultant terminates as a result of permanent and total
disability (as defined in Section 22(e)(3) of the Code), the optionee may
exercise his or her option, but only within twelve months from the date of
such termination, and only to the extent that the optionee was entitled to
exercise it at the date of such termination (but in no event later than the
expiration of the term of such option as set forth in the stock option
agreement).
(f) Death. In the event of an optionee's death, the optionee's estate or
a person who acquired the right to exercise the deceased optionee's option
by bequest or inheritance may exercise the option, but only within twelve
months following the date of death, and only to the extent that the
optionee was entitled to exercise it at the date of death (but in no event
later than the expiration of the term of such option as set forth in the
stock option agreement).
(g) Term of Options. The term of each option is the term stated in the
stock option agreement; provided, however, that the term may not exceed ten
years from the date of grant. In the case of an incentive stock option
granted to a 10% Stockholder, the term may not exceed five years from the
date of grant. No option may be exercised by any person after the
expiration of its term.
(h) Nontransferability of Options. An option is nontransferable by the
optionee, other than by will or the laws of descent and distribution, and
is exercisable during the optionee's lifetime only by the optionee. In the
event of the optionee's death, options may be exercised by a person who
acquires the right to exercise the option by bequest or inheritance.
(i) Value Limitation. If the aggregate fair market value (as determined
on date of grant) of all shares of common stock subject to an optionee's
incentive stock option which are exercisable for the first time during any
calendar year exceeds $100,000, the excess options shall be treated as
nonstatutory options.
(j) Other Provisions. The stock option agreement may contain such other
terms, provisions and conditions not inconsistent with the 1996 Stock
Option Plan as may be determined by the Administrator.
Terms and Conditions of Participation in the ESPP. Participation in the ESPP
under the 1996 Stock Option Plan is evidenced by a written subscription
agreement between the employee and the Company and is subject to the following
terms and conditions of the 1996 Stock Option Plan:
(a) Purchase Price and Method. Employees who participate in the ESPP
purchase the Company's common stock through payroll deductions of up to 10%
of their base salary, subject to the limits set forth below. The price of
common stock purchased under the ESPP is 85% of the lower of the fair
market value of the common stock on the first day of each 24-month offering
period and the last day of the applicable six-month purchase period. To the
extent the fair market value of the common stock on any exercise date in an
offering period is lower than the fair market value of the common stock on
the first day of the offering period, then all participants in such
offering period will be automatically withdrawn from such offering period
immediately after the exercise of their options on such exercise date and
automatically re-enrolled in the immediately following offering period as
of the first day thereof.
(b) Limits on Participation. No employee may participate in the ESPP to
the extent that (i) immediately after the grant, such employee would own
capital stock of the Company and/or hold outstanding options to purchase
such stock possessing 5% or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any of its
subsidiaries, or (ii) his or her rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries accrues
at a rate which exceeds $25,000 worth of stock (determined at the fair
market value of the shares at the time he
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or she begins participation in the ESPP) for each calendar year in which
such employee participates in the ESPP at any time.
(c) Offering Period. Offering periods last 24 months and commence on the
first trading day on or after January 1 and July 1 of each year and
terminate on the last trading day in the periods ending 24 months later.
Each 24-month offering period consists of four purchase periods of
approximately six months duration. The first offering period, however,
commenced on July 13, 1999, the date on which the Company's registration
statement on Form S-1 was declared effective, and will end on the last
trading day on or before June 30, 2001.
(d) Withdrawal; Termination of Employment. If an employee decides to
terminate his or her participation in the ESPP, all the payroll deductions
credited to his or her purchase account will be returned to him or her.
Upon the termination of employment for any reason, all payroll deductions
will likewise be returned.
(e) Death. A participating employee may designate who is to receive any
shares and cash, if any, from the participant's account under the ESPP in
the event of such participant's death subsequent to exercising a purchase
option but prior to delivery of the share of common stock.
(f) Nontransferability. Rights granted under the ESPP are not
transferable by a participant other than by will, the laws of descent and
distribution, or as otherwise provided under the plan, and the Company may
treat any prohibited attempt to transfer as an election to withdraw.
(g) Other Provisions. The subscription agreement may contain such other
terms, provisions and conditions not inconsistent with the 1996 Stock
Option Plan as may be determined by the Administrator.
Adjustment Upon Changes in Capitalization. In the event of changes in the
outstanding common stock of the Company by reason of any stock splits, reverse
stock splits, stock dividends, combinations, reclassifications or other
similar change in the capital structure of the Company, an appropriate
adjustment shall be made by the Administrator in the following: (i) the number
of shares of common stock subject to the 1996 Stock Option Plan, (ii) the
number and class of shares of stock subject to any option outstanding under
the 1996 Stock Option Plan, (iii) and the exercise price of any such
outstanding option. The determination of the Administrator as to which
adjustments shall be made shall be conclusive.
Corporate Transactions.
(a) Options. In the event of a proposed dissolution or liquidation of the
Company, the Board will notify the holders of options as soon as
practicable prior to such action, and all outstanding options will
terminate immediately prior to the consummation of such proposed action.
Notwithstanding the above, in the event of a merger of the Company with or
into another corporation or the sale of substantially all of the assets of
the Company, the 1996 Stock Option Plan requires that each outstanding
option be assumed or an equivalent option be substituted by the successor
corporation; provided, however, if such successor or purchaser refuses to
assume or substitute the then outstanding options, the 1996 Stock Option
Plan provides for the full acceleration of the exercisability of all
outstanding options for a period of ten days from the date of notice of
acceleration to the holder and all options will terminate upon the
expiration of such period.
(b) ESPP. In the event of a proposed dissolution or liquidation of the
Company, the purchase periods then in progress will be shortened by setting
a new exercise date and all offering periods then in progress will
terminate immediately prior to the consummation of such proposed action. In
the event of a merger of the Company with or into another corporation or
the sale of substantially all of the assets of the Company, the 1996 Stock
Option Plan requires that each outstanding right be assumed or an
equivalent right be substituted by the successor corporation; provided,
however, if such successor or purchaser refuses to assume or substitute the
then outstanding rights, the 1996 Stock Option Plan provides that the
purchase periods then in progress will be shortened by setting a new
exercise date and that all offering periods then in progress will terminate
immediately prior to the consummation of such proposed action.
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Amendment and Termination of the 1996 Stock Option Plan. The Administrator
may at any time amend, alter, suspend or terminate the 1996 Stock Option Plan.
The Company shall obtain stockholder approval of any amendment to the 1996
Stock Option Plan in such a manner and to such a degree as is necessary and
desirable to comply with Rule 16b-3 under the Exchange Act and Sections 162(m)
and 422 of the Code (or any other applicable law or regulation, including the
requirements of any exchange or quotation system on which the common stock is
traded). No amendment or termination of the 1996 Stock Option Plan shall
impair the rights of any optionee, unless mutually agreed otherwise between
the optionee and the Company, which agreement must be in writing and signed by
the optionee and the Company. In any event, the 1996 Stock Option Plan shall
terminate in May 2009. Any options outstanding under the 1996 Stock Option
Plan at the time of its termination shall remain outstanding until they expire
by their terms.
Federal Income Tax Consequences
Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise may subject the optionee to the
alternative minimum tax. Upon a disposition of the shares more than two years
after grant of the option and one year after exercise of the option, any gain
or loss is treated as long-term capital gain or loss. If these holding periods
are not satisfied, the optionee recognizes ordinary income at the time of
disposition equal to the difference between the exercise price and the lower
of (i) the fair market value of the shares at the date of the option exercise
or (ii) the sale price of the shares. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as
ordinary income is treated as long-term or short-term capital gain or loss,
depending on the holding period. Long-term capital gains are grouped and
netted by holding periods. Net capital gains tax on assets held for more than
twelve months is currently capped at 20%. Capital losses are allowed in full
against capital gains and up to $3,000 against other income. A different rule
for measuring ordinary income upon such a premature disposition may apply if
the optionee is also an officer, director, or 10% Stockholder of the Company.
The Company is entitled to a deduction in the same amount as the ordinary
income recognized by the optionee.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price.
Any taxable income recognized in connection with an option exercise by an
employee of the Company is subject to tax withholding by the Company. The
Company is entitled to a deduction in the same amount as the ordinary income
recognized by the optionee. Upon a disposition of such shares by the optionee,
any difference between the sale price and the optionee's exercise price, to
the extent not recognized as taxable income as provided above, is treated as
long-term or short-term capital gain or loss, depending on the holding period.
Net capital gains tax on assets held for more than twelve months is capped at
20%. Capital losses are allowed in full against capital gains and up to $3,000
against other income.
The purchaser may accelerate to the date of purchase his or her recognition
of ordinary income, if any, and the beginning of any capital gain holding
period by timely filing an election pursuant to Section 83(b) of the Code. In
such event, the ordinary income recognized, if any, is measured as the
difference between the purchase price and the fair market value of the stock
on the date of purchase, and the capital gain holding period commences on such
date. The ordinary income recognized by a purchaser who is an employee will be
subject to tax withholding by the Company. Different rules may apply if the
purchaser is also an officer, director, or 10% Stockholder of the Company.
Awards under the ESPP. No income will be taxable to a participant until the
shares purchased under the ESPP are sold or otherwise disposed of. Upon sale
or other disposition of the shares, the participant will generally be subject
to tax and the amount of the tax will depend upon the holding period. If the
shares are sold or otherwise disposed of more than two (2) years from the
first day of the offering period or more than one (1) year from the date of
transfer of the stock to the participant (the "Statutory Holding Periods"),
then the participant will recognize ordinary income measured as the lesser of
(i) the excess of the fair market value of the
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shares at the time of such sale or disposition over the purchase price, or
(ii) an amount equal to 15% of the fair market value of the shares as of the
first day of the offering period. Any additional gain will be treated as long-
term capital gain. Net capital gains tax on assets held for more than twelve
months is capped at 20%. Capital losses are allowed in full against capital
gains and up to $3,000 against other income. If the shares are sold or
otherwise disposed of before the expiration of the Statutory Holding Periods,
the participant will recognize ordinary income generally measured as the
excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding periods. The Company is not entitled to a deduction for amounts
taxed as ordinary income or capital gain to a participant except to the extent
of ordinary income is recognized by participants upon a sale or disposition of
shares prior to the expiration of the Statutory Holding Periods described
above.
The foregoing is only a summary of the effect of federal income taxation
upon optionees, participants in the ESPP and the Company with respect to the
grant and exercise of options and the purchase of stock in the ESPP under the
1996 Stock Option Plan. Reference should be made to the applicable provisions
of the Code. In addition, the summary does not purport to be complete, and
does not discuss the tax consequences of the employee's or consultant's death
or the provisions of the income tax laws of any municipality, state or foreign
country in which the employee or consultant may reside.
Participation in the 1996 Stock Option Plan
The grant of options under the 1996 Stock Option Plan to employees,
including the Chief Executive Officer of the Company and the four other most
highly compensated executive officers of the Company determined as of the end
of the last fiscal year (hereafter referred to as the "Named Executive
Officers"), is subject to the discretion of the Administrator. As of the date
of this proxy statement, there has been no determination by the Administrator
with respect to future awards under the 1996 Stock Option Plan. Accordingly,
future awards are not determinable. Non-employee directors are not eligible to
participate in the 1996 Stock Option Plan. The following table sets forth
information with respect to the grant of options pursuant to the 1996 Stock
Option Plan to the Named Executive Officers, to all current executive officers
as a group and to all other employees as a group during the last fiscal year.
<TABLE>
<CAPTION>
Number of Securities
Underlying Options Exercise Price
Name of Individual and Position Granted ($ per Share)
- ------------------------------- -------------------- --------------
<S> <C> <C>
Vivek Y. Ranadive.......................... -- $--
President and Chief Executive Officer
Paul G. Hansen ............................ 37,499 6.00
Executive Vice President and Chief
Financial Officer
Rajesh U. Mashruwala ...................... 49,999 6.00
Executive Vice President, Sales and
Marketing
Robert P. Stefanski ....................... 72,499 6.00
Executive Vice President, General Counsel
and Secretary
Richard M. Tavan .......................... 14,000 6.00
Executive Vice President, Engineering and
Operations
All current executive officers as a group 223,996 6.00
(6 persons)...............................
All other employees as a group............. 3,177,541 8.50(1)
</TABLE>
- --------
(1) Represents a weighted average per share exercise price.
No executive officers or other employees of the Company participated in the
ESPP during the last fiscal year.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of November 30,
1999, of:
. each person or entity who is known by the Company to beneficially own
five percent or more of the outstanding shares of its common stock;
. each director of the Company;
. each Named Executive Officer; and
. all of the Company's directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are
currently exercisable or exercisable within 60 days of November 30, 1999 are
deemed outstanding.
Such shares, however, are not deemed outstanding for the purpose of
computing the percentage ownership of any other person. In computing the
number of shares beneficially owned by a person, shares of common stock that
are subject to our right of repurchase at the original exercise price paid per
share, or such shares that are subject to exercisable but unvested options,
are not included. Unvested options are immediately exercisable upon grant,
provided that upon the optionee's cessation of service, any unvested shares
are subject to repurchase by us at the original exercise price paid per share.
The address of each individual listed in the table is TIBCO Software Inc.,
3165 Porter Drive, Palo Alto, CA 94304. The percentages in the table below are
based on 60,404,969 shares of the Company's common stock outstanding as of
November 30, 1999. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, each stockholder named in the
table has had sole voting and investment power with respect to the shares set
forth opposite such stockholder's name.
<TABLE>
<CAPTION>
Shares Beneficially
Name Owned Percentage Ownership
---- ------------------- --------------------
<S> <C> <C>
Reuters Group PLC and related
entities (1)
85 Fleet Street
London, EC4P 4AJ.................... 37,767,312 58.61%
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134.................. 4,365,000 6.77
Mayfield Fund (2)
2800 Sand Hill Road
Menlo Park, CA 94025................ 2,861,316 4.44
Vivek Y. Ranadive (3)................ 4,141,374 6.43
Paul G. Hansen (4)................... 156,018 *
Robert P. Stefanski (5).............. 112,049 *
Richard M. Tavan (6)................. 184,399 *
Rajesh U. Mashruwala (7)............. 121,874 *
Douglas M. Atkin..................... -- *
Yogen K. Dalal (8)................... 2,877,982 4.47
Edward Kozel (9)..................... 4,398,334 6.83
Donald J. Listwin (10)............... 4,381,667 6.80
Larry W. Sonsini (11)................ 33,333 *
John G. Taysom....................... -- *
Phillip E. White (12)................ 175,830 *
Philip K. Wood....................... -- *
All directors and executive officers
as a group (15 persons) (13)........ 16,688,734 25.89
</TABLE>
9
<PAGE>
- --------
* Less than one percent.
(1) Represents shares held by Reuters Nederland B.V. Includes 4,722,790
shares reserved for sale to employees and consultants of TIBCO Finance
Technology Inc., a wholly-owned subsidiary of Reuters Group PLC
("Reuters") pursuant to the exercise by such employees and consultants of
purchase rights granted or to be granted to them by Reuters. Subsequent
to May 31, 1999, the Company granted Reuters an option to purchase
150,000 shares of its common stock under the Company's 1998 Director
Option Plan. Reuters has agreed to limit its voting power such that the
votes cast by Reuters will not represent more than 49% of the total votes
eligible to be cast in any matter submitted to a vote of the Company's
stockholders.
(2) Includes 2,718,250 shares held by Mayfield IX and 143,066 shares held by
Mayfield Associates Fund II.
(3) Includes 3,629,708 shares subject to options exercisable within 60 days
of November 30, 1999. Excludes 65,000 shares subject to the Company's
right of repurchase and 86,125 shares subject to options that are
unvested but exercisable within 60 days of November 30, 1999.
(4) Includes 115,230 shares subject to options exercisable within 60 days of
November 30, 1999. Excludes 673 shares subject to the Company's right of
repurchase and 333,807 shares subject to options that are unvested but
exercisable within 60 days of November 30, 1999.
(5) Includes 42,549 shares subject to options exercisable within 60 days of
November 30, 1999. Excludes 127,950 shares subject to options that are
unvested but exercisable within 60 days of November 30, 1999.
(6) Includes 11,100 shares subject to options exercisable within 60 days of
November 30, 1999. Excludes 120,000 shares subject to the Company's right
of repurchase and 37,400 shares subject to options that are unvested but
exercisable within 60 days of November 30, 1999.
(7) Includes 20,000 shares subject to options exercisable within 60 days of
November 30, 1999. Excludes 170,624 shares subject to the Company's right
of repurchase exercisable within 60 days of November 30, 1999.
(8) Includes 16,667 shares subject to options exercisable within 60 days of
November 30, 1999. Also includes 2,718,250 shares held by Mayfield IX and
143,066 shares held by Mayfield Associates Fund III. Mr. Dalal disclaims
beneficial ownership of all shares except to the extent of his pecuniary
interest in the partnerships.
(9) Consists of 33,333 shares subject to options exercisable within 60 days
of November 30, 1999. Also includes 4,365,000 shares held by Cisco
Systems, Inc. Mr. Kozel, one of the Company's directors, is a member of
the board of directors of Cisco Systems, Inc. and disclaims beneficial
ownership of all shares held by Cisco Systems, Inc.
(10) Includes 16,667 shares subject to options exercisable within 60 days of
November 30, 1999. Includes 4,365,000 shares held by Cisco Systems, Inc.
Mr. Listwin, one of the Company's directors, is an executive officer of
Cisco Systems, Inc., and disclaims beneficial ownership of all shares
held by Cisco Systems, Inc.
(11) Includes 33,333 shares subject to options exercisable within 60 days of
November 30, 1999.
(12) Includes 68,599 shares subject to options exercisable within 60 days of
November 30, 1999. Excludes 92,896 shares subject to the Company's right
of repurchase and 126,272 shares subject to options that are unvested but
exercisable within 60 days of November 30, 1999.
(13) Includes 3,932,723 shares subject to options exercisable within 60 days
of November 30, 1999. Excludes 418,644 shares subject to the Company's
right of repurchase and 952,518 shares subject to options that are
unvested but exercisable within 60 days of November 30, 1999.
10
<PAGE>
EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS
Summary Compensation Table
The following table sets forth information concerning the compensation paid
by the Company to the Named Executive Officers for services rendered to the
Company during the last two fiscal years. Amounts under the "Bonus" column
include bonuses earned during the fiscal year indicated but deferred until a
later year. In determining the amount of bonuses paid to the Named Executive
Officers, the compensation committee considered the financial performance of
the Company and the performance of the Named Executive Officers as compared to
the performance of comparable companies and compensation data from such
companies.
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual
Compensation Securities
-------------------- Underlying All Other
Name and Principal Positions Year Salary Bonus Options Compensation
- ---------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Vivek Y. Ranadive........... 1999 $345,833 $231,708 -- $ --
President, Chief Executive 1998 455,000(1) 200,000 232,500 --
Officer and Director
Paul G. Hansen.............. 1999 258,333 140,000 37,499 4,818(2)
Executive Vice President 1998 88,141(3) 40,000 449,000 --
and Chief Financial Officer
Rajesh U. Mashruwala........ 1999 217,000 240,000 49,999 --
Executive Vice President, 1998 213,333 85,000 62,500 --
Sales and Marketing
Robert P. Stefanski......... 1999 241,667 140,000 72,499 --
Executive Vice President, 1998 159,375(4) 75,000 18,000 41,430(5)
General Counsel and
Secretary
Richard M. Tavan............ 1999 231,333 140,000 14,000 --
Executive Vice President, 1998 234,000 66,000 36,000 --
Engineering and Operations
</TABLE>
- --------
(1) The Company was reimbursed $226,450 of this amount by Reuters Group, PLC
("Reuters") for time Mr. Ranadive spent working on matters for TIBCO
Finance Technology Inc., a wholly-owned subsidiary of Reuters.
(2) Represents amount reimbursed for executive financial planning services.
(3) Mr. Hansen began his employment with the Company as Executive Vice
President and Chief Financial Officer in July 1998. His annualized salary
in fiscal 1998 was $260,000 per year.
(4) Mr. Stefanski began his employment with the Company as Executive Vice
President and General Counsel in March 1998. His annualized salary in
fiscal 1998 was $245,000 per year.
(5) Represents amount reimbursed for relocation expenses.
Option Grants in Last Fiscal Year
The following table sets forth information as to stock options granted to
the Named Executive Officers during the fiscal year ended November 30, 1999.
These options were granted under the Company's 1996 Stock Option Plan and,
unless otherwise indicated, provide for vesting as to 20% of the underlying
common stock one year after the date of grant, then ratably over a period of
48 months thereafter. Options were granted at an exercise price equal to 100%
of the fair market value of the Company's common stock on the date of grant.
For options granted prior to the Company's initial public offering in July
1999, the fair market value of the Company's common stock on the date of grant
was as determined by the Company's board of directors. For options granted
after the initial public offering, the fair market value of the Company's
common stock on the date of grant was the closing sales price of the common
stock on the Nasdaq National Market on that date. The
11
<PAGE>
amounts under "Potential Realizable Value at Assumed Annual Rate of Stock
Appreciation for Option Term" represent the hypothetical gains of the options
granted based on assumed annual compound stock appreciation rates of 5% and
10% over the exercise price per share for the full ten-year term of the
options. The assumed rates of appreciation are mandated by the rules of the
Securities and Exchange Commission and do not represent the Company's estimate
or projection of future common stock prices. The table does not take into
account any appreciation in the price of the Company's common stock from the
date of the Company's initial public offering to the date of the proxy
statement.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Number of Percent Total Annual Rate
Securities Options of Stock Appreciation
Underlying Granted to Exercise for Option Term
Options Employees in Price Per Expiration ----------------------
Name Granted(#) Fiscal Year Share Date 5% 10%
---- ---------- ------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Vivek Y. Ranadive....... -- -- % $ -- -- $ -- $ --
Paul G. Hansen.......... 37,499 1.09 6.00 2/15/09 141,498 358,582
Rajesh U. Mashruwala.... 49,999 1.46 6.00 2/15/09 188,665 478,113
Robert P. Stefanski..... 72,499(1) 2.11 6.00 2/15 & 273,565 693,268
5/3/09
Richard M. Tavan........ 14,000 0.41 6.00 2/15/09 52,827 133,879
</TABLE>
- --------
(1) Includes an option to purchase 60,000 shares granted to Mr. Stefanski in
connection with his surrender of a right to purchase 70,000 shares of the
Company's common stock which was granted to him by Reuters Group PLC, the
Company's majority stockholder, in connection with his former employment
at TIBCO Finance Technology Inc., a wholly-owned subsidiary of Reuters
Group PLC.
Aggregate Stock Option Exercises in Fiscal 1999 and Fiscal Year-End Values
The following table sets forth information with respect to unexercised
options held by the Named Executive Officers as of November 30, 1999. Amounts
under "Unexercisable" in the table below include unvested options
notwithstanding the fact that they are immediately exercisable upon grant
because unvested shares are subject to repurchase by us at the original
exercise price upon the employee's cessation of service. The amounts under
"Value of Unexercised In-the-Money Options" were calculated by determining the
difference between the exercise price and the price of the Company's common
stock as of November 30, 1999 which was $97.00.
<TABLE>
<CAPTION>
Number of Securities
Underlying
Shares Unexercised Options Value of Unexercised
Acquired at November 30, 1999 In-the-Money Options
on Exercise Value ------------------------- --------------------------
Name (#) Shares Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ---------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Vivek Y. Ranadive....... 100,000 $ 250,000 3,625,291 90,542 $349,461,269 $ 8,692,032
Paul G. Hansen.......... -- -- 104,256 344,781 9,841,766 32,419,830
Rajesh U. Mashruwala.... 287,498 1,069,995 -- -- -- --
Robert P. Stefanski..... 30,000 162,000 34,449 136,050 3,190,399 12,847,050
Richard M. Tavan........ 1,500 12,000 9,900 38,600 950,400 3,635,600
</TABLE>
All of the Company's executive officers are employed at-will. However, Mr.
Ranadive's employment may only be terminated upon 120 days written notice and
Mr. Stefanski's employment may only be terminated upon six months written
notice pursuant to agreements entered into with the Company. All other
employees may be terminated without cause upon two weeks written notice or
with cause at any time.
Each of the Company's executive officers is a party to the Company's
standard non-disclosure agreement. Under the non-disclosure agreements, for
one year following their termination, the Company's employees agree not to
solicit any other employee to leave the Company. The employees also agree not
to disclose any confidential information that they obtained during their
employment to any third parties at any time during or subsequent to their
employment. In addition, any inventions, discoveries or improvements created
by the employees during their employment belong to the Company.
12
<PAGE>
DIRECTOR COMPENSATION
The Company's 1998 Director Option Plan provides for an automatic annual
grant to each of its non-employee directors of an option to purchase 20,000
shares of common stock at an exercise equal to its fair market value on the
date of grant. In June 1999, the Company granted to Reuters Group PLC
("Reuters") an option to purchase 150,000 shares of our common stock at an
exercise price of $6.00 per share under the Company's 1998 Director Stock
Option Plan. Reuters has the right to transfer this option to directors of the
Company that were nominated by Reuters, currently Douglas M. Atkin, John G.
Taysom and Philip K. Wood. Directors of the Company do not receive any cash
compensation for serving on its board of directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, the compensation committee of the Company's board of
directors included, at various times, the following directors and former
directors: Simon Yencken, Yogen K. Dalal, Donald J. Listwin, Philip K. Wood
and Phillip E. White. Since August 1997, Mr. White has provided consulting
services to the Company. In connection with these consulting services, the
Company paid $219,250 to Mr. White in fiscal 1999. In fiscal 1999, the Company
also granted to Mr. White options to purchase 20,000 shares of common stock
for serving as a director. Mr. Wood is the Deputy Finance Director of Reuters,
the beneficial owner of a majority of the Company's common stock, and Mr. Wood
was nominated for service on the Company's board of directors by Reuters.
During fiscal 1999, Mr. Yencken served as an executive officer and director
of TIBCO Finance Technology Inc. ("TFT"), a wholly-owned subsidiary of
Reuters, and Mr. Yencken was nominated for service on the Company's board of
directors by Reuters. The Company entered into an amended license, maintenance
and distribution agreement with Reuters and TFT in May 1999. Revenue from
Reuters and TFT under the license, maintenance and distribution agreement,
consisting primarily of product fees on sales by TFT of the Company's products
to financial services companies, was $19.5 million in fiscal 1999.
The license agreement prohibits the Company from using the technology the
Company licenses from Reuters to create products which contain functionality
or features specifically designed for use by financial services companies, or
to assist third parties in doing so. Financial services companies include
entities engaged in commercial banking, investment banking, insurance and
other financial services. Further, subject to the exceptions described below,
the license agreement prevents the Company from selling products and services
based on the technology the Company licenses from Reuters directly to
financial services companies and certain principal competitors of Reuters, and
from providing consulting or other services related to such products directly
to such companies.
Reuters, through TFT, is the preferred distributor of the Company's products
in the financial services market, and the Company has agreed not to appoint
any other third party reseller to sell the Company's products principally in
this market. In addition, for a term of five years commencing on May 28, 1999,
Reuters and TFT have the exclusive right to distribute the Company's products
to customers in the financial services market segment, subject to exceptions.
During this exclusivity period, and subject to exceptions, the Company is
prevented from providing any products or consulting services to financial
services companies. When Reuters or TFT sell licenses to and maintenance
contracts for the Company's products, they must pay the Company 40% of their
revenue from such sales, except with respect to products embedded in Reuters
or TFT products. However, if Reuters or TFT sell licenses to and maintenance
contracts for the Company's products through an unaffiliated third-party, then
they must pay the Company 50% of their revenue from such sales. The Company
believes that the product fees paid by Reuters and TFT to the Company reflect
commercially reasonable terms.
Reuters and TFT must pay the Company minimum guaranteed product fees of $16
million payable in calendar 1999, $18 million payable in calendar 2000 and $20
million payable in calendar 2001. On an annual basis beginning in 2002,
Reuters may elect to extend the payment of minimum guarantees on an annual
basis
13
<PAGE>
with minimum guarantees of at least $20 million in each of 2002 and 2003 and
at least 110% of the prior year's minimum guaranteed product fees in each year
thereafter. If Reuters does not extend the payment of minimum guarantees, the
restrictions against the Company's direct sales to financial services
customers will be removed with respect to the Company's non-financial software
products that are sold as an off-the-shelf, stand-alone product pursuant to an
industry standard shrink wrap or click wrap license and that are intended by
the Company to be used by the end-user without the requirement for additional
customization, or consulting services, which the Company calls commodity
products, and the product fee rate Reuters and TFT must pay will decrease to
35%.
If the license agreement is materially breached by the Company, or if the
financial services market restrictions or exclusive distribution terms are
determined to be invalid by a court, or if after the expiration of the
Company's exclusive distribution relationship with Reuters and TFT the Company
sells products or provides services directly to companies in the financial
services market, Reuters and TFT may elect to cease paying minimum guaranteed
product fees and the product fee rates paid to the Company by Reuters and TFT
will decrease to 30%. In addition, in the event the Company materially
breaches the license agreement, the Company thereafter will be prohibited from
selling or distributing to financial services companies commodity products,
or, after the expiration of the five-year exclusive distribution relationship
with Reuters and TFT, commodity products that are based on the technology the
Company licenses from Reuters, even though Reuters and TFT no longer pay the
Company minimum guaranteed product fees.
The Company has agreed to provide maintenance and support to Reuters and TFT
for their customers that acquire the Company's products and have purchased
maintenance. Reuters and TFT must pay the Company a fee for maintenance of the
Company's products at the same rate they pay on sales of the Company's
products. So long as Reuters and TFT are required to pay the Company a minimum
guarantee, the Company must maintain, at no charge to Reuters or TFT, at least
ten full-time employees for maintenance, marketing and technical support for
the Company's products sold by Reuters and TFT. The terms of the License
Agreement were the result of negotiations among Reuters, TFT and the Company,
and were approved by a majority of the Company's board of directors, including
a majority of the Company's independent and disinterested directors.
In addition, the Company has agreed with TFT that TFT will provide the
Company with operating and administrative services for a transition period
after the Company's initial public offering. These services include network
and information technology infrastructure support, facilities support and
human resources support. These services are generally those that TFT had been
providing before TFT moved into its new corporate headquarters at 3375
Hillview Avenue, Palo Alto. The Company's agreement with TFT includes service
levels based on the Company's past practice with TFT. The Company has a right
to request that TFT continue to provide these services through the first
quarter of 2000. The Company recorded expenses of $2.3 million in fiscal 1999
for administrative and various other services provided to the Company by TFT.
In addition, the Company incurred rent expense of $1.0 million in fiscal 1999
relating to the Company's sub-lease of office space from TFT and the Company's
rental of certain furniture and fixtures from TFT.
The Company and TFT have also agreed to participate with each other in
disaster recovery and Year 2000 contingency planning and to cooperate in other
efforts intended to assure an orderly transition. In the event that the
Company and TFT have inadvertently failed to specify a service that was being
previously performed by TFT for the Company, the Company has preserved the
ability to include that additional service in the Company's agreement. The
Company believes that the terms of the intercompany services provided by TFT
are on terms no less favorable to the Company than the Company could have
negotiated with an unaffiliated third party.
The Company has from time to time entered into arrangements with TFT
regarding the sharing of employees on various customer projects. For services
the Company provided to TFT under these arrangements, the Company recognized
revenue of approximately $306,919 in fiscal 1999. For services TFT provided to
the Company under these arrangements, the Company recorded expenses of
approximately $2.3 million in fiscal 1999.
Mr. Listwin is Executive Vice President of Cisco Systems, Inc. ("Cisco"). In
March 1999, the Company granted Cisco a license to embed its TIB/Rendezvous
product and multicasting technology in its Internetworking
14
<PAGE>
Operating System and Cisco Networking Services for Active Directory, or
CNS/AD, products in exchange for a license fee of $1.5 million, plus ongoing
maintenance fees of $405,000, annually. The terms of this transaction were the
result of arm's-length negotiations between Cisco and the Company, and were
approved by a majority of the Company's board of directors, including a
majority of its independent and disinterested directors. The Company believes
that the terms of the technology licensing agreement with Cisco are no less
favorable to it than could have been negotiated with an unaffiliated third
party.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Special Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Robert P. Stefanski
_____________________________________
Robert P. Stefanski
Secretary
January , 2000
15
<PAGE>
DETACH HERE
- --------------------------------------------------------------------------------
PROXY
TIBCO SOFTWARE INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of TIBCO Software Inc., a Delaware corporation,
hereby acknowledges receipt of the Notice of Special Meeting of Stockholders and
Proxy Statement, each dated January ___, 2000, and hereby appoints Vivek Y.
Ranadive and Paul G. Hansen, and each of them, proxies, with full power of
substitution, to represent the undersigned and to vote as designated on the
reverse side, all shares of common stock of TIBCO Software Inc. that the
undersigned is entitled to vote at the Special Meeting of Stockholders of TIBCO
Software Inc. to be held on January 24, 2000 at 2:00 p.m., local time, at the
headquarters of TIBCO Software Inc. located at 3165 Porter Drive, Palo Alto,
California 94304, and at any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR EACH OF THE PROPOSALS ON THE REVERSE SIDE HEREOF AND FOR SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXIES DEEM ADVISABLE.
- -------------- --------------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- -------------- --------------
<PAGE>
DETACH HERE
- --------------------------------------------------------------------------------
[X] Please mark
votes as in
this example.
A vote FOR the following proposal is recommended by the Board of Directors.
1. Proposal to amend TIBCO Software
Inc.'s 1996 Stock Option Plan as
described in the accompanying Proxy
Statement.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
[_] [_] [_] MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
In their discretion, the Proxies are authorized to vote or otherwise
represent the shares on any and all such other business which may properly
come before the meeting or any adjournment thereof.
Please sign exactly as your name appears on your stock certificate. If the
stock is held by joint tenants or as community property, both should sign.
Executors, administrators, trustees, guardians, attorneys and corporate
officers should insert their titles.
Signature:_____________________ Date:____________ Signature:_____________________ Date:______________
</TABLE>
