FORM 10-K - AnnualReports.com 10-K TIBCO SOFTWARE INC - TIBX Filed: January 25, 2008 (period:...

FORM 10-KTIBCO SOFTWARE INC - TIBXFiled: January 25, 2008 (period: November 30, 2007)

Annual report which provides a comprehensive overview of the company for the past year

Table of Contents

10-K - FORM 10-K

PART I

ITEM 1. 3 PART I

ITEM 1. BUSINESS ITEM 1A. RISK FACTORS ITEM 1B. UNRESOLVED STAFF COMMENTS ITEM 2. PROPERTIES ITEM 3. LEGAL PROCEEDINGS ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS PART II

ITEM 5. MARKET FOR REGISTRANT S COMMON EQUITY, RELATEDSTOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES

ITEM 6. SELECTED FINANCIAL DATA ITEM 7. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATION

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATEGOVERNANCE

ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS ANDDIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES SIGNATURES EXHIBIT INDEX

EX-10.1 (FORM OF REGISTRANT'S INDEMNIFICATION AGREEMENT.)

EX-10.18 (CHANGE IN CONTROL AND SEVERANCE PLAN.)

EX-10.19 (FORM OF RESTRICTED STOCK AGREEMENT.)

EX-10.20 (FORM OF STOCK OPTION AGREEMENT.)

EX-21 (LIST OF SUBSIDIARIES.)

EX-23 (CONSENT OF PRICEWATERHOUSECOOPERS LLP)

EX-31.1 (CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULE13A-14(A)/15D-14(A))

EX-31.2 (CERTIFICATION BY CHIEF FINANCIAL OFFICER RULE13A-14(A)/15D-14(A))

EX-32.1 (CERTIFICATION BY CHIEF EXECUTIVE OFFICER)

EX-32.2 (CERTIFICATION BY CHIEF FINANCIAL OFFICER)

Table of Contents

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K(Mark One)

⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended November 30, 2007

� TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to

Commission File Number: 000-26579

TIBCO SOFTWARE INC.(Exact name of registrant as specified in its charter)

Delaware 77-0449727(State or other jurisdiction of

incorporation or organization) (I.R.S. Employer

Identification No.)

3303 Hillview Avenue, Palo Alto, CA 94304(Address of principal executive offices) (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.001 par value per share(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No �

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes � No ⌧

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to thebest of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K. ⌧

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

Large accelerated filer ⌧ Accelerated filer � Non-accelerated filer �

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

The aggregate market value of the voting stock held by non-affiliates of the registrant (based upon the closing sale price of such shares on the NASDAQGlobal Select Market on June 3, 2007) was approximately $1,650,737,499. Shares of common stock held by each executive officer and director and by eachentity that owns 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination ofaffiliate status is not necessarily a conclusive determination for other purposes.

As of January 18, 2008, there were 187,061,741 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for the 2008 Annual Meeting of Stockholders to be held on April 17, 2008 are incorporated by reference intoPart III of this Annual Report on Form 10-K to the extent stated herein.

Source: TIBCO SOFTWARE INC, 10-K, January 25, 2008

Table of ContentsTIBCO SOFTWARE INC. FORM 10-K

For the Fiscal Year Ended November 30, 2007

TABLE OF CONTENTS

PagePART I

ITEM 1. BUSINESS 3

ITEM 1A. RISK FACTORS 7

ITEM 1B. UNRESOLVED STAFF COMMENTS 15

ITEM 2. PROPERTIES 15

ITEM 3. LEGAL PROCEEDINGS 16

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 16

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES 17

ITEM 6. SELECTED FINANCIAL DATA 19

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 20

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 39

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 40

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 40

ITEM 9A. CONTROLS AND PROCEDURES 40

ITEM 9B. OTHER INFORMATION 41

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 42

ITEM 11. EXECUTIVE COMPENSATION 43

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS 43

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 43

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 43

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 44

SIGNATURES II-1

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Table of ContentsForward Looking Statements

This Annual Report on Form 10-K contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the“Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward looking statements relate to expectationsconcerning matters that are not historical facts. Words such as “projects,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “strategy,” “continue,” “will,”“estimate,” “forecast” and similar words and expressions are intended to identify forward looking statements. Although we believe that the expectations reflectedin the forward looking statements contained herein are reasonable, these expectations or any of the forward looking statements could prove to be incorrect, andactual results could differ materially from those projected or assumed in the forward looking statements. Our future financial condition and results of operations,as well as any forward looking statements, are subject to risks and uncertainties, including, but not limited to, the factors set forth under Item 1A. “Risk Factors.”All forward looking statements and reasons why results may differ included in this Annual Report on Form 10-K are made as of the date hereof, and we assumeno obligation to update any such forward looking statements or reasons why actual results may differ.

PART I

ITEM 1. BUSINESS

Overview

TIBCO Software Inc. (“TIBCO,” the “Company,” “we” or “us”) is a leading provider of infrastructure software. We provide a broad range ofstandards-based infrastructure software solutions that help organizations achieve the benefits of real-time business. Our infrastructure software gives customersthe ability to constantly innovate by connecting applications and data in a service-oriented architecture, streamlining activities through business processmanagement, and giving people the information and intelligence tools they need to make faster and smarter decisions, what we call The Power of Now®.

As the basis of the real-time movement of data across the enterprise, TIBCO’s software is uniquely capable of correlating information in real-time aboutan organization’s operations and performance with information about expected behavior and business rules so a company can anticipate and respond to threatsand opportunities before they occur. Our software enables our customers to leverage and extend the capabilities of their own information technology applicationsand assets to move towards a new way of doing business that lets organizations anticipate customer needs, create opportunities and avoid potential problems.

We are the successor to a portion of the business of Teknekron Software Systems, Inc. (“Teknekron”). Teknekron developed software, known as TheInformation Bus® (“TIB”) technology, for the integration and delivery of market data, such as stock quotes, news and other financial information, in tradingrooms of large banks and financial services institutions. In 1992, Teknekron expanded its development efforts to include solutions designed to enable complexand disparate manufacturing equipment and software applications, primarily in the semiconductor fabrication market, to communicate within the factoryenvironment. Teknekron was acquired by Reuters Group PLC (“Reuters”), the global information company, in 1994. Following the acquisition, continueddevelopment of the TIB® technology was undertaken to expand its use in the financial services markets.

In January 1997, TIBCO was established as an entity separate from Teknekron. We were formed to create and market software solutions for use in theintegration of business information, processes and applications. In connection with our establishment as a separate entity, Reuters transferred to us certain assetsand liabilities related to our business and granted to us a royalty-free license to the intellectual property from which some of our messaging software productsoriginated.

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Table of ContentsWe have acquired a range of companies and technologies. Most recently, in June 2007, we acquired Spotfire Holdings, Inc. (“Spotfire”), a leading provider

of next-generation business intelligence software with approximately 200 employees worldwide. The addition of Spotfire’s software is a natural extension of ourbusiness strategy that allows us to offer customers next-generation business intelligence solutions for faster data access and analysis. The results of Spotfire’soperations are included in our results of operations beginning on June 5, 2007.

Trademarks

TIBCO, TIBCO Software, The Information Bus, TIB, The Power of Now and Spotfire are the trademarks or registered trademarks of TIBCO SoftwareInc. in the United States and other countries. This Annual Report on Form 10-K also refers to the trademarks of other companies.

TIBCO Products

We offer a wide range of software products that can be sold individually to solve specific technical challenges, but the emphasis of our productdevelopment and sales efforts is to create products that interoperate and can be sold together as a suite to enable businesses to be more cost-effective, agile andefficient. These products can help organizations achieve success in three areas: service-oriented architecture (“SOA”), business optimization and businessprocess management (“BPM”).

• SOA: Our software helps organizations migrate to an IT infrastructure made up of services that can be assembled, orchestrated and reused. SOAturns information and functions into discrete and reusable components that can be invoked from across the business and aggregated with other suchservices to create “composite applications.” This helps companies streamline the integration and orchestration of assets across technological,organizational and geographical boundaries. Our software enables the creation, management and virtualization of heterogeneous services andprovides a unified environment for policy and service management. It also delivers capabilities in the areas of service mediation, orchestration andcommunication and the development of rich internet applications. Our products give companies the flexibility to do these things using the standardsor technologies that best meet their needs in specific situations (such as HTTP, e-mail, J2EE, EDI, Messaging, .NET, Web Services, etc.) withoutreplacing existing technologies or committing to any one technology across the enterprise.

• Business optimization: Our software helps organizations convert and analyze data to create meaningful information and deliver it to employees,customers and partners. Our software also tracks large volumes of real-time events as they occur and applies sophisticated rules in order to identifypatterns that signify problems, threats and opportunities, and can automatically initiate appropriate notifications or adaptation of processes. Thishelps line-level employees perform their jobs, helps managers identify and analyze problems and opportunities, and gives customers the ability toget accurate and consistent information directly or through salespeople, service personnel or customer care representatives.

• BPM: Our software helps organizations better coordinate the process flows that control how their assets work together. This software cancoordinate the human and electronic resources inside a business and its network of customers and partners. Our products not only automate routinetasks and exception handling, but orchestrate long-lived activities and transactions that cut across organizational and geographical boundaries. Oursoftware enables organizations to provide a higher level of customer satisfaction, retain customers, maximize partnerships with other businesses andout-execute their competitors.

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

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Table of ContentsServices

Professional Services

Our professional services offerings include a wide range of consulting services such as systems planning and design, installation and systems integrationfor the rapid deployment of TIBCO products. We offer our professional services with the initial deployment of our products as well as on an ongoing basis toaddress the continuing needs of our customers. Our professional services staff is located throughout the Americas; Europe, the Middle East and Africa(“EMEA”) and Asia Pacific and Japan (“APJ”) enabling us to perform installations and respond to customer demands rapidly across our global customer base.Many of our professional services employees have advanced degrees, substantial TIBCO experience and industry expertise in systems architecture and designand also have domain expertise in financial services, telecommunications, manufacturing, energy, logistics, healthcare and other industries.

We also have relationships with resellers, professional service organizations and system integrators including Accenture, Atos Origin, BearingPoint, CapGemini, Deloitte Consulting and Electronic Data Systems, which include their participation in the deployment of our products to customers. These relationshipshelp promote TIBCO products and provide additional technical expertise to enable us to provide the full range of professional services our customers require todeploy our products.

Maintenance and Support

We offer a suite of software support and maintenance options that are designed to meet the needs of our diverse customer base. These support optionsinclude 24 hour coverage that is available seven days a week, 365 days a year, to meet the needs of our global customers. To accomplish this level of support wehave established a worldwide support organization with major support centers in Palo Alto, California; London and Swindon, England; Woy Woy, Australia;Beijing, China; and Pune, India. These centers, working in conjunction with several smaller support offices located throughout the Americas, EMEA and APJ,provide seamless support using a “follow-the-sun” support model.

In addition to support teams around the globe, we have a customer support website that provides our customers with the ability to submit service requests,receive confirmation that a service request has been opened and obtain current status on these requests. Additionally, the customer support website providesaccess to our support procedures, escalation numbers and late breaking news (“LBN”). LBN is used to provide updates and new information about our products.It also provides customers with information on generally known problems and suggested solutions or workarounds that may be available.

Training

We provide a comprehensive and global training program for customers and partners. Training is available at our main office in Palo Alto, California andat major training centers in Houston, Texas; Maidenhead, England; Munich, Germany; and Tokyo, Japan. We also deliver training on-site at customer locations.Our Educational Services group has the capability to develop solutions to address the specific needs of individual customers and partners. Our curriculum leadsto an industry recognized technical certification in high visibility TIBCO technologies.

Sales

We currently market our software and services primarily through a direct sales organization complemented by indirect sales channels. Our direct salesforce is located throughout the Americas, EMEA and APJ and operates globally through our foreign subsidiaries.

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Table of ContentsOur revenue consists of license and service and maintenance fees from our customers and distributors. License fees represented approximately 45%, 46%

and 46% of our total revenue in fiscal years 2007, 2006 and 2005, respectively. Revenue from service and maintenance represented approximately 55%, 54% and54% of our total revenue in fiscal years 2007, 2006 and 2005, respectively.

Sales to customers outside the United States totaled $310.0 million, representing 54% of our total revenue in fiscal year 2007. For a geographic breakdownof our revenue and property and equipment, see Note 21 to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

Marketing

We use a mix of market research, analyst updates, seminars, direct mail, print advertising, trade shows, speaking engagements, public relations, customernewsletters and web marketing in order to achieve our marketing goals. Our marketing department also produces collateral material for distribution to potentialcustomers including presentation materials, white papers, brochures, magazines and fact sheets. We also host annual user conferences for our customers andprovide support to our channel partners with a variety of programs, training and product marketing support materials.

Seasonality

Our business is subject to variations throughout the year due to seasonal factors in the U.S. and worldwide. These factors include fewer selling days duringthe summer vacation season (which has a disproportionate effect on sales in Europe), the impact of the December holidays and a slow down in capitalexpenditures by our customers after calendar year-end (during our first fiscal quarter). These factors typically constrain sales activity in our first and third fiscalquarters compared to the rest of the year, and they make quarter-to-quarter comparisons of our operating results less meaningful.

Competition

The market for our products and services is extremely competitive and subject to rapid change. While we offer a comprehensive suite of integrationsolutions and believe we are the market leader among infrastructure software companies, we compete with various providers of infrastructure software includingBEA, IBM, Microsoft, Oracle, SAP and Software AG. We believe that none of these companies has a suite of infrastructure software products as complete asours, but BEA, IBM, Microsoft, Oracle and SAP offer products outside our segment and routinely bundle their broader set of products with their infrastructuresoftware products. We expect additional competition from other established and emerging companies. In addition, we may face pricing pressures from ourcurrent competitors and new market entrants in the future. We believe that the competitive factors affecting the market for our products and services includeproduct functionality and features, quality of professional services offerings, performance and price, ease of product implementation, quality of customer supportservices, customer training and documentation, and vendor and product reputation. The relative importance of each of these factors depends upon the specificcustomer environment. We believe that our products and services currently compete favorably with respect to such factors. However, we may not be able tomaintain our competitive position against current and potential competitors.

Research and Development

Our success is heavily dependent on our ability to develop new products and technologies and to enhance our existing products. We expect that a majorityof our research and development activities will focus on enhancing and extending our TIBCO products and that such enhancements and new products will bedeveloped internally. However, as part of our development strategy, we may also license or acquire externally developed technologies for inclusion in ourproduct lines. We expect that we will continue to commit significant resources to product development in the future. Product development costs are recorded asresearch and development

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Table of Contentsexpenses. Our research and development expenses, including stock-based compensation expense, were $92.9 million, $85.9 million and $73.1 million in fiscalyears 2007, 2006 and 2005, respectively. To date, all product development costs have been expensed as incurred, because the time period between achievingtechnological feasibility for a product and the general availability of such product has typically been very short.

Proprietary Technology

Our success is dependent upon our proprietary software technology. We believe that factors such as the technological and creative skills of our personnel,product enhancements and new product developments are all essential to establishing and maintaining a technology leadership position. We hold numerousUnited States and foreign patents and have several pending patent applications. We additionally license some patents from Reuters on a royalty-free basis. Thesepatent rights notwithstanding, we currently rely primarily on trade secret rights, copyright and trademark laws, and nondisclosure and other contractualagreements to protect our technology. We enter into confidentiality and/or license agreements with our employees, distributors and customers, and limit access toand distribution of our software, documentation and other proprietary information. Despite these protective measures, third parties could still copy and use ourproducts or otherwise misappropriate our technology.

Furthermore, third parties might independently develop competing technologies that include the same functionality or features, or otherwise aresubstantially equivalent or superior to our technologies. In addition, effective patent, copyright, trademark and trade secret protection may be unavailable orlimited in certain foreign countries where we operate. Our business could suffer serious harm if we fail to protect our proprietary technology.

Employees

As of November 30, 2007, we employed 1,900 persons, including 598 in sales and marketing, 504 in research and development, 230 in general andadministrative and 568 in professional services and technical support. Of our 1,900 employees, 1,056 were located in the Americas, 499 in EMEA and 345 inAPJ. Our success is highly dependent on our ability to attract and retain qualified employees. Competition for employees is intense in the software industry. Todate, we believe we have been successful in our efforts to recruit qualified employees, but there is no assurance that we will continue to be as successful in thefuture.

Available Information

We are subject to the informational requirements of the Exchange Act. Therefore, we file periodic reports, proxy statements and other information with theSecurities and Exchange Commission (“SEC”). Such reports, proxy statements and other information may be obtained by visiting the Public Reference Room ofthe SEC at 100 F Street, NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site(http://www.sec.gov) that contains reports, proxy statements and other information required that issuers file electronically.

Our principal internet address is www.tibco.com. We make available free of charge on www.tibco.com our annual reports on Form 10-K, our quarterlyreports on Form 10-Q, our current reports on Form 8-K and amendments to those reports, as soon as reasonably practicable after we electronically file suchmaterial with, or furnish it to, the SEC. Information contained or referenced on our website is not incorporated by reference in and does not form a part of thisAnnual Report on Form 10-K.

ITEM 1A. RISK FACTORS

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

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Table of ContentsOur future revenue and results of operations are unpredictable, and we expect our quarterly operating results to fluctuate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Political and economic conditions can adversely affect our revenue and results of operations.

Our business can be affected by a number of factors that are beyond our control such as general geopolitical economic and business conditions, conditionsin the financial services markets, the overall demand for enterprise software and services and general political and economic developments. A weakening of theglobal economy could cause delays in and decreases in demand for our products. In addition, hostilities in various parts of the world, potential public healthcrises and natural disasters continue to contribute to economic uncertainty that could adversely affect our revenue growth and results of operations.

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Table of ContentsThe past slowdown in the market for infrastructure software and its protracted recovery have caused our revenue to decline in the past and could causeour revenue or results of operations to fall below expectations in the future.

The market for infrastructure software is relatively new and evolving. We earn a substantial portion of our revenue from licenses of our infrastructuresoftware, including application integration software and sales of related services. We expect to earn substantially all of our revenue in the foreseeable future fromsales of these products and services. Our future financial performance will depend on continued growth in the number of organizations demanding software andservices for application integration and information delivery and companies seeking outside vendors to develop, manage and maintain this software for theircritical applications. Lower spending by corporate and governmental customers around the world, which has had a disproportionate impact on informationtechnology spending, has led to a reduction in sales in the past and may continue to do so in the future. Many of our potential customers have made significantinvestments in internally developed systems and would incur significant costs in switching to third-party products, which may substantially inhibit the growth ofthe market for infrastructure software. If the market fails to grow, or grows more slowly than we expect, our sales will be adversely affected. Also, even ascorporate and governmental spending increases and companies make greater investments in information technology and infrastructure software, our revenue maynot grow at the same pace.

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

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

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

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

The market for our products and services is extremely competitive and subject to rapid change. We compete with a variety of large and small providers ofinfrastructure software, SOA, business optimization and BPM,

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Table of Contentsincluding companies such as IBM, Oracle, Microsoft, BEA, SAP, Pegasystems and Software AG. We believe that of these companies, IBM has the potential tooffer the most complete competitive set of products relative to our offerings. In addition, companies such as IBM, Microsoft, Oracle and SAP offer productsoutside our segment and routinely bundle their broader set of products with their infrastructure software products. Further, some of our competitors areexpanding their competitive product offerings and market position through acquisitions and internal research and development. We expect additional competitionfrom other established and emerging companies. We also face competition for certain aspects of our product and service offerings from major systemsintegrators. Further, we may face increasing competition from open source software providers such as MuleSource that provide software and intellectualproperty, typically without charging license fees, or from other competitors offering products through alternative business models, such as software as a service.If customers choose such alternatives over our proprietary software, our revenues and earnings could be adversely affected.

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

If we are not successful in developing enhancements to existing products and new products in a timely manner, achieving customer acceptance for ourexisting and new product offerings or generating higher average selling prices, our gross margins may decline, and our business and operating results maysuffer. Furthermore, any of our new product offerings or significant enhancements to current product offerings could cause some customers to delay making newor additional purchases while they fully evaluate any new offerings we might have introduced to the market, which in turn may slow sales and adversely affectoperating results for an indeterminate period of time. Also, we may not execute successfully on our product plans because of errors in product planning or timing,technical hurdles that we fail to overcome in a timely fashion or a lack of appropriate resources. This could result in competitors providing those solutions beforewe do and loss of market share, net sales and earnings.

Increases in services revenues may decrease overall margins.

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

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

We monitor individual customer payment capability in granting credit arrangements, seek to limit credit to amounts we believe the customers can pay, andmaintain reserves we believe are adequate to cover exposure for doubtful accounts. As we have grown our revenue and customer base, our exposure to credit riskhas increased. Although we have not had material losses to date as a result of customer defaults, future defaults, if incurred, could harm our business and have anadverse effect on our business, operating results and financial condition.

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

If we fail to retain and recruit key management, sales employees and other skilled employees, our business and our ability to obtain new customers,develop new products and provide acceptable levels of customer service could suffer. As we grow, we must invest significantly in building our sales, marketingand engineering groups.

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Table of ContentsCompetition for these people in the software industry is intense, and we may not be able to successfully recruit, train or retain qualified personnel. We arecompeting against companies with greater financial resources and name recognition for these employees, and as such, there is no assurance that we will be ableto meet our hiring needs or hire the most qualified candidates. The success of our business is also heavily dependent on the leadership of our key managementpersonnel, including Vivek Ranadivé, our Chairman and Chief Executive Officer. The loss of one or more key employees could adversely affect our continuedoperations.

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

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

We have historically used equity incentive programs, such as employee stock options and stock purchase plans, as a part of overall employeecompensation arrangements. As a result of changes in the financial accounting standards, we have changed our stock purchase plan, reduced the size and numberof stock option grants we give to our employees, changed the form of equity compensation we give to some of our employees and may make further changes toour equity compensation programs, all of which may decrease the effectiveness of our plans as employee retention and recruiting tools. In addition, the volatilityof our stock price may negatively impact the value of such equity incentives, thereby diminishing the value of such incentive programs to employees anddecreasing the effectiveness of such programs as retention and recruiting tools. Given this, we may need to change our compensation packages to employees toremain competitive which could negatively affect our profit margins.

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

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

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

We cannot be certain that our products do not infringe issued patents or other intellectual property rights of others. In addition, our use of open sourcesoftware components in our products may make us vulnerable to claims that our products infringe third-party intellectual property rights, in particular becausemany of the open source software components we may incorporate with our products may be developed by numerous independent parties over whom weexercise no supervision or control. “Open source software” is software that is covered by a license agreement which permits the user to liberally copy, modifyand distribute the software, typically free of charge. Further, because patent applications in the United States and many other countries are not publicly disclosedat the time of filing, applications covering technology used in our software products may have been filed without our knowledge. We may be subject to legalproceedings and claims from time to time, including claims of alleged infringement of the patents, trademarks and other intellectual property rights of thirdparties by us or our licensees in connection with their use of our products. Our software license agreements typically provide for indemnification of ourcustomers for intellectual property infringement claims. Intellectual property

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Table of Contentslitigation is expensive and time consuming and could divert our management’s attention away from running our business and seriously harm our business. If wewere to discover that our products violated the intellectual property rights of others, we would have to obtain licenses from these parties in order to continuemarketing our products without substantial reengineering. We might not be able to obtain the necessary licenses on acceptable terms or at all, and if we could notobtain such licenses, we might not be able to reengineer our products successfully or in a timely fashion. If we fail to address any infringement issuessuccessfully, we would be forced to incur significant costs, including damages and potentially satisfying indemnification obligations that we have with ourcustomers, and we could be prevented from selling certain of our products.

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

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

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

Certain open source software is licensed pursuant to license agreements that require a user who distributes the open source software as a component of theuser’s software to disclose publicly part or all of the source code to the user’s software. This effectively renders what was previously proprietary software opensource software. As competition in our markets increases, we must reduce our product development costs. Many features we may wish to add to our products inthe future may be available as open source software and our development team may wish to make use of this software to reduce development costs and speed upthe development process. While we carefully monitor the use of all open source software and try to ensure that no open source software is used in such a way asto require us to disclose the source code to the related product, such use could inadvertently occur. Additionally, if a third party has incorporated certain types ofopen source software into its software but has failed to disclose the presence of such open source software and we embed that third party software into one ormore of our products, we could, under certain circumstances, be required to disclose the source code to our product. This could have a material adverse effect onour business.

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

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

Developing and maintaining different software products could place a significant strain on our resources and software product release schedules, whichcould harm our revenue and financial condition. If we are not able to

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Table of Contentsdevelop software for accepted platforms, standards and technologies, our license and service revenues and our gross margins could be adversely affected. Inaddition, if the platforms, standards and technologies we have developed software for are not accepted, our license and service revenues and our gross marginscould be adversely affected.

If we fail to manage our exposure to global financial and securities market risk successfully, our operating results and financial statements could bematerially impacted.

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

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

A significant portion of our net revenue and expenses are transacted in U.S. dollars. However, some of these activities are conducted in other currencies,primarily currencies in EMEA and Asia. As a response to the risks of changes in value of foreign currency denominated transactions, we may enter into foreigncurrency forward contracts or other instruments, the majority of which mature within approximately one month. Our foreign currency forward contracts reduce,but do not eliminate, the impact of currency exchange rate movements. For example, we do not execute forward contracts in all currencies in which we conductbusiness. Accordingly, such amounts denominated in foreign currencies may fluctuate in value and produce significant earnings and cash flow volatility.

We may have exposure to additional tax liabilities.

As a multinational corporation, we are subject to income taxes as well as non-income based taxes, in both the United States and various foreignjurisdictions. Significant judgment is required in determining our global provision for income taxes and other tax liabilities. In the ordinary course of a globalbusiness, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. We are regularly under audit by taxauthorities.

Although we believe that our tax estimates are reasonable, we cannot assure that the final determination of tax audits or tax disputes will not be differentfrom what is reflected in our historical income tax provisions and accruals.

We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes, in both the UnitedStates and various foreign jurisdictions. We are regularly under audit by tax authorities with respect to these non-income taxes and may have exposure toadditional non-income tax liabilities.

We operate internationally and face risks attendant to those operations.

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

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Table of Contentsrequirements and compliance with international and local trade, labor and other laws. We may also face difficulties in managing our international operations,collecting receivables in a timely fashion and repatriating earnings. Any of these factors, either individually or in combination, could materially impact ourinternational operations and adversely affect our business as a whole.

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

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

• potential customers may delay purchases;

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

• our reputation in the marketplace may be damaged;

• we may have to defend product liability claims;

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

• we may incur additional service and warranty costs; and

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

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

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

Note 12 to our Consolidated Financial Statements describes the litigation pending against us and our directors and officers. The uncertainty associated withsubstantial unresolved lawsuits could harm our business, financial condition and reputation. The defense of the lawsuits could result in the diversion of ourmanagement’s time and attention away from business operations, which could harm our business. Negative developments with respect to the lawsuits couldcause our stock price to decline. In addition, although we are unable to determine the amount, if any, that we may be required to pay in connection with theresolution of the lawsuits by settlement or otherwise, any such payment could seriously harm our financial condition and liquidity.

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

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

Our stock price may be volatile, which could cause investors to lose all or part of their investments in our stock.

The stock market in general and the stock prices of technology companies in particular, have experienced volatility which has often been unrelated to theoperating performance of any particular company or companies.

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Table of ContentsDuring fiscal year 2007, our stock price fluctuated between a high of $10.45 and a low of $6.72. If market or industry-based fluctuations continue, our stock pricecould decline in the future regardless of our actual operating performance and investors could lose all or part of their investments.

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

We may wish to expand our customer base into markets in which we have limited experience. In some cases, customers in different markets, such asfinancial services or government, have specific regulatory or other requirements which we must meet. For example, in order to maintain contracts with the U.S.government, we must comply with specific rules and regulations relating to and that govern such contracts. Government contracts are generally subject to auditsand investigations which could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portionof fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business. If we fail to meet suchrequirements in the future, we could be subject to civil or criminal liability or a reduction of revenue which could harm our business, operating results andfinancial condition.

Reuters has a royalty free license to our products.

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

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

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

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal administrative, sales, marketing, service and research and development facilities are located in a four building campus totalingapproximately 292,000 square feet in Palo Alto, California, which we purchased in June 2003. In connection with the purchase, we entered into a 51-year leaseof the land upon which the buildings are located. Further information on the terms of the building acquisition can be found in “Management’s Discussion andAnalysis of Financial Condition and Results of Operation” and Note 6 to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

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Table of ContentsIn addition to our Palo Alto campus, we lease field support offices in approximately 60 cities throughout the world. Lease terms range from

month-to-month on certain offices to ten years on certain direct leases. We are continuously evaluating the adequacy of existing facilities and additional facilitiesin new cities, and we believe that suitable additional space will be available in the future on commercially reasonable terms as needed.

We have certain facilities under lease that are in excess of our requirements that we no longer occupy and do not intend to occupy. Currently, the majorityof these vacated facilities are occupied by our tenants; however, the subleases will expire in various lengths. The estimated loss on excess facilities net ofsublease income has been included in the accrued excess facilities costs on the Consolidated Balance Sheets as of November 30, 2007 and 2006.

ITEM 3. LEGAL PROCEEDINGS

See Note 12 to our Consolidated Financial Statements, included in this Annual Report on Form 10-K, for information responsive to this item.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2007.

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Table of ContentsPART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES

Market Information

Our common stock is quoted on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “TIBX.” The following table presents, for theperiods indicated, the high and low intra-day sale prices per share of our common stock during the fiscal quarters indicated, as reported on NASDAQ.

Fiscal Year 2006 High LowFirst Quarter (from December 1, 2005 to March 5, 2006) $ 9.02 $ 7.05Second Quarter (from March 6, 2006 to June 4, 2006) $ 8.99 $ 7.37Third Quarter (from June 5, 2006 to September 3, 2006) $ 8.06 $ 6.44Fourth Quarter (from September 4, 2006 to November 30, 2006) $ 9.70 $ 7.73

Fiscal Year 2007 High LowFirst Quarter (from December 1, 2006 to March 4, 2007) $ 10.45 $ 8.61Second Quarter (from March 5, 2007 to June 3, 2007) $ 9.72 $ 8.18Third Quarter (from June 4, 2007 to September 2, 2007) $ 9.38 $ 6.97Fourth Quarter (from September 3, 2007 to November 30, 2007) $ 9.25 $ 6.72

Holders of Record

We had 1,438 stockholders of record as of January 15, 2008.

Dividends

We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future.

Equity Compensation Plan Information

The following table sets forth information about our common stock that may be issued upon the exercise of options, warrants and rights under all of ourexisting equity compensation plans as of November 30, 2007.

Plan Category

Number of Securities to be

Issued Upon Exercise of

Outstanding Options,

Warrants and Rights(a)

Weighted-Average

Exercise Price of

Outstanding Options,

Warrants and Rights(b)

Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation Plans

(Excluding Securities Reflected

in Column (a))(c)

Equity compensation plans approved bysecurity holders 37,588,484 $ 8.26 28,665,742

Equity compensation plans not approved bysecurity holders(1)

49,905 $ 15.89 —

Total 37,638,389 $ 8.27 28,665,742

(1) Represents options assumed in connection with our acquisition of Talarian Corporation in 2002 and of Extensibility, Inc. in 2000.

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Table of ContentsPerformance Graph

The following graph compares the five-year cumulative total return to stockholders on our common stock for the period ending November 30, 2007, withthe cumulative total return of the NASDAQ Composite Index and the S&P Information Technology Index. The graph assumes that $100.00 was invested onNovember 30, 2002 in each of our common stock, the NASDAQ Composite Index and the S&P Information Technology Index, and that all dividends werereinvested. No cash dividends have been declared or paid on our common stock. The comparisons in the table are required by the SEC and are not intended toforecast or be indicative of possible future performance of our common stock.

As of November 30, 2002 2003 2004 2005 2006 2007TIBCO SOFTWARE INC $ 100.00 $ 79.58 $ 156.44 $ 113.86 $ 126.65 $ 106.52NASDAQ COMPOSITE INDEX $ 100.00 $ 131.29 $ 143.07 $ 152.68 $ 169.28 $ 185.62S&P INFORMATION TECHNOLOGY INDEX $ 100.00 $ 122.73 $ 125.63 $ 134.42 $ 143.38 $ 162.10

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Table of Contents

ITEM 6. SELECTED FINANCIAL DATA

The selected consolidated financial data below have been derived from our audited financial statements. The following table should be read in conjunctionwith “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our Consolidated Financial Statements and notes theretoincluded elsewhere in this Annual Report on Form 10-K. The historical results presented below are not indicative of any future results.

All amounts presented in the table below are stated in thousands, except for per share data.

Year Ended November 30, 2007(1) 2006(1) 2005 2004 2003 Statements of Operations: Revenue $ 577,386 $ 517,279 $ 445,910 $ 387,220 $ 264,210 Cost of revenue 158,901 133,681 124,193 93,197 63,485

Gross profit 418,485 383,598 321,717 294,023 200,725 Operating expenses 355,528 311,242 263,643 223,273 198,249

Income from operations 62,957 72,356 58,074 70,750 2,476 Interest and other income, net 17,266 21,373 11,718 5,736 16,212 Interest expense (2,824) (3,171) (2,711) (2,771) (1,205)

Income before income taxes 77,399 90,558 67,081 73,715 17,483 Provision for (benefit from) income taxes 25,401 17,694 (5,474) 28,795 6,043 Minority interest, net of tax 110 — — — —

Net income $ 51,888 $ 72,864 $ 72,555 $ 44,920 $ 11,440

Total stock-based compensation included in cost of revenue and operatingexpenses $ 17,563 $ 15,818 $ 129 $ 243 $ 1,063

Net income per share: Basic $ 0.26 $ 0.35 $ 0.34 $ 0.22 $ 0.05

Diluted $ 0.25 $ 0.33 $ 0.32 $ 0.20 $ 0.05

Shares used to compute net income per share: Basic 198,885 209,538 213,263 207,506 211,555

Diluted 205,316 218,075 223,977 220,927 221,519

As of November 30, 2007 2006 2005 2004 2003Balance Sheet Data: Cash, cash equivalents and short-term investments $ 265,771 $ 539,570 $ 477,638 $ 473,535 $ 604,669Working capital 238,894 529,000 458,685 439,090 549,719Total assets 1,198,459 1,226,359 1,122,424 1,082,811 943,259Long-term debt 46,482 48,345 50,143 51,851 53,477Stockholders’ equity 855,396 946,007 873,619 820,482 762,794

(1) In fiscal years 2007 and 2006, the amounts include the effect of the adoption of SFAS No. 123(R).

We acquired Spotfire and Staffware plc in June 2007 and 2004, respectively. Our Consolidated Results of Operations have included incremental revenueand costs related to the acquirees’ operations since their dates of acquisition.

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Table of Contents

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

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

Executive Overview

We are a leading provider of infrastructure software. We provide a broad range of standards-based infrastructure software solutions that help organizationsachieve the benefits of real-time business. Our infrastructure software gives customers the ability to constantly innovate by connecting applications and data in aservice-oriented architecture, streamlining activities through business process management, and giving people the information and intelligence tools they need tomake faster and smarter decisions, what we call The Power of Now®.

As the basis of the real-time movement of data across the enterprise, TIBCO’s software is uniquely capable of correlating information in real-time aboutan organization’s operations and performance with information about expected behavior and business rules so a company can anticipate and respond to threatsand opportunities before they occur. Our software enables our customers to leverage and extend the capabilities of their own information technology applicationsand assets to move towards a new way of doing business that lets organizations anticipate customer needs, create opportunities and avoid potential problems.

We are the successor to a portion of the business of Teknekron Software Systems, Inc. (“Teknekron”). Teknekron developed software, known as TheInformation Bus® (“TIB”) technology, for the integration and delivery of market data, such as stock quotes, news and other financial information, in tradingrooms of large banks and financial services institutions. In 1992, Teknekron expanded its development efforts to include solutions designed to enable complexand disparate manufacturing equipment and software applications, primarily in the semiconductor fabrication market, to communicate within the factoryenvironment. Teknekron was acquired by Reuters Group PLC (“Reuters”), the global information company, in 1994. Following the acquisition, continueddevelopment of the TIB® technology was undertaken to expand its use in the financial services markets.

In January 1997, TIBCO was established as an entity separate from Teknekron. We were formed to create and market software solutions for use in theintegration of business information, processes and applications. In connection with our establishment as a separate entity, Reuters transferred to us certain assetsand liabilities related to our business and granted to us a royalty-free license to the intellectual property from which some of our messaging software productsoriginated.

We have acquired a range of companies and technologies. Most recently, in June 2007, we acquired Spotfire Holdings Inc. (“Spotfire”), a leading providerof next-generation business intelligence software with approximately 200 employees worldwide. The addition of Spotfire’s software is a natural extension of ourbusiness strategy that allows us to offer customers next-generation business intelligence solutions for faster data

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Table of Contentsaccess and analysis. Spotfire enables business users to access the most relevant and timely data, in a responsive and easy to use environment, so they can discovernew insights, make better decisions and take action—delivering an information advantage. Our acquisition of Spotfire also increased our distribution capabilitiesthrough an expanded customer and partner base.

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

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

First-year maintenance typically is sold with the related software license and renewed on an annual basis thereafter. Maintenance revenue is determinedbased on vendor-specific objective evidence of fair value and amortized over the term of the maintenance contract, typically 12 months. Consulting and trainingrevenues are typically recognized as the services are performed, which services are usually performed on a time and materials basis. Such services primarilyconsist of implementation services related to the installation of our products and generally do not include significant customization to or development of theunderlying software code.

Our revenue is generally derived from a diverse customer base. No single customer represented greater than 10% of total revenue in fiscal years 2007,2006 or 2005. As of November 30, 2007 and 2006, no single customer had a balance in excess of 10% of our net accounts receivable. We establish allowancesfor doubtful accounts based on our evaluation of collectability and an allowance for returns and discounts based on specifically identified credits and historicalexperience.

Critical Accounting Policies, Judgments and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have beenprepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires usto make estimates, assumptions and judgments that can have significant impact on the reported amounts of assets and liabilities, revenues and expenses, andrelated disclosure of contingent assets and liabilities at the date of our financial statements. We base our estimates, assumptions and judgments on historicalexperience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under differentassumptions or conditions. On a regular basis we evaluate our estimates, assumptions and judgments and make changes accordingly. We also discuss our criticalaccounting estimates with the Audit Committee of our Board of Directors. We believe that the estimates, assumptions and judgments involved in revenuerecognition, allowances for doubtful accounts, returns and discounts, stock-based compensation, valuation and impairment of investments, impairment ofgoodwill, intangible assets and long-lived assets, restructuring and integration costs and accounting for income taxes have the greatest potential impact on ourConsolidated Financial Statements, so we consider these to be our critical accounting policies.

We discuss below the critical accounting estimates associated with these policies. Historically, our estimates, assumptions and judgments relative to ourcritical accounting policies have not differed materially from actual results. For further information on our significant accounting policies, see the discussion inNote 2 to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

Revenue Recognition. We recognize license revenue when a signed contract or other persuasive evidence of an arrangement exists, the software has beenshipped or electronically delivered, the license fee is fixed or determinable, and collection of the resulting receivable is reasonably assured. When contractscontain multiple

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Table of Contentselements wherein vendor-specific objective evidence exists for all undelivered elements, we account for the delivered elements in accordance with the “ResidualMethod” prescribed by the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 98-9. We recognize revenue onshipments to resellers, which is generally subject to certain rights of return and price protection when the reseller sells the products to an end-user customer andwe record revenue net of related costs to the resellers. Provided all other revenue criteria are met, the upfront, minimum, non-refundable license fees from OEMcustomers are generally recognized upon delivery and on-going royalty fees are generally recognized upon reports of units shipped.

We assess whether the fee is fixed or determinable and collection is probable at the time of the transaction. In determining whether the fee is fixed ordeterminable, we compare the payment terms of the transaction to our normal payment terms. If a significant portion of a fee is due after our normal paymentterms, we account for the fee as not being fixed or determinable and recognize revenue as the payments become due. We assess whether collection is reasonablyassured based on a number of factors, including the customer’s past transaction history and credit-worthiness. Generally, we do not request collateral from ourcustomers. If we determine that collection of a fee is not reasonably assured, we defer the fee and recognize revenue at the time collection becomes reasonablyassured, which is generally upon receipt of cash.

First-year maintenance typically is sold with the related software license and renewed on an annual basis thereafter. For such arrangements with multipleelements, we allocate revenue to each component of the arrangement based on the Residual Method. Fair values of ongoing maintenance and support obligationsare based on separate sales of renewals to other customers or upon renewal rates quoted in the contracts when the quoted renewal rates are deemed to besubstantive. Maintenance revenue is deferred and recognized ratably over the term of the maintenance and support period. Fair value of services, such asconsulting or training, is based upon separate sales of these services. When the renewal period for maintenance is not substantive compared to the term of thelicense, we recognize the entire arrangement fee ratably over the term.

Many customers who license our software also enter into separate professional services arrangements with us. In determining whether professionalservices revenue should be accounted for separately from license revenue, we evaluate, among other factors, the nature of our software products, whether theyare ready for use by the customer upon receipt, the nature of our implementation services, which typically do not involve significant customization to ordevelopment of the underlying software code, the availability of services from other vendors, whether the timing of payments for license revenue is coincidentwith performance of services and whether milestones or acceptance criteria exist that affect the realizability of the software license fee. Substantially all of ourprofessional services arrangements are billed on a time and materials basis and accordingly, are recognized as the services are performed. Contracts with fixed ornot to exceed fees are recognized on a proportional performance basis. If there is significant uncertainty about the project completion or receipt of payment forprofessional services, revenue is deferred until the uncertainty is sufficiently resolved. We recognize training revenue as training services are delivered.

For arrangements that do not qualify for separate accounting for the license and professional services revenues, including arrangements that involvesignificant modification or customization of the software, that include milestones or customer specific acceptance criteria that may affect collection of thesoftware license fees, or where payment for the software license is tied to the performance of professional services, software license revenue is generallyrecognized together with the professional services revenue using either the percentage-of-completion or completed-contract method. Under thepercentage-of-completion method, the revenue recognized is equal to the ratio of costs expended to date to the anticipated total contract costs, based on currentestimates of costs to complete the project. If the total estimated costs to complete a project exceed the total contract amount, indicating a loss, the entireanticipated loss would be recognized currently.

Significant management judgments and estimates must be made in connection with determination of the revenue to be recognized in any accountingperiod. If we made different judgments or utilized different estimates for any period, material differences in the amount and timing of revenue recognized couldresult.

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Table of ContentsAllowances for Doubtful Accounts, Returns and Discounts. We establish allowances for doubtful accounts, returns and discounts based on our review of

credit profiles of our customers, contractual terms and conditions, current economic trends and historical payment, return and discount experience. We reassessthe allowances for doubtful accounts, returns and discounts each period. Historically, our actual losses and credits have been consistent with these provisions.However, unexpected events or significant future changes in trends could result in a material impact to our future statements of operations and of cash flows. Ifwe made different judgments or utilized different estimates for any period, material differences in the amount and timing of revenue or bad debt expenserecognized could result. Our allowances for doubtful accounts, returns and discounts as a percentage of net revenues were approximately 1% in fiscal years 2007,2006 and 2005. See Note 5 to our Consolidated Financial Statements for a summary of activities during the years reported.

Stock-Based Compensation. We account for stock-based compensation related to stock-based transactions in accordance with the provisions of Statementof Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), Share-Based Payment, (“SFAS No. 123(R)”). Under the fair value recognition provisionsof SFAS No. 123(R), stock-based payment expense is estimated at the grant date based on the fair value of the award and is recognized as expense ratably overthe requisite service period of the award. Determining the appropriate fair value model and calculating the fair value of stock-based awards requires judgment,including estimating stock price volatility, forfeiture rates and expected life.

Upon adoption of SFAS No. 123(R) on December 1, 2005, we selected the Black-Scholes option pricing model as the most appropriate method fordetermining the estimated fair value for stock-based awards. The Black-Scholes model requires the use of highly subjective and complex assumptions whichdetermine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. Our current estimate ofvolatility is based on a blend of average historical and market-based implied volatilities of our stock price. To the extent volatility of our stock price increases inthe future, our estimates of the fair value of options granted in the future could increase, thereby increasing stock-based payment expense in future periods. Inaddition, we apply an expected forfeiture rate when amortizing stock-based payment expense. Our estimate of the forfeiture rate is based primarily upon ourhistorical experience. To the extent we revise this estimate in the future, our stock-based payment expense could be materially impacted in the quarter of revision,as well as in following quarters. We derived the expected term assumption based on our historical settlement experience, while giving consideration to optionsthat have life cycles less than the contractual terms and vesting schedules in accordance with guidance in SFAS No. 123(R) and Staff Accounting Bulletin(“SAB”) No. 107. In the future, as empirical evidence regarding these input estimates is available to provide more directionally predictive results, we may changeor refine our approach of deriving these input estimates. These changes could impact our fair value of stock options granted in the future. See Note 2 and Note 14to our Consolidated Financial Statements for further details.

Valuation and Impairment of Investments. We determine the appropriate classification of marketable securities at the time of purchase and evaluate suchdesignation as of each balance sheet date. As of November 30, 2007, all our marketable securities have been classified as available-for-sale and are carried at fairvalue with unrealized gains and losses, if any, included as a component of “Accumulated Other Comprehensive Income” in stockholders’ equity. Marketablesecurities are presented as current assets as they are subject to use within one year in current operations. Realized gains and losses are recognized based on the“specific identification method.” As of November 30, 2007, gross unrealized losses on our investment portfolio totaled $0.3 million. The change in value of theseinvestments is primarily related to changes in interest rates and credit ratings of the issuers and is considered temporary in nature.

Our investments also include minority equity investments in privately held companies that are generally carried at cost basis and included in other assetson the balance sheet. The fair value of these investments is dependent on the performance of the companies in which we invested, as well as the volatilityinherent in external markets for these investments. In assessing potential impairment, we consider these factors as well as each of the companies’ cash position,earnings/revenue outlook, liquidity and management/ownership. If we

23


Table of Contentsbelieve that an other-than-temporary decline exists, we write down the investment to market value and record the related write-down as a loss on investments inour Consolidated Statements of Operations. In fiscal years 2007, 2006 and 2005, we did not recognize any impairment losses associated with minority equityinvestments. As of November 30, 2007, the net carrying value of our minority equity investments totaled $0.9 million.

Significant management judgment is required in determining whether an other-than-temporary decline in the value of our investments exists. Estimatingthe fair value of non-marketable equity investments in early-stage technology companies is inherently subjective. Changes in our assessment of the valuation ofour investments could materially impact our operating results and financial position in future periods if anticipated events and key assumptions do not materializeor change.

Impairment of Goodwill, Intangible Assets and Long-Lived Assets. Our goodwill and intangible assets result from our corporate acquisition transactions.In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, which we adopted on December 1, 2002, goodwill and intangible assets with indefiniteuseful lives are no longer amortized, but are instead tested for impairment at least annually or as circumstances indicate their value may no longer be recoverable.We do not carry any intangible assets with indefinite useful lives other than goodwill. We generally perform our annual impairment test at the end of the fiscalyear. As we operate our business in one reporting segment, our goodwill is tested for impairment at the enterprise level. Goodwill impairment testing is atwo-step process. For the first step, we screen for impairment, and if any possible impairment exists, we undertake a second step of measuring such impairment.We periodically re-evaluate our business and have determined that we continue to operate in one segment, which we consider our sole reporting unit. If ourassumptions change in the future, we may be required to record impairment charges to reduce the carrying value of our goodwill. Changes in the valuation ofgoodwill could materially impact our operating results and financial position.

We evaluate the recoverability of our long-lived assets including amortizable intangible and tangible assets in accordance with SFAS No. 144, Accountingfor the Impairment or Disposal of Long-Lived Assets. When events or changes in circumstances indicate that the carrying amount of long-lived assets may not berecoverable, we recognize such impairment in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets.Our acquired intangible assets with definite useful lives are amortized on a straight line basis over their useful lives, and periodically tested for impairment. Wehave not recorded any impairment losses to date. As of November 30, 2007, we had $412.3 million of goodwill, $111.4 million of property and equipment and$110.9 million of acquired intangible assets. If our estimates or the related assumptions change in the future, we may be required to record impairment charges toreduce the carrying value of these assets. Changes in the valuation of long-lived assets could materially impact our operating results and financial position.

Restructuring and Integration Costs. Our restructuring charges are comprised primarily of costs related to properties abandoned in connection withfacilities consolidation, related write-downs of leasehold improvements and severance and associated employee termination costs related to headcountreductions. For restructuring actions initiated prior to December 31, 2002, we followed the guidance provided by Emerging Issues Task Force (“EITF”) IssueNo. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity. We recorded the liability related to thesetermination costs when the plan was approved; the termination benefits were determined and communicated to the employees; the number of employees to beterminated, their locations and job were specifically identified; and the period of time to implement the plan was set. For restructuring actions initiated afterJanuary 1, 2003, we adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which requires that a liability for costs associatedwith an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred.

Our restructuring charges included accruals for estimated losses on facility costs based on our contractual obligations net of estimated sublease incomebased on current comparable market rates for leases. We reassess this liability periodically based on market conditions. Revisions to our estimates of this liabilitycould materially impact our operating results and financial position in future periods if anticipated events and key assumptions, such as the timing and amounts ofsublease rental income, either do not materialize or change.

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Table of ContentsAccounting for Income Taxes. We make certain estimates and judgments in determining income tax expense for financial statement purposes. These

estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue andexpense for tax and financial statement purposes.

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

We assess the likelihood that we will be able to recover our deferred tax assets. We consider all available evidence, both positive and negative, includinghistorical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies inassessing the need for a valuation allowance. If it is not more likely than not that we will recover our deferred tax assets, we will increase our provision for taxesby recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. The available positive evidence atNovember 30, 2007, included five years of historical operating profits and a projection of future income sufficient to realize most of our remaining deferred taxassets. We recorded a valuation allowance release of $1.6 million in fiscal year 2007, primarily due to the ability to claim foreign tax credits against our foreignsource income. As of November 30, 2007, it was considered more likely than not that our deferred tax assets would be realized with the exception of certaincapital loss and foreign tax credit carryovers as we cannot forecast sufficient future capital gains or foreign source income to realize these deferred tax assets. Theremaining valuation allowance of approximately $9.1 million as of November 30, 2007, will result in an income tax benefit if and when we conclude it is morelikely than not that the related deferred tax assets will be realized.

As of November 30, 2007, we believed that the amount of deferred tax assets recorded on our balance sheet would ultimately be recovered. However,should there be a change in our ability to recover our deferred tax assets, our tax provision would increase in the period in which we determine that it is morelikely than not that we cannot recover our deferred tax assets. If we have to re-establish a full valuation allowance against our deferred tax assets, it would resultin an increase of $30.3 million to income tax expense.

U.S. income taxes and foreign withholding taxes have not been provided on a cumulative total of $34.0 million of undistributed earnings for certainnon-U.S. subsidiaries. With the exception of our subsidiaries in the United Kingdom, net undistributed earnings of our foreign subsidiaries are generallyconsidered to be indefinitely reinvested, and accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of these earnings inthe form of dividends or otherwise, we will be subject to U.S. income taxes net of available foreign tax credits associated with these earnings.

While we have not experienced and do not expect any impact to the effective tax rate for U.S. non-qualified stock option or restricted stock expense due tothe adoption of SFAS No. 123(R), the effective tax rate has been and may be negatively impacted by foreign stock option expense that may not be deductible inthe foreign jurisdictions. Also, SFAS No. 123(R) requires that the tax benefit of stock option deductions relating to incentive stock options be recorded in theperiod of disqualifying disposition. This could result in significant fluctuations in our effective tax rate between accounting periods.

See Note 17 to our Consolidated Financial Statements.

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Table of ContentsResults of Operations

The following table presents certain Consolidated Statements of Operations data as percentages of total revenue for the periods indicated:

Year Ended November 30, 2007 2006 2005 Revenue:

License revenue: Non-related parties 45% 46% 42%Related parties — — 4

Total license revenue 45 46 46

Service and maintenance revenue: Non-related parties 54 53 51 Related parties — — 2 Reimbursable expenses 1 1 1

Total service and maintenance revenue 55 54 54

Total revenue 100 100 100

Cost of revenue: License 4 3 3 Service and maintenance 24 23 25

Total cost of revenue 28 26 28

Gross profit 72 74 72

Operating expenses: Research and development 16 17 16 Sales and marketing 34 32 32 General and administrative 9 9 8 Restructuring charge (adjustment) — — 1 Amortization of acquired intangible assets 2 2 2 Acquired in-process research and development — — —

Total operating expenses 61 60 59

Income from operations 11 14 13 Interest income 3 4 3 Interest expense (1) (1) (1)Other income (expense), net — — —

Income before income taxes 13 17 15 Provision for (benefit from) income taxes 4 3 (1)

Net income 9% 14% 16%

In June 2007, we acquired Spotfire, a leading provider of next-generation business intelligence software, which is now part of our business optimizationproduct line. Our Consolidated Results of Operations have included incremental revenue and costs related to the Spotfire operations since the date of acquisition.

With the acquisition of Spotfire, TIBCO gained approximately 200 employees, based primarily in the United States and Sweden. In connection with theacquisition, we have incurred additional expenses, including amortization of intangible assets and acquired technology, acquired in-process research anddevelopment (“IPR&D”) costs, stock-based compensation, personnel and related costs, facility and infrastructure costs and other charges. As a result of theseexpenses, costs and charges, the acquisition is dilutive to earnings in fiscal year 2007.

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Table of ContentsAll amounts presented in the tables in the Results of Operations are stated in thousands of dollars, except percentages and unless otherwise stated.

Total Revenue

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

Year Ended November 30, Percentage

Change

2007 2006 2005 2006

to 2007 2005

to 2006 Total revenue $ 577,386 $ 517,279 $ 445,910 12% 16%

Total revenue in fiscal year 2007 compared to fiscal year 2006 increased by $60.1 million or 12%. The increase was primarily due to a $19.2 million or8% increase in license revenue and a $40.9 million or 15% increase in service and maintenance revenue. Geographically, we experienced growth in total revenuefrom all major regions in fiscal year 2007. In particular, we had a high percentage rate of growth in revenue from EMEA. Our total revenue increased by $14.4million or 5% in the Americas, $41.1 million or 21% in EMEA and $4.6 million or 7% in APJ in fiscal year 2007. See Note 21 to our Consolidated FinancialStatements for further details on total revenue by region.

Reuters was considered a related party in the first nine months of fiscal year 2005, but during that year, Reuters reduced its holdings such that as ofNovember 30, 2005, Reuters owned less than 1% of our outstanding common stock. Beginning in the fourth quarter of fiscal year 2005, Reuters was no longerconsidered a related party. We recognized the initial $9.9 million upfront, minimum, non-refundable license fee pursuant to an agreement with Reuters as relatedparty license revenue in the first quarter of fiscal year 2005. Another $1.1 million under this agreement represented maintenance fees and was recognized ratablyover the one year maintenance period.

We had no single customer that accounted for more than 10% of total revenue in fiscal years 2007, 2006 or 2005. Our products are licensed by companiesworldwide in diverse industries, and a high percentage of our customers are from the financial service, telecommunication and energy sectors.

Total revenue in fiscal year 2006 compared to fiscal year 2005 increased by $71.4 million or 16%. The increase was primarily due to a $36.2 million or18% increase in license revenue and a $35.2 million or 15% increase in service and maintenance revenue. Geographically, our total revenue increased by $32.0million or 14% in the Americas, $25.4 million or 15% in EMEA and $14.0 million or 30% in APJ in fiscal year 2006.

License Revenue and Costs


Change

2007 2006 2005 2006

to 2007 2005

to 2006 License revenue $ 259,313 $ 240,071 $ 203,888 8% 18%

Percentage of total revenue 45% 46% 46% Cost of license revenue $ 24,024 $ 15,936 $ 12,694 51% 26%

Percentage of total revenue 4% 3% 3% Percentage of license revenue 9% 7% 6%

We license a wide range of products to customers in various industries and geographic regions. License revenue increased by $19.2 million or 8% in fiscalyear 2007 compared to fiscal year 2006, primarily due to an

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Table of Contentsincrease in revenue from the financial services, channel and retail sectors, partially offset by a decrease in revenue from the government sector. License revenueincreased by $36.2 million or 18% in fiscal year 2006 compared to fiscal year 2005, primarily due to an increase in revenue from the telecommunications,government and energy sectors, partially offset by a decrease in revenue from the financial services sector.

Our license revenue in fiscal years 2007, 2006 and 2005 was derived from the following three product lines: SOA, business optimization and BMP. Theapproximate percentages of total license revenue for the three periods was: 2007, 65% from SOA, 19% from business optimization and 16% from BPM; 2006,71% from SOA, 11% from business optimization and 18% from BPM; 2005, 72% from SOA, 9% from business optimization and 19% from BPM. The fiscalyear 2007 increase in the percentage of license revenue derived from business optimization was primarily attributable to the Spotfire acquisition.

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

Year Ended November 30, 2007 2006 2005 Number of license deals of $1.0 million or more 54 59 42Number of license deals over $0.1 million 376 334 316Average size of license deals over $0.1 million (in millions) $ 0.6 $ 0.7 $ 0.6

Our total license revenue in any particular period is to a certain extent dependent on the size and timing of larger license deals. We currently expect thenumber of license transactions over $0.1 million to increase in fiscal year 2008, while the size and timing of multi-million dollar transactions is more difficult toforecast.

Cost of license revenue mainly consisted of royalty costs and amortization of developed technologies acquired through corporate acquisitions. Cost oflicense revenue increased by $8.1 million or 51% in fiscal year 2007 compared to fiscal year 2006, and increased by $3.2 million or 26% in fiscal year 2006compared to fiscal year 2005. The increase in fiscal year 2007 was primarily due to a $5.0 million increase in amortization of acquired technologies, mainlyassociated with the Spotfire acquisition, and a $2.7 million increase in royalty costs. The increase in fiscal year 2006 was primarily due to a $3.2 million increasein royalty costs.

Cost of license revenue is approximately 3% to 4% of total revenue and 6% to 9% of license revenue in fiscal years 2007, 2006 and 2005. As stated above,our fiscal year 2007 financial results included incremental revenue and costs attributable to the Spotfire operations.

We currently expect license revenue to be approximately 44% to 47% of our total revenue and cost of license revenue to increase in absolute dollars infiscal year 2008.

Service and Maintenance Revenue and Costs


Change

2007 2006 2005 2006

to 2007 2005

to 2006 Service and maintenance revenue $ 318,073 $ 277,208 $ 242,022 15% 15%

Percentage of total revenue 55% 54% 54% Cost of service and maintenance revenue $ 134,877 $ 117,745 $ 111,499 15% 6%

Percentage of total revenue 24% 23% 25% Percentage of service and maintenance revenue 42% 42% 46%

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Table of ContentsService and maintenance revenue increased $40.9 million or 15% in fiscal year 2007 compared to fiscal year 2006, and increased $35.2 million or 15% in

fiscal year 2006 compared to fiscal year 2005. The increase in fiscal year 2007 was the result of a $13.1 million increase in consulting and training servicesrevenue and a $27.8 million increase in maintenance revenue. The increase in fiscal year 2006 was due to an $8.6 million increase in consulting and trainingservices revenue and a $26.5 million increase in maintenance revenue. Consulting revenue increased due to an increase in both the number and breadth ofengagements, reflecting our increased focus on providing more services to customers. Maintenance revenue increased primarily due to continued growth in ourinstalled software base.

Cost of service and maintenance revenue consisted primarily of compensation for professional services, including stock-based compensation expense,customer support personnel, third-party contractors and associated expenses related to providing consulting services.

The cost of service and maintenance revenue increased as a percentage of total revenue in fiscal year 2007 compared to fiscal year 2006, as the relativeproportion of consulting revenue increased. The cost of service and maintenance revenue as a percentage of total revenue decreased in fiscal year 2006 comparedto fiscal year 2005, as a result of efforts to increase utilization of our consulting staff as well as an increase in the relative proportion of maintenance revenue. The$17.1 million or 15% increase in fiscal year 2007 compared to fiscal year 2006 resulted primarily from an increase of $11.0 million in employee-relatedexpenses, an increase of $3.7 million in subcontractors costs, an increase of $1.1 million in information technology related expenses and an increase of $1.0million in facilities expenses. The $6.2 million or 6% increase in fiscal year 2006 compared to fiscal year 2005 resulted primarily from an increase ofapproximately $8.9 million in employee-related expenses, which included a $2.1 million increase in stock-based compensation expenses, was partially offset by a$2.6 million decrease in subcontractors costs and a $0.4 million decrease in information technology related expenses. Increased employee-related expenses wereprimarily due to an increase in professional services and customer support staff during fiscal years 2007 and 2006. Increased subcontractors costs were alsodirectly related to increased service revenue in fiscal year 2007.

We currently expect service and maintenance revenue to be approximately 53% to 56% of total revenue and the cost of service and maintenance revenue toincrease in absolute dollars in fiscal year 2008.

Research and Development Expenses

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

Year Ended November 30, Percentage Change

2007 2006 2005 2006

to 2007 2005

to 2006 Research and development expenses $ 92,924 $ 85,923 $ 73,136 8% 17%

Percentage of total revenue 16% 17% 16%

Total research and development expenses increased by $7.0 million or 8% in fiscal year 2007 compared to fiscal year 2006 and was primarily due to a $3.4million increase in employee-related expenses primarily attributable to the Spotfire acquisition, a $1.8 million increase in contractor expenses, a $1.1 millionincrease in facilities expenses and a $0.6 million increase in information technology related expenses.

The $12.8 million or 17% increase in research and development expenses in fiscal year 2006 compared to fiscal year 2005 was primarily due to a $12.5million increase in employee-related expenses and a $0.8 million increase in facilities expenses, which were partially offset by a $0.6 million decrease incontractor expenses. The increase in personnel expenses was due to added headcount, a $3.6 million increase in stock-based compensation expenses, and annualsalary adjustments.

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Table of ContentsSales and Marketing Expenses

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


Change

2007 2006 2005 2006

to 2007 2005

to 2006 Sales and marketing expenses $ 197,397 $ 172,768 $ 140,370 14% 23%


Total sales and marketing expenses increased by $24.6 million or 14% in fiscal year 2007 compared to fiscal year 2006 and was primarily due to a $22.1million increase in employee-related expenses, a $2.1 million increase in travel expenses and a $0.4 million increase in marketing programs. The increase inemployee-related expenses was due to an increase in headcount mainly attributable to the Spotfire acquisition, annual salary adjustments and $2.1 millionincrease in sales commissions. The increases in travel expenses and marketing programs were due to increased marketing activities and their related travel costs.Our fiscal year 2007 sales and marketing expenses included incremental costs attributable to Spotfire operations.

The $32.4 million or 23% increase in sales and marketing expenses in fiscal year 2006 compared to fiscal year 2005 was primarily due to a $24.5 millionincrease in employee-related expenses, a $3.3 million increase in travel expenses and a $2.7 million increase in marketing programs. The increase inemployee-related expenses was due to a $14.6 million increase in sales commissions associated with an increase in revenue, increased average headcount, annualsalary adjustments and also a $4.5 million increase in stock-based compensation expenses. The increases in travel expenses and marketing programs were due toincreased marketing activities and their related travel costs.

We intend to increase staff in our direct sales organization and to increase our marketing efforts in the coming year, and accordingly, we currently expectthat sales and marketing expenses will increase in absolute dollars in fiscal year 2008.

General and Administrative Expenses

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


2007 2006 2005 2006

to 2007 2005

to 2006 General and administrative expenses $ 51,538 $ 44,139 $ 37,320 17% 18%


Total general and administrative expenses increased by $7.4 million or 17% in fiscal year 2007 compared to fiscal year 2006 and was primarily due a $3.2million increase in employee-related expenses, a $3.0 million increase in consulting expenses and a $1.1 million increase in fees and charges. The increase inemployee-related expenses was due to increased headcount and annual salary adjustments. The increase in consulting expenses was primarily due to theincreased use of contractors associated with the Spotfire integration and terminated acquisition activity. Our fiscal year 2007 general and administrative expensesincluded incremental costs attributable to Spotfire operations.

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Table of ContentsThe $6.8 million or 18% increase in general and administrative expenses in fiscal year 2006 compared to fiscal year 2005 was primarily due to a $9.1

million increase in employee-related expenses, which was partially offset by a $2.4 million decrease in consulting expenses. The increase in employee-relatedexpenses was due to increased headcount, annual salary adjustments and a $5.5 million increase in stock-based compensation expenses.

We currently expect that general and administrative expenses will increase in absolute dollars in fiscal year 2008.

Restructuring Charge (Adjustment)


2007 2006 2005 2006

to 2007 2005

to 2006 Restructuring charge (adjustment) $ (1,095) $ (1,042) $ 3,905 5% (127)%

Percentage of total revenue — % — % 1%

In the third quarter of fiscal year 2007 and the fourth quarter of fiscal year 2006, we recorded $1.1 million and $1.0 million credit adjustments to therestructuring charge related to properties vacated in connection with the consolidation of our facilities in fiscal year 2002. The adjustments resulted fromrevisions to our estimates of future sublease income due to the recovery of the applicable real estate market and the additions of new tenants. Currently, themajority of our vacated facilities under prior restructuring programs are occupied by our tenants. The estimated excess facilities expenses were based on ourcontractual obligations, net of estimated sublease income, based on current comparable rates for leases in their respective markets.

During fiscal year 2005, we initiated a restructuring plan designed to re-align our resources and cost structure, and accordingly recognized a restructuringcharge of approximately $3.9 million for the resulting workforce reduction. The restructuring plan eliminated 49 employees, across all functions and primarily inour European operations; this plan had been completed by the end of fiscal year 2006.

Also see Note 8 to our Consolidated Financial Statements for further discussion on restructuring charges.

Amortization of Acquired Intangible Assets

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


2007 2006 2005 2006

to 2007 2005

to 2006 Amortization of acquired intangible assets:

In cost of revenue $ 10,326 $ 5,322 $ 5,958 In operating expenses 13,164 9,454 8,912

Total amortization expenses $ 23,490 $ 14,776 $ 14,870 59% (1)%


The increase in amortization expenses in fiscal year 2007 compared to fiscal year 2006 was primarily due to the additional amortization related tointangible assets acquired in the acquisition of Spotfire in the third quarter of fiscal year 2007.

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Table of ContentsThe decrease in amortization of developed technologies included in cost of revenue in fiscal year 2006 compared to fiscal year 2005 was primarily due to

certain intangible assets acquired in earlier years that were fully amortized. The increase in amortization of other acquired intangible assets included in operatingexpenses in fiscal year 2006 compared to fiscal year 2005 was primarily due to the addition of acquired intangible assets recorded from the ObjectStar andVelosel acquisitions in fiscal year 2005. See Note 7 to our Consolidated Financial Statements for further details on acquired intangible assets.

Acquired In-Process Research and Development


2007 2006 2005 2006

to 2007 2005

to 2006Acquired in-process research and development $ 1,600 $ — $ — n/a n/a

Percentage of total revenue — % — % — %

In the third quarter of fiscal year 2007, in conjunction with our acquisition of Spotfire, we recorded acquired IPR&D charges of $1.6 million. Ourmethodology for allocating the purchase price relating to acquired IPR&D was determined through established valuation techniques. Acquired IPR&D wasexpensed upon acquisition as technological feasibility had not been established and no future alternate use existed.

Stock-Based Compensation

The stock-based compensation expenses included in our Consolidated Statements of Operations corresponding to the same functional lines as cashcompensation paid to the same employees in the respective departments are as follows:


2007 2006 2005 2006

to 2007 2005

to 2006 Stock-based compensation expenses:

Cost of license $ 31 $ 36 $ — Cost of service and maintenance 2,434 2,076 14

Total in cost of revenue 2,465 2,112 14 17% *%Research and development 3,712 3,612 10 Sales and marketing 5,695 4,617 104 General and administrative 5,691 5,477 1

Total in operating expenses 15,098 13,706 115 10% *%

Total $ 17,563 $ 15,818 $ 129 11% *%

Percentage of total revenue 3% 3% — %

* The percentages have been omitted as they are not meaningful for comparison purposes.

On December 1, 2005, we adopted SFAS No. 123(R), which requires recognition of compensation expense for all stock-based awards made to employeesin our Consolidated Statements of Operations. Prior to the adoption of SFAS No. 123(R), we accounted for stock-based awards to employees and directors usingthe intrinsic value method in accordance with APB No. 25 as allowed under SFAS No. 123. Under the intrinsic value method, we recognized stock-basedcompensation expense for the stock options granted prior to the initial public offering in our Consolidated Statements of Operations. Prior to fiscal year 2006, thestock-based compensation expense consisted mainly of compensation associated with non-employee equity awards, stock options assumed from businesscombinations and stock options granted before our initial public offering. In accordance with the modified prospective transition method we used in adoptingSFAS No. 123(R), our results of operations prior to fiscal year 2006 have not been restated to reflect, and do not include, the impact of SFAS No. 123(R).

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Table of ContentsStock-based compensation expense recorded prior to fiscal year 2006 was related to non-employee stock options, stock options granted prior to the initial

public offering and stock options we assumed from business acquisitions in prior years. Such stock-based compensation expenses in fiscal years 2007 and 2006were insignificant, and were included in the total stock-based compensation expenses above. Also see Note 14 to our Consolidated Financial Statements forfurther details on stock-based compensation.

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

Interest Income


2007 2006 2005 2006

to 2007 2005

to 2006 Interest income $ 18,447 $ 19,936 $ 13,318 (7)% 50%


The decrease in interest income in fiscal year 2007 compared to fiscal year 2006 was primarily due to lower average investment portfolio balancesprimarily as a result of the use of cash for the Spotfire acquisition and our stock repurchase program.

The increase in interest income in fiscal year 2006 compared to fiscal year 2005 was primarily due to interest income received from higher investmentyields and higher average investment portfolio balances.

Interest Expense


2007 2006 2005 2006

to 2007 2005

to 2006 Interest expense $ (2,824) $ (3,171) $ (2,711) (11)% 17%

Percentage of total revenue (1)% (1)% (1)%

Interest expense was primarily related to a $54.0 million mortgage note issued in connection with the purchase of our corporate headquarters. Themortgage note payable carries a 20-year amortization, and in the second quarter of fiscal year 2007, we amended the mortgage note payable such that it nowcarries a fixed annual interest rate of 5.50%. The balance of the mortgage note as of November 30, 2007, was $46.5 million. The $34.4 million principal balancethat will remain at the end of the ten-year term will be due as a final lump sum payment on July 1, 2013. See Note 9 to our Consolidated Financial Statements forfurther detail on the mortgage note payable.

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Table of ContentsOther Income (Expense), net

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


2007 2006 2005 2006

to 2007 2005

to 2006 Other income (expense):

Foreign exchange gain (loss) $ (1,502) $ 763 $ (1,445) Realized gain (loss) on short-term investments (312) 45 (275) Realized gain (loss) on long-term investments 64 738 — Other income (expense), net 569 (109) 120

Total other income (expense), net $ (1,181) $ 1,437 $ (1,600) (182)% (190)%

Percentage of total revenue — % — % — %

The decrease in other income (expense) in absolute dollars in fiscal year 2007 compared to fiscal year 2006 was primarily due to exchange ratesfluctuation on foreign currency transactions in fiscal year 2007.

The increase in other income (expense) in absolute dollars in fiscal year 2006 compared to fiscal year 2005 was primarily due to a $0.7 million gain fromthe sale of a long-term private equity investment and a $0.8 million in foreign exchange gains compared to losses in fiscal year 2005.

Income Taxes


Change

2007 2006 2005 2006

to 2007 2005

to 2006 Provision for (benefit from) income tax $ 25,401 $ 17,694 $ (5,474) 44% *%

Effective tax rate 33% 20% (8)%

* The percentage has been omitted as it is not meaningful for comparison purposes.

The effective tax rate was 32.8%, 19.5% and (8.2)% in fiscal years 2007, 2006 and 2005, respectively. The effective tax rate in fiscal year 2007 differedfrom the statutory rate of 35% primarily due to research and development credits and the tax benefit from the release of valuation allowance resulting from theability to claim foreign tax credits against our foreign source income which was partially offset by the tax impact of certain stock compensation charges underSFAS No. 123(R) and state income tax expense. The effective tax rate in fiscal year 2006 differed from the statutory rate of 35% primarily due to the tax benefitfrom the release of valuation allowance and the tax benefit from the Extraterritorial Income Exclusion which was partially offset by the tax impact of certainstock compensation charges under SFAS No. 123(R) and state income tax expense. In fiscal year 2005, the effective tax rate differed from the statutory rate of35% primarily due to the tax benefit from the partial release of valuation allowance.

In connection with the acquisition of Spotfire, we have recorded purchase accounting entries for current deferred tax assets of $4.1 million, currentdeferred tax liabilities of $17.3 million, long-term deferred tax assets of $11.9 million and long-term deferred tax liabilities of $18.7 million with a correspondingadjustment to goodwill. These deferred taxes were related to the acquired tangible and intangible assets, deferred revenue, pre-acquisition receivable and certaintax attributes of Spotfire. The IPR&D of $1.6 million that was expensed in fiscal year 2007 is not deductible for income tax purposes. This resulted in anunfavorable effective tax rate impact of 0.8% for the fiscal year ended November 30, 2007.

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Table of ContentsWe make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the

calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statementpurposes.

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

We assess the likelihood that we will be able to recover our deferred tax assets. We consider all available evidence, both positive and negative, includinghistorical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies inassessing the need for the valuation allowance. If it is not more likely than not that we will recover our deferred tax assets, we will increase our provision fortaxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. The available positive evidence atNovember 30, 2007, included five years of historical operating profits and a projection of future income sufficient to realize most of our remaining deferred taxassets. We recorded a valuation allowance release of $1.6 million in fiscal year 2007, primarily due to the ability to claim foreign tax credits against our foreignsource income. As of November 30, 2007, it was considered more likely than not that our deferred tax assets would be realized with the exception of certaincapital loss and foreign tax credit carryovers as we cannot forecast sufficient future capital gains or foreign source income to realize these deferred tax assets. Theremaining valuation allowance of approximately $9.1 million as of November 30, 2007, will result in an income tax benefit if and when we conclude it is morelikely than not that the related deferred tax assets will be realized.

As of November 30, 2007, we believed that the amount of deferred tax assets recorded on our balance sheet would ultimately be recovered. However,should there be a change in our ability to recover our deferred tax assets, our tax provision would increase in the period in which we determine that it is morelikely than not that we cannot recover our deferred tax assets. If we have to re-establish a full valuation allowance against our deferred tax assets, it would resultin an increase of $30.3 million to income tax expense.

Our income taxes payable for federal purposes have been reduced by the tax benefits associated with the exercise of employee stock options during thefiscal year and utilization of net operating loss carryover applicable to both stock options and acquired entities. The benefits applicable to stock options werecredited directly to stockholders’ equity when realized and amounted to $19.5 million and $24.7 million for fiscal years 2007 and 2006, respectively.

As of November 30, 2007, our federal and state net operating loss carryforwards for income tax purposes were $397.2 million and $114.4 million,respectively, which expire through 2023. As of November 30, 2007, our federal and state tax credit carryforwards for income tax purposes were $41.4 millionand $24.4 million, respectively. The federal tax credit carryforwards expire through 2027 and the state tax credits can be carried forward indefinitely.

U.S. income taxes and foreign withholding taxes have not been provided on a cumulative total of $34.0 million of undistributed earnings for certainnon-U.S. subsidiaries. With the exception of our subsidiaries in the United Kingdom, net undistributed earnings of our foreign subsidiaries are generallyconsidered to be indefinitely reinvested, and accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of these earnings inthe form of dividends or otherwise, we will be subject to U.S. income taxes net of available foreign tax credits associated with these earnings.

While we have not experienced and do not expect any impact to the effective tax rate for U.S. non-qualified stock option or restricted stock expense due tothe adoption of SFAS No. 123(R), the effective tax rate has been and may be negatively impacted by foreign stock option expense that may not be deductible inthe foreign

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Table of Contentsjurisdictions. Also, SFAS No. 123(R) requires that the tax benefit of stock option deductions relating to incentive stock options be recorded in the period ofdisqualifying disposition. This could result in significant fluctuations in our effective tax rate between accounting periods.

We have elected to track the portion of our federal and state net operating loss and tax credit carryforwards attributable to stock option benefits, in aseparate memo account pursuant to SFAS No. 123(R). Therefore, these amounts are no longer included in our gross or net deferred tax assets. Pursuant to SFASNo. 123(R), footnote 82, the benefit of these net operating loss and tax credit carryforwards will only be recorded to equity when they reduce cash taxes payable.

As of November 30, 2007, our federal and state net operating loss carryforwards being accounted for in the memo account were $313.8 million and $97.5million, respectively. As of November 30, 2007, our federal and state tax credit carryforwards being accounted for in the memo account were $38.1 million and$14.7 million, respectively.

In the event of a change in ownership, as defined under federal and state tax laws, our net operating loss and tax credit carryforwards may be subject toannual limitations. The annual limitations may result in the expiration of the net operating loss and tax credit carryforwards before utilization.

Liquidity and Capital Resources

Current Cash Flows

As of November 30, 2007, we had cash, cash equivalents and short-term investments totaling $265.8 million, representing a decrease of $273.8 millionfrom November 30, 2006. Our total cash and cash equivalent balance was $170.2 million as of November 30, 2007. As of November 30, 2007, our short-termavailable-for-sale investments totaled $95.5 million, primarily consisting of U.S. government debt securities and high investment grade corporate debt,asset-backed and mortgage-backed securities.

Net cash provided by operating activities in fiscal year 2007 was $102.3 million, resulting from net income of $51.9 million, adjusted for $52.8 million innon-cash charges and $(2.4) million net change in assets and liabilities. The non-cash charges included depreciation and amortization, stock-based compensation,acquired IPR&D, minority interest and tax benefits related to stock benefit plans, less deferred income tax and excess tax benefits from stock-basedcompensation recorded in financing activities following the adoption of SFAS No. 123(R) in fiscal year 2006. Net change in assets and liabilities included anincrease in accounts receivable due to increased total revenue, an increase in prepaid expenses and other assets due to prepayments of certain royalties and timingdifference in recoverable value added tax, an increase in deferred revenue and a decrease in accrued liabilities other than those liabilities assumed in the Spotfireacquisition.

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

Net cash provided by investing activities was $115.0 million in fiscal year 2007, resulting primarily from the net cash proceeds from short-terminvestments of $309.4 million, which was partially offset by cash used, net of cash acquired, of $182.9 million for the Spotfire acquisition and cash used of $12.6million in capital expenditures. In addition, we used part of the net proceeds from sales of short-term investments to finance our stock repurchase program.

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Table of ContentsNet cash used for financing activities was $190.0 million in fiscal year 2007, resulting primarily from our $226.9 million repurchase of shares of our

common stock on the open market, $4.0 million complete repayment of Spotfire’s revolving line of credit and $2.3 million repayment on other long-term debts,less $25.0 million cash received from the exercise of stock options and the sale of stock under our Employee Stock Purchase Program, and $18.0 million excesstax benefits from stock-based compensation in accordance with the requirements of SFAS No. 123(R). Additionally, proceeds of $0.2 million were received fromminority investors.

In December 2006, the Audit Committee on behalf of our Board of Directors approved an eighteen-month stock repurchase program pursuant to which wewere authorized to repurchase up to $100.0 million of our outstanding common stock. In April 2007, our Board of Directors approved a new stock repurchaseprogram pursuant to which we may repurchase up to $300.0 million of our outstanding common stock from time to time in the open market or through privatelynegotiated transactions. In connection with approving the April 2007 stock repurchase program, the December 2006 stock repurchase program was terminatedand the remaining authorized amount of $58.2 million under the December 2006 stock repurchase program was canceled. In fiscal year 2007, we repurchasedapproximately 25.6 million shares of our outstanding common stock at an average price of $8.87 per share pursuant to the programs. As of January 18, 2008, theremaining authorized amount under the April 2007 stock repurchase program was $81.2 million.

We currently anticipate that our operating expenses will grow in absolute dollars for the foreseeable future, and we intend to fund our operating expensesprimarily through cash flows from operations. Our capital expenditures are currently expected to be approximately $10.0 million to $15.0 million in fiscal year2008. We believe that our current cash, cash equivalents and short-term investments together with expected cash flows from operations will be sufficient to meetour anticipated cash requirements for working capital, capital expenditures, and currently approved stock repurchases for at least the next 12 months. However,we may require or desire additional funds to support our operating expenses and capital requirements or for other purposes, such as acquisitions, and may seek toraise such additional funds through public or private equity or debt financing or from other sources.

Commitments

In June 2003, we purchased our corporate headquarters with a $54.0 million mortgage note to lower our operating costs. The mortgage note payablecarries a 20-year amortization and, as amended in the second quarter of fiscal year 2007, a fixed annual interest rate of 5.50%. The principal balance of $34.4million that will be remaining at the end of the 10-year term will be due as a final lump sum payment on July 1, 2013. Under the applicable terms of the mortgagenote agreements, we are prohibited from acquiring another company without prior consent from the lender unless we maintain at least $50.0 million of cash orcash equivalents and meet other non-financial terms as defined in the agreements. In addition, we are subject to certain non-financial covenants as defined in theagreements. We were in compliance with all covenants as of November 30, 2007.

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

We have a $20.0 million revolving line of credit that matures on June 19, 2008. The revolving line of credit is available for cash borrowings and for theissuance of letters of credit up to $20.0 million. As of November 30, 2007, no borrowings were outstanding under the facility and a $13.0 million irrevocableletter of credit was outstanding, leaving $7.0 million of available credit for additional letters of credit or cash borrowings. The $13.0 million irrevocable letter ofcredit outstanding was issued in connection with the mortgage note payable. The letter of credit automatically renews for successive one-year periods, until themortgage note payable has been satisfied in full. We are required to maintain a minimum of $40.0 million in unrestricted cash, cash equivalents and short-terminvestments, net of total current and long-term indebtedness, as well as comply with other

37


Table of Contentsnon-financial covenants defined in the agreement. As of November 30, 2007, we were in compliance with all covenants under the revolving line of credit.

In connection with a facility lease, we have an irrevocable letter of credit in the amount of $4.5 million. The letter of credit automatically renews annuallyfor the duration of the lease term, which expires in December 2010. We are subject to certain financial covenants as defined in the letter of credit agreement. Asof November 30, 2007, we were in compliance with all covenants under the letter of credit.

As of November 30, 2007, we had $3.7 million in restricted cash in connection with bank guarantees issued by some of our international subsidiaries. Thecash collateral is presented as restricted cash and included in Other Assets in our Consolidated Balance Sheet.

As of November 30, 2007, our contractual commitments associated with indebtedness, lease obligations and operational restructuring are as follows (inthousands):

Total 2008 2009 2010 2011 2012 ThereafterOperating commitments:

Debt principal $ 46,482 $ 1,924 $ 2,033 $ 2,148 $ 2,269 $ 2,397 $ 35,711Debt interest 12,676 2,508 2,400 2,285 2,164 2,036 1,283Operating leases 31,704 7,245 6,222 6,209 4,435 2,986 4,607

90,862 11,677 10,655 10,642 8,868 7,419 41,601

Restructuring-related commitments: Gross lease obligations 22,838 6,924 7,551 7,720 643 — — Estimated sublease income (6,828) (2,118) (2,236) (2,282) (192) — —

16,010 4,806 5,315 5,438 451 — —

Total commitments $ 106,872 $ 16,483 $ 15,970 $ 16,080 $ 9,319 $ 7,419 $ 41,601

Future minimum lease payments under restructured non-cancelable operating leases as of November 30, 2007, are included in Accrued Restructuring andExcess Facilities Costs on our Consolidated Balance Sheets. See also Note 8 to our Consolidated Financial Statements for further details on accrued restructuringcosts.

Indemnification

Our software license agreements typically provide for indemnification of customers for intellectual property infringement claims. To date, no such claimshave been filed against us. We also warrant to customers that our software products operate substantially in accordance with the software product’sspecifications. Historically, minimal costs have been incurred related to product warranties, and, as such, no accruals for warranty costs have been made. Inaddition, we indemnify our officers and directors under the terms of indemnity agreements entered into with them, as well as pursuant to our certificate ofincorporation, bylaws and applicable provisions of Delaware law.

To date, we have incurred costs for the payment of legal fees in connection with the legal proceedings detailed in Note 12 to our Consolidated FinancialStatements.

Off Balance Sheet Arrangements

As of November 30, 2007, we had no off balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Recent Accounting Pronouncements

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

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Table of Contents

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to the impact of interest rate changes and foreign currency fluctuations.

Interest Rate Risk

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

Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fairmarket value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due inpart to these factors, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in principal if forced tosell securities which have declined in market value due to changes in interest rates or other factors in the current unstable credit environment. As ofNovember 30, 2007, we had an investment portfolio of fixed income securities totaling $95.5 million, excluding those classified as cash and cash equivalents.These securities are classified as available-for-sale and are recorded on the balance sheets at fair market value with unrealized gains or losses reported as aseparate component of stockholders’ equity. Unrealized losses are charged against income when a decline in fair market value is determined to beother-than-temporary. The specific identification method is used to determine the cost of securities sold.

A hypothetical 100 basis point increase in interest rates would result in an approximate $1.0 million decrease in the fair value of our available-for-sale debtsecurities as of November 30, 2007.

Foreign Currency Risk

We conduct business in the Americas, EMEA, and APJ. As a result, our financial results could be affected by factors such as changes in foreign currencyexchange rates or changes in economic conditions in foreign markets. The majority of sales are currently made in U.S. dollars; a strengthening of the dollar couldmake our products less competitive. We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiariesinto U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign subsidiaries’ financial statements intoU.S. dollars will lead to translation adjustments which are recorded as a component of other comprehensive income. We enter into forward contracts withfinancial institutions to manage our currency exposure related to net assets and liabilities denominated in foreign currencies. These forward contracts aregenerally settled monthly. We do not enter into derivative financial instruments for trading purposes.

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Table of ContentsAs of November 30, 2007, we had nine outstanding forward contracts with total notional amounts of $83.6 million, which are summarized as follows (in

thousands):

NotionalValue

Local Currency

NotionalValueUSD

Fair ValueGain (Loss)

USD Forward contracts sold:

EURO 32,400 $ 47,605 $ 311 Australian dollar 4,900 4,334 (11)British pound 8,700 17,882 142 Indian rupee 20,000 506 (6)Japanese yen 186,000 1,679 12 Singapore dollar 2,500 1,732 2 South African rand 52,000 7,627 (92)Swiss franc 900 799 12

Forward contracts purchased: Swedish krona 9,100 1,427 (18)

$ 83,591 $ 352

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to the Index to Consolidated Financial Statements that appears on page F-1 of this Annual Report on Form 10-K. The Report ofIndependent Registered Public Accounting Firm from PricewaterhouseCoopers LLP, the Consolidated Financial Statements and the Notes to ConsolidatedFinancial Statements listed in the Index to Consolidated Financial Statements, which appear beginning on page F-2 of this Annual Report on Form 10-K, areincorporated by reference into this Item 8.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

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

Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief FinancialOfficer have concluded that our disclosure controls and procedures were effective.

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Table of ContentsManagement’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal

control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. Because of its inherent limitations, internal control over financial reportingmay not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may becomeinadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We assessed the effectiveness of our internal control over financial reporting as of November 30, 2007. In making this assessment, we used the criteria setforth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on our assessment usingthose criteria, we concluded that our internal control over financial reporting was effective as of November 30, 2007.

The effectiveness of our internal control over financial reporting as of November 30, 2007, has been audited by PricewaterhouseCoopers LLP, anindependent registered public accounting firm, as stated in their report that appears herein.

Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during thefourth quarter of fiscal year 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On January 23, 2008, the Compensation Committee of the Board of Directors approved a grant of shares of restricted stock under the 1996 Stock OptionPlan to the following executive officers in the amounts indicated below:

Name

Shares ofRestricted

StockVivek Y. Ranadivé 100,000Murray Rode 60,000William Hughes 55,000Murat Sonmez 45,000

Shares subject to these restricted stock award vests as to 25% of the shares on the one year anniversary of the grant date; as to 25% of the shares on thetwo-year anniversary of the grant date; and as to 50% of the shares on the three-year anniversary of the grant date.

The Compensation Committee also approved a cash retention bonus for Mr. Sonmez of $150,000. The retention bonus is subject to a “clawback” provisionpursuant to which Mr. Sonmez is obligated to repay the entire amount of the bonus in the event that he resigns from the Company without good reason prior toJanuary 31, 2009.

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Table of ContentsPART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Except as set fort below, the information required by this Item is incorporated by reference to the sections entitled “Board of Directors,” “Election ofDirectors,” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement for the 2008 Annual Meeting of Stockholders to be filedwith the SEC within 120 days after the end of our fiscal year ended November 30, 2007.

Executive Officers

The name of and certain information regarding each of our current executive officers are set forth below.

Vivek Y. Ranadivé, age 50, has served as our Chairman and Chief Executive Officer since our inception. Mr. Ranadivé founded Teknekron SoftwareSystems, Inc., our predecessor company, in 1985.

Christopher Ahlberg, age 39, our Executive Vice President, President Spotfire Division, joined TIBCO in 2007. Prior to joining TIBCO, Dr. Ahlberg wasfounder and Chief Executive Officer of Spotfire, Inc. a provider of enterprise analytics software for next generation business intelligence.

Sydney L. Carey, age 43, our Senior Vice President, Finance and Corporate Controller, joined TIBCO in January 2004. From February 2002 to January2004, Ms. Carey was Chief Financial Officer of Vernier Networks. From December 2000 until February 2002, Ms. Carey was Chief Financial Officer of PacificBroadband Communications.

William R. Hughes, age 47, our Executive Vice President, General Counsel and Secretary, joined TIBCO in 1999. Between 1989 and his joining TIBCOin 1999, Mr. Hughes held several in-house legal positions in the technology industry in Europe and the United States. Prior to 1989, Mr. Hughes worked inprivate practice in the areas of corporate, finance and intellectual property law.

Thomas Laffey, age 52, our Executive Vice President, Products and Technology, joined TIBCO in April 2002. Prior to joining TIBCO, Mr. Laffey was aco-founder of Talarian Corporation, a provider of middleware, where he was responsible for engineering and product direction.

Ram Menon, age 42, our Executive Vice President, Worldwide Marketing, joined TIBCO in July 1999. Prior to joining TIBCO, Mr. Menon was withAccenture, a global consulting firm, where he specialized in supply chain and e-commerce strategy consulting with Global 1000 companies.

Murray D. Rode, age 43, our Chief Financial Officer and Executive Vice President, Strategic Operations, joined TIBCO in February 1995. Prior to joiningTIBCO, Mr. Rode was a management consultant with a major international consulting firm, where he specialized in the areas of technology strategy andplanning, business process re-engineering and project management.

Murat Sonmez, age 44, our Executive Vice President, Global Field Operations, has been with TIBCO since October 2003 and from January 1994 to July2002. From August 2002 to September 2003, Mr. Sonmez served as Executive Vice President, Operations at Centrata, a utility computing software firm.

Robert P. Stefanski, age 46, our Executive Vice President, Organizational Development and Human Resources, has been with TIBCO since January 2007and from March 1998 to January 2003. Mr. Stefanski intends to leave the Company in January 2008.

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Table of ContentsCode of Ethics

We have adopted a Code of Ethics for Chief Executive and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer,Chief Accounting Officer, Corporate Controller and all others performing similar functions. The Code of Ethics is available on our website athttp://www.tibco.com/company/investor_info/corporate_governance/code_ethics.jsp. If we make any substantive amendments to the Code of Ethics or grant anywaiver, including any implicit waiver, from a provision of the code to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, CorporateController or others providing similar functions, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the sections entitled “Election of Directors—Director Compensation,”“Compensation Committee Matters—Committee Interlocks and Insider Participation,” “Compensation Committee Matters—Compensation Committee Report,”and “Compensation Discussion & Analysis” in our Proxy Statement for the 2008 Annual Meeting of Stockholders to be filed with the SEC within 120 days afterthe end of our fiscal year ended November 30, 2007.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS

The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference to thesection entitled “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement for the 2008 Annual Meeting of Stockholders to befiled with the SEC within 120 days after the end of our fiscal year ended November 30, 2007.

The information required by this item regarding equity compensation plans is incorporated by reference to the section entitled “Equity Compensation PlanInformation” set forth in Item 5 of this Annual Report on Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Party Transactions

The information required by this item regarding certain relationships and related party transactions is incorporated by reference to the section entitled“Certain Relationships and Related Persons Transactions Disclosure” in our Proxy Statement for the 2008 Annual Meeting of Stockholders to be filed with theSEC within 120 days after the end of our fiscal year ended November 30, 2007.

Director Independence

The information required by this item regarding director independence is incorporated by reference to the section entitled “Election of Directors” in ourProxy Statement for the 2008 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended November 30,2007.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is incorporated by reference to the section entitled “Ratification of Independent Registered Public Accounting Firm”in our Proxy Statement for the 2008 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year endedNovember 30, 2007.

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Table of ContentsPART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Annual Report on Form 10-K:

1. Financial Statements. Please see the accompanying Index to Consolidated Financial Statements, which appears on page F-1 of the AnnualReport on Form 10-K. The Report of Independent Registered Public Accounting Firm, the Consolidated Financial Statements and the Notes toConsolidated Financial Statements listed in the Index to Consolidated Financial Statements, which appear beginning on page F-2 of this Annual Report onForm 10-K, are incorporated by reference into Item 8 above.

2. Financial Statement Schedules. Financial Statement Schedules have been omitted because the information required to be set forth therein iseither not applicable or is included in the Consolidated Financial Statements or the Notes to Consolidated Financial Statements.

3. Exhibits. See Item 15(b) below. Each management contract and compensatory plan or arrangement required to be filed has been identified.

(b) Exhibits. The exhibits listed on the accompanying Exhibit Index immediately following the signature page are filed as part of, or are incorporated byreference into, this Annual Report on Form 10-K.

(c) Financial Statement Schedules. Reference is made to Item 15(a)(2) above.

44


Table of ContentsTIBCO SOFTWARE INC.

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

PageReport of Independent Registered Public Accounting Firm F-2Consolidated Balance Sheets F-3Consolidated Statements of Operations F-4Consolidated Statements of Stockholders’ Equity and Comprehensive Income F-5Consolidated Statements of Cash Flows F-6Notes to Consolidated Financial Statements F-7

F-1


Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders ofTIBCO Software Inc.:

In our opinion, the accompanying Consolidated Balance Sheets and the related Consolidated Statements of Operations, Consolidated Statements ofStockholders’ Equity and Comprehensive Income and Consolidated Statements of Cash Flows listed in the Index to the Consolidated Financial Statements ofTIBCO Software Inc., present fairly, in all material respects, the financial position of TIBCO Software Inc. and its subsidiaries at November 30, 2007 andNovember 30, 2006, and the results of their operations and their cash flows for each of the three years in the period ended November 30, 2007 in conformity withaccounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effectiveinternal control over financial reporting as of November 30, 2007, based on criteria established in Internal Control—Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, formaintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included inManagement’s Report on Internal Control over Financial Reporting appearing under Item 9A of this Annual Report on Form 10-K. Our responsibility is toexpress opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted ouraudits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and performthe audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control overfinancial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating theoverall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control basedon the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our auditsprovide a reasonable basis for our opinions.

As discussed in Notes 2 and 14 to the Consolidated Financial Statements, effective December 1, 2005, the Company changed the manner in which itaccounts for stock-based compensation.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control overfinancial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.

/s/ PRICEWATERHOUSECOOPERS LLP

San Jose, CaliforniaJanuary , 2008

F-2



CONSOLIDATED BALANCE SHEETS(In thousands, except par value)

November 30, 2007 2006

Assets Current assets:

Cash and cash equivalents $ 170,237 $ 138,912Short-term investments 95,534 400,658Accounts receivable, net of allowances of $4,259 and $4,255 161,730 149,141Prepaid expenses and other current assets 53,540 35,699

Total current assets 481,041 724,410Property and equipment, net 111,390 113,787Goodwill 412,256 274,442Acquired intangible assets, net 110,930 55,072Long-term deferred income tax assets 35,307 21,437Other assets 47,535 37,211

Total assets $ 1,198,459 $ 1,226,359

Liabilities and Stockholders’ Equity Current liabilities:

Accounts payable $ 12,076 $ 12,651Accrued liabilities 95,526 74,347Accrued restructuring and excess facilities costs 5,421 4,251Deferred revenue 127,200 102,269Current portion of long-term debt 1,924 1,892

Total current liabilities 242,147 195,410Accrued excess facilities costs, less current portion 10,811 18,150Long-term deferred revenue 14,319 4,151Long-term deferred income tax liabilities 25,821 11,439Long-term debt, less current portion 44,558 46,453Other long-term liabilities 5,006 4,749

Total liabilities 342,662 280,352

Commitments and contingencies (Note 11)

Minority interest 401 — Stockholders’ equity:

Common stock, $0.001 par value; 1,200,000 shares authorized; 191,150 shares and 211,208 shares issued andoutstanding, respectively 191 211

Additional paid-in capital 794,568 909,289Accumulated other comprehensive income 32,993 10,809Retained earnings 27,644 25,698

Total stockholders’ equity 855,396 946,007

Total liabilities and stockholders’ equity $ 1,198,459 $ 1,226,359

See accompanying Notes to Consolidated Financial Statements

F-3



CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)

Year Ended November 30, 2007 2006 2005 Revenue:

License revenue: Non-related parties $ 259,313 $ 240,071 $ 187,850 Related parties — — 16,038

Total license revenue 259,313 240,071 203,888

Service and maintenance revenue: Non-related parties 310,444 269,908 228,539 Related parties — — 6,973 Reimbursable expenses 7,629 7,300 6,510

Total service and maintenance revenue 318,073 277,208 242,022

Total revenue 577,386 517,279 445,910

Cost of revenue: License 24,024 15,936 12,694 Service and maintenance 134,877 117,745 111,499

Total cost of revenue 158,901 133,681 124,193

Gross profit 418,485 383,598 321,717 Operating expenses:

Research and development 92,924 85,923 73,136 Sales and marketing 197,397 172,768 140,370 General and administrative 51,538 44,139 37,320 Restructuring charges (adjustment) (1,095) (1,042) 3,905 Amortization of acquired intangible assets 13,164 9,454 8,912 Acquired in-process research and development 1,600 — —

Total operating expenses 355,528 311,242 263,643

Income from operations 62,957 72,356 58,074

Interest income 18,447 19,936 13,318 Interest expense (2,824) (3,171) (2,711)Other income (expense), net (1,181) 1,437 (1,600)

Income before provision for income taxes 77,399 90,558 67,081

Provision for (benefit from) income taxes 25,401 17,694 (5,474)Minority interest, net of tax 110 — —

Net income $ 51,888 $ 72,864 $ 72,555

Net income per share: Basic $ 0.26 $ 0.35 $ 0.34

Diluted $ 0.25 $ 0.33 $ 0.32

Shares used in computing net income per share: Basic 198,885 209,538 213,263

Diluted 205,316 218,075 223,977


F-4



CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ANDCOMPREHENSIVE INCOME

(In thousands)

Common Stock Additional

Paid-inCapital

Unearned

Stock-BasedCompensation

AccumulatedOther

ComprehensiveIncome (Loss)

RetainedEarnings

(AccumulatedDeficit)

Total

Stockholders’Equity

Shares Amount

Balances, November 30, 2004 213,912 $ 214 $ 933,223 $ (149) $ 702 $ (113,508) $ 820,482 Components of comprehensive income:

Net income — — — — — 72,555 72,555 Foreign currency translation adjustment, net of $784

tax — — — — (14,904) — (14,904)Unrealized loss on investments, no tax — — — — (144) — (144)

Comprehensive income 57,507

Common stock repurchased and retired (6,550) (7) (48,293) — — — (48,300)Common stock options exercised 2,524 3 13,556 — — — 13,559 Common stock issued for employee stock purchase program 662 1 4,041 — — — 4,042 Tax benefits from employee stock option plans — — 26,210 — — — 26,210 Unearned stock-based compensation, net — — 93 26 — — 119

Balances, November 30, 2005 210,548 211 928,830 (123) (14,346) (40,953) 873,619 Components of comprehensive income:

Net income — — — — — 72,864 72,864 Foreign currency translation adjustment, net of

$(5,759) tax — — — — 23,451 — 23,451 Unrealized gain on investments, no tax — — — — 1,704 — 1,704


Common stock repurchased and retired (9,893) (10) (71,449) — — (6,213) (77,672)Common stock options exercised 9,115 9 20,268 — — — 20,277 Common stock issued for employee stock purchase program 261 — 1,966 — — — 1,966 Tax benefits from employee stock option plans — — 13,980 — — — 13,980 Stock-based compensation, net — — 15,818 — — — 15,818 Transfer of unearned stock-based compensation upon

adoption of SFAS No. 123(R) — — (123) 123 — — — Restricted stock awards 1,177 1 (1) — — — —

Balances, November 30, 2006 211,208 211 909,289 — 10,809 25,698 946,007 Components of comprehensive income:

Net income — — — — — 51,888 51,888 Foreign currency translation adjustment, net of

$(3,904) tax — — — — 21,514 — 21,514 Unrealized gain on investments, no tax — — — — 670 — 670


Common stock repurchased and retired (25,575) (25) (176,965) — — (49,942) (226,932)Common stock options exercised 3,995 4 22,763 — — — 22,767 Common stock issued for employee stock purchase program 398 — 2,945 — — — 2,945 Tax benefits from employee stock option plans — — 19,456 — — — 19,456 Stock-based compensation, net — — 17,563 — — — 17,563 Substitute options fair value adjustment—Spotfire — — 187 — — — 187 Restricted stock withholding taxes net-settlement (85) — (669) — — — (669)Restricted stock awards 1,209 1 (1) — — — —

Balances, November 30, 2007 191,150 $ 191 $ 794,568 $ — $ 32,993 $ 27,644 $ 855,396


F-5



CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)

Year Ended November 30, 2007 2006 2005 Operating activities:

Net income $ 51,888 $ 72,864 $ 72,555 Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of property and equipment 16,167 15,641 14,990 Amortization of acquired intangible assets 23,490 14,776 14,870 Stock-based compensation 17,563 15,818 129 Acquired in-process research and development 1,600 — — Deferred income tax (6,077) (19,549) (21,893)Tax benefits related to acquisitions — — 1,149 Tax benefits related to employee stock option plans 19,456 24,695 15,851 Excess tax benefits from stock-based compensation (17,980) (21,482) — Minority interest, net of tax 110 — — Other non-cash adjustments, net (1,506) (799) 384 Changes in assets and liabilities, net of effects of acquisitions:

Accounts receivable (5,459) (28,002) (8,764)Due from related parties, net — 1,243 1,643 Prepaid expenses and other assets (4,778) (4,935) (2,853)Accounts payable (885) 3,008 2,774 Accrued liabilities and excess facilities costs (8,613) 8,559 (26,823)Deferred revenue 17,304 24,113 18,816

Net cash provided by operating activities 102,280 105,950 82,828

Investing activities: Purchases of short-term investments (140,928) (407,639) (231,489)Maturities and sales of short-term investments 450,311 277,588 254,917 Acquisitions, net of cash acquired (182,912) — (24,849)Purchases of private equity investments (63) (82) (382)Proceeds from sales of private equity investments 803 1,488 — Purchases of property and equipment (12,599) (12,974) (14,946)Restricted cash pledged as security 368 (1,506) (465)

Net cash provided by (used in) investing activities 114,980 (143,125) (17,214)

Financing activities: Proceeds from issuance of common stock 25,043 22,243 17,601 Repurchases of the Company’s common stock (226,932) (77,672) (48,300)Excess tax benefits from stock-based compensation 17,980 21,482 — Principal payments on long-term debt (6,277) (1,798) (1,708)Proceeds from minority investors 189 — —

Net cash used in financing activities (189,997) (35,745) (32,407)

Effect of foreign exchange rate changes on cash and cash equivalents 4,062 3,076 (5,300)

Net increase (decrease) in cash and cash equivalents 31,325 (69,844) 27,907 Cash and cash equivalents at beginning of year 138,912 208,756 180,849

Cash and cash equivalents at end of year $ 170,237 $ 138,912 $ 208,756

Supplemental disclosures: Income taxes paid $ 12,098 $ 15,083 $ 7,915

Interest paid $ 2,489 $ 2,627 $ 2,711

Supplemental disclosures of non-cash financing activity:

Non-cash contributions from minority investors $ 85 $ — $ —


F-6



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business

TIBCO Software Inc. (“TIBCO,” the “Company,” “we” or “us”) is a leading provider of infrastructure software. We provide a broad range ofstandards-based infrastructure software solutions that help organizations achieve the benefits of real-time business. Our infrastructure software gives customersthe ability to constantly innovate by connecting applications and data in a service-oriented architecture, streamlining activities through business processmanagement, and giving people the information and intelligence tools they need to make faster and smarter decisions, what we call The Power of Now®.

2. Summary of Significant Accounting Policies

Principles of Consolidation

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

Fiscal Years

Our fiscal year is a 12 month period ending on November 30 of a stated year. For the purpose of presentation, we also refer to the fiscal years endedNovember 30, 2007, 2006 and 2005, as our fiscal years 2007, 2006 and 2005, respectively.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of Americarequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities atthe date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from thoseestimates.

Revenue Recognition

License revenue consists principally of revenue earned under software license agreements. License revenue is generally recognized when a signed contractor other persuasive evidence of an arrangement exists, the software has been shipped or electronically delivered, the license fee is fixed or determinable andcollection of the resulting receivable is reasonably assured. When contracts contain multiple elements wherein vendor-specific objective evidence exists for allundelivered elements, we account for the delivered elements in accordance with the “Residual Method” prescribed by the American Institute of Certified PublicAccountants’ (“AICPA”) Statement of Position (“SOP”) No. 98-9, Modification of SOP-97-2, Software Revenue Recognition, With Respect to CertainTransactions. Revenue from subscription license agreements, which include software, rights to unspecified future products and maintenance, is recognizedratably over the term of the subscription period. Fair value of services, such as consulting or training, is based upon separate sales of these services. When therenewal period for maintenance is not substantive compared to the term of a term license, we recognize the entire arrangement fee ratably over the term.

Revenue on shipments to resellers, which is generally subject to certain rights of return and price protection, is recognized when the products are sold bythe resellers to an end-user customer and recorded net of related costs to the resellers. Provided all other revenue criteria are met, the upfront, minimum,non-refundable license fees from OEM customers are generally recognized upon delivery and on-going royalty fees are generally recognized upon reports ofunits shipped.

F-7



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Professional services revenue consists primarily of revenue received for assisting with the implementation of our software, on-site support, training andother consulting services. Many customers who license our software also enter into separate professional services arrangements with the Company. Indetermining whether professional services revenue should be accounted for separately from license revenue, we evaluate, among other factors: the nature of oursoftware products; whether they are ready for use by the customer upon receipt; the nature of our implementation services, which typically do not involvesignificant customization to or development of the underlying software code; the availability of services from other vendors; whether the timing of payments forlicense revenue is coincident with performance of services; and whether milestones or acceptance criteria exist that affect the realizability of the software licensefee. Substantially all of our professional services arrangements are billed on a time and materials basis and, accordingly, are recognized as the services areperformed. Contracts with fixed or not-to-exceed fees are recognized on a proportional performance basis. If there is significant uncertainty about the projectcompletion or receipt of payment for professional services, revenue is deferred until the uncertainty is sufficiently resolved. Training revenue is recognized astraining services are delivered.

For arrangements that do not qualify for separate accounting for the license and professional services revenues, including arrangements that involvesignificant modification or customization of the software, that include milestones or customer specific acceptance criteria that may affect collection of thesoftware license fees, or where payment for the software license is tied to the performance of professional services, software license revenue is generallyrecognized together with the professional services revenue using either the percentage-of-completion or completed-contract method. Under thepercentage-of-completion method, revenue recognized is equal to the ratio of costs expended to date to the anticipated total contract costs, based on currentestimates of costs to complete the project. If the total estimated costs to complete a project exceed the total contract amount, indicating a loss, the entireanticipated loss would be recognized currently.

Maintenance revenue consists of fees for providing software updates on a when and if available basis and technical support for software products(“post-contract customer support” or “PCS”). Maintenance revenue is recognized ratably over the term of the agreement.

Payments received in advance of services performed are deferred. Allowances for estimated future returns and discounts are provided for upon recognitionof revenue.

Fair Value of Financial Instruments

Carrying amounts of our financial instruments including accounts receivable, accounts payable and accrued liabilities approximate fair value due to theirshort maturities. The fair values of our available-for-sale investments in marketable securities and derivative instruments are detailed further in Note 4.

Concentration of Credit Risk

Our cash, cash equivalents, short-term investments and accounts receivable are potentially subject to concentration of credit risk. Cash, cash equivalentsand investments are deposited with financial institutions that management believes are creditworthy. Our accounts receivable are derived from revenue earnedfrom customers located primarily in the United States and Europe. We perform ongoing credit evaluations of our customers’ financial condition and, generally,require no collateral from our customers. We maintain an allowance for doubtful accounts receivable based on various factors, including our review of creditprofiles of our customers, contractual terms and conditions, current economic trends and historical payment experience; see Note 5 for further details. We do notexpect to incur material losses with respect to financial instruments that potentially subject the Company to concentration of credit risk.

F-8




No customer accounted for more than 10% of total revenue in fiscal years 2007, 2006 or 2005. No customer had a balance in excess of 10% of our netaccounts receivable as of November 30, 2007 or 2006.

Cash, Cash Equivalents, and Short-Term Investments

We consider all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents.Management determines the appropriate classification of marketable securities at the time of purchase and evaluates such designation as of each balance sheetdate. To date, all marketable securities have been classified as available-for-sale and are carried at fair value with unrealized gains and losses, if any, included asa component of Accumulated Other Comprehensive Income (Loss) in Stockholders’ Equity. These available-for-sale investments are presented as Current Assetsas they are subject to use within one year in current operations. Interest, dividends, realized gains and losses and impairment losses are included in InterestIncome and Other Income (Expense). Realized gains and losses and impairment losses are recognized based on the specific identification method.

Valuation and Impairment of Short-Term Investments

We monitor our investment portfolio for impairment on a periodic basis. In the event that the carrying value of an investment exceeds its fair value and thedecline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. In order todetermine whether a decline in value is other-than-temporary, we evaluate, among other factors: the duration and extent to which the fair value has been less thanthe carrying value; our financial condition and business outlook, including key operational and cash flow metrics, current market conditions and future trends inthe industry; our relative competitive position within the industry; and our intent and ability to retain the investment for a period of time sufficient to allow forany anticipated recovery in fair market value.

Other Investments

Our investments also include minority equity investments in privately held companies that are generally carried at cost basis and are included in OtherAssets on the Balance Sheets. The fair value of these investments is dependent on the performance of the companies in which we invested, as well as thevolatility inherent in external markets for these investments. In assessing potential impairment, we consider these factors as well as each of the companies’ cashposition, earnings/revenue outlook, liquidity and management/ownership. If we believe that an other-than-temporary decline exists, we write down theinvestment to market value and record the related write-down as a loss on investments in our Consolidated Statements of Operations. The carrying value of ourminority equity investments is $0.9 million and $1.6 million as of November 30, 2007 and 2006, respectively. For the fiscal year ended November 30, 2006, wesold one of our private equity investments and realized a net gain of $0.7 million. No impairment losses associated with our minority equity investment wereincurred in the periods presented.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimateduseful lives of the assets as follows:

Estimated useful livesBuildings 25 yearsEquipment and software 2 – 5 yearsFurniture and fixtures 5 yearsLeasehold improvements Shorter of the lease term or the estimated useful life

F-9




Depreciation expense for property and equipment was $16.2 million, $15.6 million and $15.0 million in fiscal years 2007, 2006 and 2005, respectively.

Goodwill

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, goodwill and intangible assetswith indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate their value may no longer berecoverable. We do not have intangible assets with indefinite useful lives other than goodwill. Goodwill impairment testing is a two-step process: first, we screenfor impairment, and if any possible impairment exists, we then undertake a second step of measuring such impairment. We generally perform our goodwillimpairment test annually in our fourth fiscal quarter, and the last impairment test was completed for the fiscal year ended November 30, 2007. SFAS No. 142requires impairment testing based on reporting units. We periodically re-evaluate our business and have determined that we continue to operate in one segment,which we consider our sole reporting unit. Therefore, goodwill was tested and will continue to be tested for impairment at the enterprise level. To date, we havedetermined that there has been no impairment of goodwill.

Impairment of Long-Lived Assets

We evaluate the recoverability of our long-lived assets which includes amortizable intangible and tangible assets in accordance with SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets. Our acquired intangible assets with definite useful lives are amortized over their useful lives.We evaluate long-lived assets, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying value of long-livedassets may not be recoverable. We recognize such impairment in the event the net book value of such assets exceeds the future undiscounted cash flowsattributable to such assets. No long-lived assets impairment losses were incurred in the fiscal years presented.

Restructuring and Integration Costs

Our restructuring charges are comprised primarily of costs related to properties abandoned in connection with facilities consolidation, related write-downsof leasehold improvements and severance and associated employee termination costs related to headcount reductions. For restructuring actions initiated prior toDecember 31, 2002, we followed the guidance provided by Emerging Issues Task Force (“EITF”) Issue No. 94-3, Liability Recognition for Certain EmployeeTermination Benefits and Other Costs To Exit an Activity (Including Certain Costs Associated with a Restructuring) and EITF Issue No. 88-10, Costs Associatedwith Lease Modification or Termination. We recorded the liability related to these termination costs when the plan was approved and the period of time toimplement the plan was set. For restructuring actions initiated after January 1, 2003, we adopted SFAS No. 146, Accounting for Costs Associated with Exit orDisposal Activities, which requires that a liability for costs associated with an exit or disposal activity be recognized and measured initially at fair value onlywhen the liability is incurred.

Our restructuring charges included accruals for estimated losses on excess facility costs based on our contractual obligations net of estimated subleaseincome based on current comparable market rates for leases. We reassess this liability periodically based on market conditions. Revisions to our estimates of thisliability could materially impact our operating results and financial position in future periods if anticipated events and key assumptions, such as the timing andamounts of sublease rental income, either change or do not materialize.

F-10



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Stock-Based Compensation

Change in Accounting Principle

On December 1, 2005, the beginning of our fiscal year 2006, we adopted SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS No. 123(R)”),which requires the measurement and recognition of compensation expense for all stock-based awards based on estimated fair values. Pro forma disclosure is nolonger an alternative to financial statement recognition. We elected to use the modified prospective transition method as permitted by SFAS No. 123(R) andtherefore have not restated our financial results for prior periods. Under this transition method, the post adoption stock-based compensation expense also includesexpense for all stock-based awards granted prior to, but not yet vested as of December 1, 2005, and the estimated fair values of which were established on thegrant dates in accordance with the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes previousaccounting under Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees, and also amends SFAS No. 95, Statement ofCash Flows. In March 2005, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 107 providing supplementalimplementation guidance for SFAS No. 123(R). We have applied the provisions of SAB No. 107 in our adoption of SFAS No. 123(R). Our fiscal year 2007 and2006 financial results reflect the impact of SFAS No. 123(R).

Prior to the adoption of SFAS No. 123(R), we accounted for stock-based awards to employees and directors using the intrinsic value method in accordancewith APB No. 25 as allowed under SFAS No. 123. Under the intrinsic value method, no stock-based compensation expense for employee stock options had beenrecognized in our Consolidated Statements of Operations prior to fiscal year 2006, because the exercise price of our stock options granted to employees anddirectors equaled the fair market value of the underlying stock at the date of grant. Prior to fiscal year 2006, the stock-based compensation expense mainlycomprised of compensation associated with non-employee equity awards, stock options assumed from business combinations and stock options granted beforeour initial public offering.

Upon adoption of SFAS No. 123(R), we selected the Black-Scholes option pricing model as the most appropriate method for determining the estimatedfair value for stock-based awards. The Black-Scholes model requires the use of highly subjective and complex assumptions which determine the fair value ofstock-based awards, including the option’s expected term and the price volatility of the underlying stock. We determined that a blend of implied volatility andhistorical volatility is more reflective of the market conditions and a better indicator of expected volatility than solely using historical volatility. The value of theportion of the post adoption award that is ultimately expected to vest is recognized as expense over the requisite service (vesting) periods on a straight-line basisin our Consolidated Statements of Operations and the expense has been reduced for estimated forfeitures. SFAS No. 123(R) requires forfeitures to be estimated atthe time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Prior to fiscal year 2006, we accounted forforfeitures as they occurred for the purposes of the disclosure of pro forma information under SFAS No. 123. For stock options granted prior to December 1,2005, stock-based compensation is amortized on an accelerated basis and will continue to be recognized using the accelerated approach. The cumulative impactdue to the change in accounting principles for forfeitures was immaterial, and therefore was not recorded as a separate line item in our Consolidated FinancialStatements.

As a result of adopting SFAS No. 123(R) in fiscal year 2006, income before income taxes and net income in fiscal year 2006 were lower by $15.8 millionand $13.5 million, respectively, and both basic and diluted earnings per share in fiscal year 2006 were $0.06 per share lower than if we had continued to accountfor stock-based compensation under APB No. 25. In addition, prior to the adoption of SFAS No. 123(R), we presented the tax benefit of stock option exercises asoperating cash flows. $21.5 million of tax benefit resulting from tax deductions in excess of the tax benefit related to compensation cost recognized for thoseoptions are classified as financing cash flows in fiscal year 2006 due to the adoption of SFAS No. 123(R).

F-11




Upon adoption of SFAS No. 123(R), we have elected the “long form” method for calculating the tax effects of stock-based compensation pursuant toSFAS No. 123(R), paragraph 81. Under the “long form” method, we determine the beginning balance of the additional paid-in capital pool (“APIC pool”) relatedto the tax effects of the employee stock-based compensation “as if” we had adopted the recognition provisions of SFAS No. 123 since its effective date ofJanuary 1, 1995. We also determine the subsequent impact on the APIC pool and Consolidated Statement of Cash Flows of the tax effect of employeestock–based compensation awards that were issued after the adoption of SFAS No. 123(R) and outstanding at the adoption date.

Consistent with prior years, we use the “with and without” approach as described in EITF Topic No. D-32 in determining the order in which our taxattributes are utilized. The “with and without” approach results in the recognition of the windfall stock option tax benefits only after all other tax attributes,except for pre-acquisition tax attributes of acquired entities, have been considered in the annual tax accrual computation. Also consistent with prior years, weconsider the indirect effects of the windfall deduction on the computation of other tax attributes, such as the R&D credit deduction, as an additional component ofequity. This incremental tax effect is recorded to additional paid in capital when realized.

Prior Year Pro forma Disclosure

If the fair value based method prescribed by SFAS No. 123 had been applied in measuring employee stock-based compensation expenses in fiscal year2005, the pro forma effect on net income and net income per share would have been as follows (in thousands, except income per share amounts):

Year EndedNovember 30,

2005 Net income, as reported $ 72,555

Stock-based compensation expense for employees previously determined under intrinsic value method, net of taxeffect 24

Stock-based compensation expense determined under fair value method, net of related tax effects (22,993)

Pro forma net income, after effect of stock-based compensation for employees $ 49,586

Basic net income per share: As reported $ 0.34 Pro forma $ 0.23

Diluted net income per share: As reported $ 0.32 Pro forma $ 0.23

Income Taxes

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

We assess the likelihood that we will be able to recover our deferred tax assets. We consider all available evidence, both positive and negative, includinghistorical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies inassessing the need for the valuation allowance. If it is not more likely than not that we will recover our deferred tax assets, we will increase our provision fortaxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Foreign Currency

All of our foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities of these subsidiariesare translated into U.S. dollars at exchange rates at the balance sheet date. Income and expense items are translated at average exchange rates for theperiod. Cumulative translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Foreigncurrency transaction gains and losses, derived from monetary assets and liabilities stated in a currency other than the functional currency, are recorded in theConsolidated Statements of Operations. We recorded foreign currency transaction gains and (losses) of $(1.5) million, $0.8 million and $(1.4) million in fiscalyears 2007, 2006 and 2005, respectively, in Other Income (Expense) in our Consolidated Statements of Operations.

Capitalized Software Development Costs

Costs related to research and development are generally charged to expense as incurred. Capitalization of material software development costs beginswhen a product’s technological feasibility has been established in accordance with the provisions of SFAS No. 86, Accounting for the Costs of ComputerSoftware to be Sold, Leased, or Otherwise Marketed. To date, the period between achieving technological feasibility, which we have defined as the establishmentof a working model, and which typically occurs when beta testing commences, and the general availability of such software has been very short. Accordingly,software development costs have been expensed as incurred.

Costs related to software acquired, developed or modified solely to meet our internal requirements and for which there are no substantive plans to marketare capitalized in accordance with the provisions of AICPA SOP No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for InternalUse. Costs incurred after the preliminary planning stage of the project and after management has authorized and committed funds to the project are capitalized.Costs capitalized for computer software developed or obtained for internal use are included in Property and Equipment on the Consolidated Balance Sheets.

Advertising Expense

Advertising costs are expensed as incurred and totaled approximately $1.1 million, $1.2 million and $1.1 million in fiscal years 2007, 2006 and 2005,respectively.

Derivative Financial Instruments

We account for derivative instruments and hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Thisstatement establishes accounting and reporting standards for derivative instruments and requires recognition of all derivatives as assets or liabilities in thestatement of financial position and measurement of those instruments at fair value. Derivatives that are not hedges must be adjusted to fair value throughearnings. If the derivative is a hedge, depending on the nature of the hedge, its change in fair value will either be offset against the change in fair value of thehedged asset or liability, firm commitment through earnings or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings.

To manage currency exposure related to net assets and liabilities denominated in foreign currencies, we enter into forward contracts for certain foreigndenominated assets or liabilities. We do not enter into derivative financial instruments for trading purposes. We had nine outstanding forward contracts with atotal notional amount of $83.6 million as of November 30, 2007. These derivative instruments are not designed for hedge accounting and are adjusted to fairvalue through Other Income (Expense) under the Consolidated Statements of Operations. The gain on fair value of these forward contracts as of November 30,2007, was approximately $0.4 million.

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These derivative instruments are not intended to subject us to material balance sheet risk due to exchange rate movements because gains and losses onthese derivatives are intended to offset gains and losses on the foreign currency denominated assets and liabilities being hedged. As of November 30, 2007, theoutstanding balance sheet hedging derivatives had maturities of 30 days or less.

Recent Accounting Pronouncements

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

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

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment ofFASB Statement No. 115 (“SFAS No. 159”). SFAS No. 159 expands the use of fair value accounting but does not affect existing standards which require assetsor liabilities to be carried at fair value. The objective of SFAS No. 159 is to improve financial reporting by providing companies with the opportunity to mitigatevolatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. UnderSFAS No. 159, a company may elect to use fair value to measure eligible items at specified election dates and report unrealized gains and losses on items forwhich the fair value option has been elected in earnings at each subsequent reporting date. Eligible items include, but are not limited to, accounts and loansreceivable, available-for-sale and held-to-maturity securities, equity method investments, accounts payable, guarantees, issued debt and firm commitments. Ifelected, SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We are currently assessing whether fair value accounting is appropriatefor any of our eligible items and cannot estimate the impact, if any, on our results of operations and financial position.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes aframework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 iseffective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods of those fiscal years. We are currently assessingthe impact that SFAS No. 157 will have on our results of operations and financial position.

In June 2006, the FASB issued Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109(“FIN 48”). This interpretation requires companies to

F-14



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) determine whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of thebenefit can be recorded in the financial statements. FIN 48 provides guidance on de-recognition, classification, accounting in interim periods and disclosurerequirements for tax contingencies. FIN 48 is effective for fiscal years beginning after December 15, 2006, and is required to be adopted by us in the first quarterof fiscal year 2008. The differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amountsreported after adoption will be accounted for as a cumulative-effect adjustment recorded to the beginning balance of retained earnings. In addition, in May 2007,the FASB published FASB Staff Position No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (“FSP FIN 48-1”). FSP FIN 48-1 is anamendment to FIN 48. It clarifies how an enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previouslyunrecognized tax benefits. FSP FIN 48-1 is effective upon the initial adoption of FIN 48, and therefore will be adopted by us in the first quarter of fiscal year2008. The actual impact of the adoption of FIN 48 and FSP FIN 48-1 in our results of operations and financial position will depend on facts and circumstancesthat exist on the date of adoption. We are currently assessing the impact of the adoption of FIN 48 and FSP FIN 48-1.

In June 2007, the FASB ratified Emerging Issues Task Force (“EITF”) Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods orServices Received for Use in Future Research and Development Activities (“EITF No. 07-3”). EITF No. 07-3 requires that nonrefundable advance payments forgoods or services that will be used or rendered for future research and development activities be deferred and capitalized and recognized as an expense as thegoods are delivered or the related services are performed. EITF No. 07-3 is effective, on a prospective basis, for fiscal years beginning after December 15, 2007.We are currently evaluating the effect that the adoption of EITF No. 07-3 will have on our consolidated results of operations and financial condition.

In the beginning of fiscal year 2007, we adopted SFAS No. 154, Accounting for Changes and Error Corrections, which had no material effect on ourconsolidated results of operations and financial position.

3. Business Combination

Acquisition in Fiscal Year 2007

Spotfire Holdings, Inc.

On June 5, 2007, we acquired Spotfire Holdings, Inc. (“Spotfire”), a privately held company headquartered in Massachusetts and a leading provider ofnext generation business intelligence software, which is now part of our business optimization product line. Pursuant to an Agreement and Plan of Merger (the“Merger Agreement”), we acquired all the outstanding equity excluding the unvested options of Spotfire for approximately $190.4 million in cash plustransaction costs. In addition, pursuant to the Merger Agreement, each unvested option of Spotfire was canceled and substituted with an option to purchase ourcommon stock (each, a “Substitute Option”). We granted approximately 887,000 shares of Substitute Options on the closing date of the acquisition. SubstituteOptions were valued using the Black-Scholes model on the day of the acquisition with a fair value of $5.4 million and will be expensed as stock-basedcompensation on a straight-line basis over the remaining vesting period of the underlying awards.

The acquisition was accounted for using the purchase method of accounting. A summary of the purchase price of the acquisition is as follows (inthousands):

Cash paid $ 190,430Direct transaction costs 3,226

Total purchase price $ 193,656

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The allocation of the estimated purchase price for this acquisition, as of the date of the acquisition, is as follows (in thousands):

Cash acquired $ 10,408 Other assets acquired 43,371 Deferred income tax assets 11,908 Identifiable intangible assets 72,300 Acquired in-process research and development 1,600 Goodwill 121,447

Total assets acquired 261,034 Liabilities assumed (35,394)Deferred income tax liabilities (31,984)

Total liabilities assumed (67,378)

Net assets acquired $193,656

The amount of the total purchase price allocated to the tangible assets acquired was assigned based on the fair values as of the date of the acquisition. Thefair value assigned to identifiable intangible assets acquired was determined using the income approach which discounts expected future cash flows to presentvalue using estimated assumptions determined by management. We believe that these identified intangible assets had no residual value after their estimatedeconomic useful lives. Our methodology for allocating the purchase price relating to acquired in-process research and development (“IPR&D”) was determinedthrough established valuation techniques. Acquired IPR&D was expensed upon acquisition as technological feasibility had not been established and no futurealternate use existed. These identifiable intangible assets are subject to amortization on a straight line basis as this best approximates the benefit period related tothese assets (in thousands, except amortization period):

Gross Amountat Acquisition

Date

Weighted AverageAmortization

PeriodExisting technology $ 35,600 4.0 yearsCustomer base 18,300 7.0 yearsPatents/core technology 5,500 4.0 yearsTrademarks 1,500 5.0 yearsNon-compete agreements 800 2.0 yearsMaintenance agreements 10,600 6.8 years

$ 72,300

The excess of the purchase price over the identified tangible and intangible assets was recorded as goodwill. We anticipate that none of the goodwillrecorded in connection with the Spotfire acquisition will be deductible for income tax purposes.

The purchase method of accounting requires us to reduce Spotfire’s deferred revenue as of the acquisition date to an amount equal to the fair value of theservice and maintenance obligations assumed from Spotfire. We based our determination of the fair value of the service and maintenance obligations throughestablished valuation techniques using estimates and assumptions provided by management. As a result, in allocating the purchase price, we recorded anadjustment to reduce the carrying value of Spotfire’s deferred revenue resulting in lower revenues in periods following the acquisition than Spotfire would haveachieved as a separate company.

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The acquired tangible assets included $34.3 million of accounts receivable for contracts with payment terms, of which $21.4 million are due within oneyear and are included in Other Current Assets and the remaining $12.9 million are due after one year and are classified as non-current Other Assets on theBalance Sheet. As the fair value of the service and maintenance obligations assumed is less than the amount of accounts receivable with future payment terms,our cash flows related to these contracts are anticipated to be greater than revenues recorded from these contracts.

Spotfire had a revolving line of credit with a bank secured by certain Spotfire property and equipment. On the closing date of the acquisition, theoutstanding balance under the revolving line of credit of $4.0 million was paid in full and the associated revolving line of credit loan agreement was terminated.

The results of Spotfire’s operations have been included in the Consolidated Financial Statements since the acquisition date. The following unaudited proforma adjusted summary reflects the Company’s condensed consolidated results of operations for the years ended November 30, 2007 and 2006, assumingSpotfire had been acquired at the beginning of the periods, and includes the acquired IPR&D charge of $1.6 million. The unaudited pro forma adjusted summaryis not intended to be indicative of future results (in thousands, except per share data):

Year Ended November 30, 2007 2006 (Unaudited)Pro forma adjusted total revenue $ 600,987 $ 557,310

Pro forma adjusted net income $ 40,098 $ 47,246

Pro forma adjusted net income per share: Basic $ 0.20 $ 0.23

Diluted $ 0.19 $ 0.22

Acquisitions in Fiscal Year 2005

Velosel Corporation

On August 1, 2005, we acquired certain assets of Velosel Corporation (“Velosel”), a provider of customer and product information management. The totalpurchase price was approximately $3.4 million paid in cash. Substantially all of the purchase price was related to amortizable intangible assets, includingdeveloped technologies. The acquired intangible assets are amortizable over their estimated useful lives of three to six years. No goodwill has been recorded forthis acquisition as the fair value of acquired assets exceeded the purchase price.

The results of operations of Velosel have been included in our Consolidated Statements of Operations from August 1, 2005. As the effect of thisacquisition would not have been material to our results of operations, pro forma results as if we had acquired Velosel at the beginning of fiscal year 2005 are notpresented in our Consolidated Financial Statements.

ObjectStar International Limited

On March 7, 2005, we acquired substantially all of the assets and certain liabilities of ObjectStar International Limited (“ObjectStar”), a privately heldnative mainframe integration solutions provider. The total purchase price was approximately $21.4 million, which included $3.3 million assumed liabilities. Werecorded intangible assets of $13.9 million and goodwill of $7.4 million for the transaction. ObjectStar’s existing technology had reached technologicalfeasibility at the time of the acquisition; therefore we did not record an

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) in-process research and development charge. The ObjectStar acquisition was accounted for under SFAS No. 141, Business Combinations, and certain specifiedprovisions of SFAS No. 142, Goodwill and Other Intangible Assets. The assets acquired and liabilities assumed are based on their fair values at the date ofacquisition. Amounts allocated to developed technology, patents/core technology and customer base are amortized over their estimated useful lives of five years.Maintenance agreements are amortized over their estimated useful lives of nine years and non-competition agreements are amortized over their estimated usefullives of three years. Goodwill is not being amortized and will be tested for impairment annually or sooner if circumstances indicate that impairment may haveoccurred.

The results of operations of ObjectStar have been included in our Consolidated Statements of Operations from March 7, 2005. As the effect of thisacquisition would not have been material to our results of operations, pro forma results as if we had acquired ObjectStar at the beginning of fiscal year 2005 arenot presented in our Consolidated Financial Statements.

4. Investment in Marketable Securities

Marketable securities, which are classified as available-for-sale, are summarized below as of November 30, 2007 and 2006 (in thousands):

Classified on Balance Sheet

Purchased/Amortized

Cost

GrossUnrealized

Gains

GrossUnrealized

Losses AggregateFair Value

Cashand Cash

Equivalents Short-termInvestments

As of November 30, 2007: U.S. Government debt securities $ 21,162 $ 373 $ — $ 21,535 $ — $ 21,535Corporate debt securities 36,585 130 (153) 36,562 — 36,562Asset-backed securities 20,189 87 (47) 20,229 — 20,229Mortgage-backed securities 17,241 68 (101) 17,208 — 17,208Money market funds 46,019 — — 46,019 46,019 —

$ 141,196 $ 658 $ (301) $ 141,553 $ 46,019 $ 95,534

As of November 30, 2006: U.S. Government debt securities $ 104,759 $ 97 $ (313) $ 104,543 $ — $ 104,543Corporate debt securities 178,987 104 (371) 178,720 21,758 156,962Asset-backed securities 90,223 272 (165) 90,330 — 90,330Mortgage-backed securities 48,759 113 (49) 48,823 — 48,823Money market funds 3,597 — — 3,597 3,597 —

$ 426,325 $ 586 $ (898) $ 426,013 $ 25,355 $ 400,658

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

November 30, 2007 2006Contractual maturities:

Less than one year $ 12,682 $ 165,453One to three years 82,852 235,205

$ 95,534 $ 400,658

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The maturities of asset-backed and mortgage-backed securities were primarily based upon assumed prepayment forecasts utilizing interest rate scenariosand mortgage loan characteristics.

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

Year Ended November 30, 2007 2006 2005 Realized gains $ 411 $ 205 $ — Realized losses (723) (160) (275)

Net realized gains (losses) $ (312) $ 45 $ (275)

The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category andlength of time that individual securities have been in a continuous unrealized loss position, as of November 30, 2007 (in thousands):

Less than 12 months More than 12 months Total

Fair

Value

GrossUnrealized

Losses Fair

Value

GrossUnrealized

Losses Fair

Value

GrossUnrealized

Losses Corporate debt securities $ 17,581 $ (133) $ 7,435 $ (20) $ 25,016 $ (153)Asset-backed securities 436 (37) 4,997 (10) 5,433 (47)Mortgage-backed securities 5,122 (101) — — 5,122 (101)

$ 23,139 $ (271) $ 12,432 $ (30) $ 35,571 $ (301)

As of November 30, 2007, the investments that we hold are all high investment grade. The unrealized losses on our investments were due primarily tochange in interest rates and market and credit conditions of the underlying securities. For all investments other than those with an other-than-temporaryimpairment, it is expected that our investments will not be settled at a price less than the amortized cost of the investment. Because we have the ability and intentto hold these investments until a recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired as ofNovember 30, 2007. We estimated the fair values based on quoted market prices or pricing models provided by credit rating agencies. These estimated fairvalues many not be representative of actual values that could have been realized as of year-end or that will be realized in the future.

We periodically assess whether significant facts and circumstance have arisen to indicate an adverse effect on the fair value of the underlying investmentthat might indicate material deterioration in the creditworthiness of our issuers. During our year end assessment, we determined the declines in value of certaininvestments associated with asset-backed securities to be other-than-temporary. Accordingly, we recorded impairments of approximately $0.3 million in fiscalyear 2007. We include these impairments in Other Income (Expense) in the Consolidated Statements of Operations. Depending on market conditions, we mayrecord additional impairments on our investment portfolio in the future.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 5. Accounts Receivable and Allowances for Doubtful Accounts, Returns and Discounts

Accounts receivable, net, by category is as follows (in thousands):

November 30, 2007 2006 Accounts receivable $ 154,292 $ 141,493 Unbilled fees and services 11,697 11,903

165,989 153,396 Less: Allowances for doubtful accounts, returns and discounts (4,259) (4,255)

Net accounts receivable $ 161,730 $ 149,141

Trade accounts receivable are recorded at invoiced or to be invoiced amounts and do not bear interest. We perform ongoing credit evaluations of ourcustomers’ financial condition and, generally, require no collateral from our customers. Allowances for doubtful accounts, returns and discounts were establishedbased on various factors including credit profiles of our customers, contractual terms and conditions, historical payments, returns and discounts experience andcurrent economic trends. We review our allowances monthly by assessing individual accounts receivable over a specific aging and amount, and all other balanceson a pooled basis based on historical collection experience. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected.

The following is a summary of activities in allowances for doubtful accounts, returns and discounts for the fiscal years indicated (in thousands):

Year ended November 30,

AllowancesBeginningBalance

ChargedAgainstRevenue

Chargedto

Expenses

Write-offs,Adjustments,

Net ofRecovery

AllowancesEndingBalance

2007 $ 4,255 $ 763 $ (525) $ (234) $ 4,2592006 4,521 2,770 (1,000) (2,036) 4,2552005 3,845 1,599 197 (1,120) 4,521

6. Property and Equipment

Property and equipment by category is as follows (in thousands):

November 30, 2007 2006 Buildings $ 77,938 $ 77,938 Equipment and software 55,530 65,468 Furniture and fixtures 7,813 6,956 Facility improvements 45,621 43,101

186,902 193,463 Less: Accumulated depreciation (75,512) (79,676)

$ 111,390 $ 113,787

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Building Acquisition

In June 2003, we purchased the four buildings comprising our corporate headquarters in Palo Alto, California. In connection with the purchase we enteredinto a 51-year lease of the land upon which the buildings are located. The lease was paid in advance in the amount of $28.0 million; see Note 11 for furtherdetails. The total consideration paid for the land lease and the buildings was $108.0 million, which was comprised of $54.0 million in cash and a $54.0 millionmortgage note payable; see Notes 9 and 11 for further details.

The net purchase price of the buildings of $78.0 million is stated at cost, net of accumulated depreciation, and is included as a component of Property andEquipment on the Consolidated Balance Sheets. Depreciation is computed using the straight-line method over the estimated useful life of 25 years.

7. Goodwill and Other Acquired Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the fiscal years ended November 30, 2007 and 2006 are as follows (in thousands):

Goodwill Balance as of November 30, 2005 $ 261,075

Foreign currency translation 21,083 Tax benefit related to acquired deferred tax assets (7,716)

Balance as of November 30, 2006 274,442 Goodwill recorded for the Spotfire acquisition 121,447 Foreign currency translation 16,367

Balance as of November 30, 2007 $ 412,256

Acquired Intangible Assets

Our acquired intangible assets are subject to amortization on a straight line basis over their estimated useful lives as follows:

Estimated

Life Weighted Average

Remaining LifeDeveloped technologies 4 to 5 years 3.1 yearsCustomer base 3 to 7 years 5.3 yearsPatents/core technologies 4 to 8 years 4.1 yearsTrademarks 4 to 5 years 3.1 yearsNon-compete agreements 2 to 3 years 1.5 yearsMaintenance agreements 5 to 9 years 5.6 years

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The carrying values of our amortized acquired intangible assets are as follows (in thousands):

November 30, 2007 November 30, 2006

GrossCarryingAmount

AccumulatedAmortization

NetCarryingAmount

GrossCarryingAmount

AccumulatedAmortization

NetCarryingAmount

Developed technologies $ 88,171 $ (45,460) $ 42,711 $ 48,515 $ (34,279) $ 14,236Customer base 43,112 (19,228) 23,884 22,721 (13,561) 9,160Patents/core technologies 23,143 (8,412) 14,731 16,500 (5,201) 11,299Trademarks 7,170 (4,530) 2,640 5,398 (3,478) 1,920Non-compete agreements 1,480 (863) 617 680 (597) 83OEM customer royalty agreements 1,000 (1,000) — 1,000 (917) 83Maintenance agreements 37,892 (11,545) 26,347 25,549 (7,258) 18,291

$ 201,968 $ (91,038) $ 110,930 $ 120,363 $ (65,291) $ 55,072

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

Year Ended November 30, 2007 2006 2005Amortization of acquired intangible assets:

In cost of revenue $ 10,326 $ 5,322 $ 5,958In operating expenses 13,164 9,454 8,912

$ 23,490 $ 14,776 $ 14,870

The estimated future amortization of acquired intangible assets as of November 30, 2007 is as follows (in thousands):

Year ending November 30, 2008 $ 32,0832009 26,8572010 21,2942011 15,4872012 7,572Thereafter 7,637

$ 110,930

8. Accrued Restructuring and Excess Facilities Costs

Accrued Integration Costs

In connection with our acquisitions of Spotfire in fiscal year 2007, Staffware plc (“Staffware”) in fiscal year 2004 and Talarian Corporation (“Talarian”) infiscal year 2002 we recorded accruals for acquisition integration liabilities, which include the incremental costs to exit and consolidate activities at acquiredlocations, termination of certain employees, and other costs to integrate operating locations and other activities of the acquired companies. The accruals wererecorded using the guidance provided by EITF No. 95-3, Recognition of Liabilities

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) in a Purchase Business Combination, which requires that these acquisition integration expenses, which are not associated with the generation of future revenuesand have no future economic benefit, be reflected as assumed liabilities in the allocation of the purchase price to the net assets acquired.

In connection with our acquisition of Spotfire in the third quarter of fiscal year 2007, we recorded an accrual of $0.4 million for acquisition integrationliabilities, which include the incremental cost associated with the termination of certain employees; as of November 30, 2007, these employees were allterminated.

In connection with our acquisition of Staffware in June 2004, we recorded an accrual of $2.9 million for the estimated expenses due to the Staffwarefacilities that we expected to abandon. In addition, we recorded an accrual of $2.6 million for severance related to the termination of redundant Staffwarepersonnel and $0.2 million related to the cancellation of certain marketing programs.

In connection with the acquisition of Talarian in April 2002, we abandoned the Talarian facilities and recorded an accrual of $7.4 million for the estimatedlosses to be incurred to sublet such facilities. In addition, we recorded an accrual of $1.0 million for severance related to the termination of redundant personnel.As of November 30, 2005, we had determined that there were no future liabilities relating to Talarian acquisition integration costs and consequently released theexcess accrual of $0.9 million, offsetting goodwill by the same amount.

Accrued Restructuring Costs

2002 Restructuring Program. In fiscal year 2002, we recorded restructuring charges totaling $49.3 million, consisting of $47.6 million related toconsolidation of facilities and $1.7 million for headcount reductions which had been fully utilized. These restructuring charges were recorded to align our coststructure with changing market conditions. We expected to fulfill our cash obligation no later than 2011. We have been working with corporate real estatebrokers to sublease unoccupied facilities. Currently, a majority of these vacated facilities are occupied by our tenants.

In the third quarter of fiscal year 2004, we recorded $2.2 million in additional restructuring charges related to properties vacated in connection withfacilities consolidation. The additional restructuring charges resulted from revisions to our estimates of future sublease income due to continued weakness of theapplicable real estate market. The estimated excess facilities costs were based on our contractual obligations, net of estimated sublease income, based on currentcomparable rates for leases in their respective markets.

In the fourth quarter of fiscal year 2006, we recorded a $1.0 million credit adjustment to the restructuring charges related to properties vacated inconnection with facilities consolidation. The adjustment resulted from revisions to our estimates of future sublease income due to the recovery of the applicablereal estate markets and adding a new tenant to the remaining vacated facilities.

In the third quarter of fiscal year 2007, we recorded a $1.1 million credit adjustment to the restructuring charges related to properties vacated in connectionwith facilities consolidation. The adjustment resulted from revisions to our estimates of future sublease income due to the recovery of the applicable real estatemarket.

2005 Restructuring Program. In fiscal year 2005, we initiated a restructuring plan designed to re-align our resources and cost structure and, accordingly,recognized a restructuring charge of approximately $3.9 million for the resulting workforce reduction. The restructuring plan eliminated 49 employees, across allfunctions and primarily in our European operations; this plan had been completed by the end of fiscal year 2006.

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The following is a summary of activities in accrued restructuring and integration costs for each of the three fiscal years ended November 30, 2007, 2006and 2005 (in thousands):

Accrued Excess Facilities Accrued Severance and Other

Headquarter

Facilities Talarian

Integration Staffware

Integration Subtotal Restructuring AcquisitionIntegration Subtotal Total

As of November 30, 2004 $ 34,421 $ 2,101 $ 2,845 $ 39,367 $ — $ 1,055 $ 1,055 $ 40,422 Restructuring charge — — — — 3,905 — 3,905 3,905 Acquisition integration costs — (878) — (878) — (352) (352) (1,230)Cash utilized (6,196) (1,223) (827) (8,246) (3,158) (690) (3,848) (12,094)Non-cash write-down of furniture and fixture (120) — (881) (1,001) — — — (1,001)

As of November 30, 2005 28,105 — 1,137 29,242 747 13 760 30,002 Restructuring adjustment (1,042) — — (1,042) — — — (1,042)Cash utilized (5,219) — (580) (5,799) (747) (13) (760) (6,559)

As of November 30, 2006 21,844 — 557 22,401 — — — 22,401 Restructuring adjustment (1,095) — — (1,095) — — — (1,095)Acquisition integration costs — — — — — 404 404 404 Cash utilized (5,153) — 77 (5,076) — (401) (401) (5,477)

As of November 30, 2007 $ 15,596 $ — $ 634 $ 16,230 $ — $ 3 $ 3 $ 16,233

The remaining accrued excess facilities costs represent the estimated loss on abandoned facilities, net of sublease income, which is expected to be paidover the next three years. As of November 30, 2007, $10.8 million of the $16.2 million accrued restructuring and excess facilities costs were classified aslong-term liabilities based on our current expectation that we will have to pay the lease payments over the remaining term of the related leases.

9. Long-Term Debt and Line of Credit

Mortgage Note Payable

In connection with the purchase of our corporate headquarters in June 2003, we recorded a $54.0 million mortgage note payable to a financial institutioncollateralized by the commercial real property acquired. The balance on the mortgage note payable was $46.5 million and $48.3 million as of November 30, 2007and 2006, respectively.

The mortgage note payable carries a 20-year amortization, and in the second quarter of fiscal year 2007, we amended the mortgage note payable such thatit now carries a fixed annual interest rate of 5.50%. The $34.4 million principal balance that will be remaining at the end of the 10-year term will be due as a finallump sum payment on July 1, 2013. Under the currently applicable terms of the mortgage note agreements, we are prohibited from acquiring another companywithout prior consent from the lender unless we maintain at least $50.0 million of cash or cash equivalents and meet other non-financial terms as defined in theagreements. In addition, we are subject to certain non-financial covenants as defined in the agreements. As of November 30, 2007, we were in compliance withall covenants.

Line of Credit

We have a $20.0 million revolving line of credit that matures on June 19, 2008. The revolving line of credit is available for cash borrowings and for theissuance of letters of credit up to $20.0 million. As of November 30, 2007, no borrowings were outstanding under the facility and a $13.0 million irrevocableletter of credit was outstanding, leaving $7.0 million of available credit for additional letters of credit or cash borrowings. The $13.0

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) million irrevocable letter of credit outstanding was issued in connection with the mortgage note payable. The letter of credit automatically renews for successiveone-year periods, until the mortgage note payable has been satisfied in full. We are required to maintain a minimum of $40.0 million in unrestricted cash, cashequivalents and short-term investments, net of total current and long-term indebtedness, as well as comply with other non-financial covenants defined in theagreement. As of November 30, 2007, we were in compliance with all covenants under the revolving line of credit.

10. Other Balance Sheet Components

Certain other balance sheet components are summarized below (in thousands):

November 30, 2007 2006Prepaid expenses and other current assets:

Current deferred tax asset $ 9,672 $ 18,569Pre-acquisition receivable—Spotfire(1)

24,556 — Consumption, goods and services; and value added tax recoverable 7,409 5,577Prepaid royalties 3,034 914Other 8,869 10,639

$ 53,540 $ 35,699

Other non-current assets: Prepaid land lease $ 25,026 $ 25,575Pre-acquisition receivable—Spotfire, net of current portion(1)

8,154 — Restricted cash 3,662 3,304Private equity investments, net 896 1,636Other 9,797 6,696

$ 47,535 $ 37,211

Accrued liabilities: Compensation and benefits $ 52,925 $ 50,113Taxes 12,962 10,312Current deferred tax liability 7,759 — Other 21,880 13,922

$ 95,526 $ 74,347

(1) Accounts receivable for contracts with payment terms related to Spotfire acquisition, which had not been billed as of the acquisition date; see Note 3 forfurther details.

11. Commitments and Contingencies

Letters of Credit and Bank Guarantees

In connection with the mortgage note payable, we entered into an irrevocable letter of credit in the amount of $13.0 million; see Notes 6 and 9 for furtherdetails. The letter of credit is collateralized by the line of credit and automatically renews for successive one-year periods until the mortgage note payable hasbeen satisfied in full.

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In connection with a facility lease, we have an irrevocable letter of credit in the amount of $4.5 million. The letter of credit automatically renews annuallyfor the duration of the lease term, which expires in December 2010. We are subject to certain financial covenants as defined in the letter of credit agreement. Asof November 30, we were in compliance with all letter of credit covenants.

As of November 30, 2007, in connection with bank guarantees issued by some of our international subsidiaries, we had $3.7 million of restricted cashwhich is included in Other Assets on our Consolidated Balance Sheets.

Prepaid Land Lease

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

Operating Commitments

At various locations worldwide, we lease office space and equipment under non-cancelable operating leases with various expiration dates through April2015. Rental expense was approximately $10.4 million, $8.8 million and $8.5 million in fiscal years 2007, 2006 and 2005, respectively.

As of November 30, 2007, contractual commitments associated with indebtedness and lease obligations were as follows (in thousands):

Total 2008 2009 2010 2011 2012 ThereafterOperating commitments:

Debt principal $ 46,482 $ 1,924 $ 2,033 $ 2,148 $ 2,269 $ 2,397 $ 35,711Debt interest 12,676 2,508 2,400 2,285 2,164 2,036 1,283Operating leases 31,704 7,245 6,222 6,209 4,435 2,986 4,607

90,862 11,677 10,655 10,642 8,868 7,419 41,601

Restructuring-related commitments: Gross lease obligations 22,838 6,924 7,551 7,720 643 — — Estimated sublease income (6,828) (2,118) (2,236) (2,282) (192) — —

16,010 4,806 5,315 5,438 451 — —

Total commitments $ 106,872 $ 16,483 $ 15,970 $ 16,080 $ 9,319 $ 7,419 $ 41,601

Future minimum lease payments under restructured non-cancelable operating leases as of November 30, 2007, are included in Accrued Restructuring andExcess Facilities Costs on our Consolidated Balance Sheets; see Note 8 for further details.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Derivative Instruments

We conduct business in the Americas; Europe, the Middle East and Africa (“EMEA”) and Asia Pacific and Japan (“APJ”). As a result, our financial resultscould be affected by factors such as changes in foreign currency exchange rates or changes in economic conditions in foreign markets. The majority of our salesare currently made in U.S. dollars. We enter into forward contracts with financial institutions to manage our currency exposure related to net assets and liabilitiesdenominated in foreign currencies. These forward contracts are generally settled monthly. Our forward contracts reduce, but do not eliminate, the impact ofcurrency exchange rate movements. We do not enter into derivative financial instruments for trading purposes. Gains and losses on forward contracts areincluded in Other Income (Expense) in our Consolidated Statements of Operations.

We had nine outstanding forward contracts with total notional amounts of $83.6 million as of November 30, 2007, which are summarized as follows (inthousands):

NotionalValue

Local Currency

NotionalValueUSD

Fair ValueGain (Loss)

USD Forward contracts sold:

EURO 32,400 $ 47,605 $ 311 Australian dollar 4,900 4,334 (11)British pound 8,700 17,882 142 Indian rupee 20,000 506 (6)Japanese yen 186,000 1,679 12 Singapore dollar 2,500 1,732 2 South African rand 52,000 7,627 (92)Swiss franc 900 799 12

Forward contracts purchased: Swedish krona 9,100 1,427 (18)

$ 83,591 $ 352

Indemnifications

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

To date, we have incurred costs for the payment of legal fees in connection with the legal proceedings detailed in Note 12.

12. Legal Proceedings

Securities Class Action

In May 2005, three purported shareholder class action complaints were filed against us and several of our officers in the U.S. District Court for theNorthern District of California. The plaintiffs in such actions are seeking to represent a class of purchasers of our common stock from September 21, 2004,through March 1,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 2005. Plaintiffs generally allege that we made false or misleading statements concerning our operating results, our business and internal controls and theintegration of Staffware. The actions were consolidated and in September 2006, the U.S. District Court for the Northern District of California dismissed thelitigation with prejudice. Plaintiffs have filed a notice of appeal. Plaintiffs seek unspecified monetary damages. We intend to defend ourselves vigorously;however, we expect to incur significant costs in mounting such defense.

IPO Allocation Suit

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

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

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

13. Stockholders’ Equity

Preferred Stock

Our certificate of incorporation, as amended and restated, authorizes us to issue 75.0 million shares of $0.001 par value preferred stock. As ofNovember 30, 2007, no preferred stock was issued or outstanding.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Common Stock

Our certificate of incorporation, as amended and restated, authorizes us to issue 1.2 billion shares of $0.001 par value common stock. As of November 30,2007, approximately 191,150,000 shares of common stock were issued and outstanding. The outstanding shares of common stock as of November 30, 2007,include approximately 2,042,000 shares of restricted stock. All of the outstanding shares of restricted stock remain unvested as of November 30, 2007. Thebalance of unvested restricted stock will be forfeited and automatically transferred back to the Company at no cost upon the recipient’s discontinuingemployment for any reason.

Adoption of Stockholder Rights Plan

In February 2004, our Board of Directors adopted a stockholder rights plan designed to guard against partial tender offers and other coercive tactics to gaincontrol of the Company without offering a fair and adequate price and terms to all of our stockholders.

In connection with the plan, the Board of Directors declared a dividend of one right (a “Right”) to purchase one one-thousandth share of our Series AParticipating Preferred Stock (“Series A Preferred”) for each share of our common stock outstanding on March 5, 2004 (the “Record Date”). Of the 75.0 millionshares of preferred stock authorized under our certificate of incorporation, as amended and restated, 25.0 million have been designated as Series A Preferred. TheBoard of Directors further directed the issuance of one such right with respect to each share of our common stock that is issued after the Record Date, except incertain circumstances. The rights will expire on March 5, 2014.

The Rights are initially attached to our common stock and will not be traded separately. If a person or a group (an “Acquiring Person”) acquires 15% ormore of our common stock, or announces an intention to make a tender offer for 15% or more of our common stock, the Rights will be distributed and willthereafter be traded separately from the common stock. Each Right will be exercisable for 1/1000th of a share of Series A Preferred at an exercise price of $70(the “Purchase Price”). The Series A Preferred has been structured so that the value of 1/1000th of a share of such preferred stock will approximate the value ofone share of common stock. Upon a person becoming an Acquiring Person, holders of the Rights (other than the Acquiring Person) will have the right to receive,upon exercise, shares of our common stock having a value equal to two times the Purchase Price.

If a person becomes an Acquiring Person and we are acquired in a merger or other business combination, or 50% or more of our assets are sold to anAcquiring Person, the holder of Rights (other than the Acquiring Person) will have the right to receive shares of common stock of the acquiring corporationhaving a value equal to two times the Purchase Price. After a person has become an Acquiring Person, our Board of Directors may, at its option, require theexchange of outstanding Rights (other than those held by the Acquiring Person) for common stock at an exchange ratio of one share of our common stock perRight.

The Board may redeem outstanding rights at any time prior to a person becoming an Acquiring Person at a price of $0.001 per Right. Prior to such time,the terms of the Rights may be amended by the Board of Directors.

Stock Repurchase Programs

In December 2005, our Board of Directors approved an eighteen-month stock repurchase program pursuant to which we were authorized to repurchase upto $100.0 million of our outstanding common stock. In December 2006, the Audit Committee on behalf of our Board of Directors approved an eighteen-monthstock repurchase program pursuant to which we were authorized to repurchase up to $100.0 million of our outstanding common stock. In connection withapproving the December 2006 stock repurchase program, the December 2005 stock

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) repurchase program was terminated and the remaining authorized amount of $23.3 million under the December 2005 stock repurchase program was canceled atthe end of fiscal year 2006.

In April 2007, our Board of Directors approved a new stock repurchase program pursuant to which we may repurchase up to $300.0 million of ouroutstanding common stock from time to time in the open market or through privately negotiated transactions. In connection with approving the April 2007 stockrepurchase program, the December 2006 stock repurchase program was terminated and the remaining authorized amount of $58.2 million under the December2006 stock repurchase program was canceled. As of November 30, 2007, we had $114.9 million available for purchases under the April 2007 stock repurchaseprogram.

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

Year Ended November 30, 2007 2006 2005Cash used for repurchases $ 226,932 $ 77,672 $ 48,300

Shares repurchased 25,575 9,893 6,550

Average price per share $ 8.87 $ 7.85 $ 7.37

In connection with the repurchase activities during fiscal years 2007 and 2006, we classified $49.9 million and $6.2 million of the excess purchase priceover the par value of our common stock to retained earnings and $177.0 million and $71.4 million, respectively, to additional paid-in capital.

During fiscal year 2008, up to January 18, 2008, we have repurchased approximately 4.7 million shares of our outstanding common stock at an averageprice of $7.22 pursuant to the April 2007 stock repurchase program.

14. Stock Benefit Plans and Stock-Based Compensation

Stock Benefit Plans

1996 Stock Option Plan. In 1996, we adopted the 1996 Stock Option Plan (the “1996 Stock Plan”). The 1996 Stock Plan provides for the granting ofstock options and stock awards to our employees and consultants.

Stock options granted under the 1996 Stock Plan may be either incentive stock options or nonqualified stock options. Incentive stock options may begranted only to employees (including officers and directors who are employees). Nonqualified stock options may be granted to our employees and consultants.Stock options are granted generally at fair market value on the date of grant and generally vest over four years. Generally, stock options granted from our 1996Stock Plan prior to December 1, 2005, have a contractual term of ten years from the date of grant, and stock options granted from our 1996 Stock Plan on or afterDecember 1, 2005, have a contractual term of seven years from the date of grant.

In addition to stock options, we may issue restricted stock or restricted stock units to our employees (including officers and directors who are employees).Shares of restricted stock are issued at the time of grant, but held in escrow until they are vested. The recipient of restricted stock becomes the owner of record ofthe stock immediately upon grant, subject to certain restrictions. The balance of unvested restricted stock will be forfeited and automatically transferred back tothe Company at no cost upon the recipient’s discontinuing employment. Upon vesting of restricted stock, the recipient has the option to settle minimumwithholding taxes

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) by electing to have the Company withhold otherwise deliverable shares having a fair market value equal to the required tax obligations (“net-settlement”). Thenet-settlement shares are then immediately cancelled and retired. As vesting of restricted stock units occur, common stock is issued. The recipient of restrictedstock units does not acquire any rights as a stockholder until the restricted stock units are settled upon vesting and the recipient actually receives shares of ourcommon stock.

Our stock option agreements and stock award agreements generally provide for partial accelerated vesting if there is a change in control of theCompany. Also, one employee has entered into an agreement with the Company and certain employees are covered by a change in control and severance planthat provides for partial accelerated vesting if there is a change in control of the Company.

The 1996 Stock Plan provides for an automatic increase to the number of shares of common stock reserved for issuance to be added on the first day ofeach fiscal year, equal to the lesser of (i) 60 million shares, (ii) 5% of the outstanding shares of our common stock or (iii) a lesser amount determined by theBoard of Directors. As of November 30, 2007, there were 26.6 million shares reserved for grants under the 1996 Stock Plan. For fiscal year 2008, no additionalshares were added to the shares of common stock reserved for issuance under the 1996 Stock Plan. As of November 30, 2007, 36.3 million shares underlyingstock options, 2.0 million shares of restricted stock and 0.6 million shares underlying restricted stock units were outstanding under the 1996 Stock Plan.

Talarian Stock Option Plans. In April 2003, we assumed all of the Talarian Stock Option Plans (the “Talarian Plans”) in connection with our acquisitionof Talarian. At the date of acquisition, all outstanding options of Talarian common stock were converted, according to the exchange ratio, into options of ourcommon stock with terms and conditions equivalent to those applicable at the time of conversion. As of November 30, 2007, there were no shares reserved forgrant and approximately 26,000 shares underlying options outstanding under the Talarian Plans.

2000 Extensibility Stock Option Plan. In 2000, we adopted the 2000 Extensibility Stock Option Plan (the “Extensibility Plan”) in connection withoptions assumed in our acquisition of Extensibility. Extensibility employees who continued service with us were granted options with terms and conditionsequivalent to those applicable at the date of acquisition. As of November 30, 2007, there were no shares reserved for grant and approximately 24,000 sharesunderlying options outstanding under the Extensibility Plan.

1998 Director Option Plan. In February 1998, we adopted the 1998 Director Option Plan (the “Director Plan”). As amended in April 2003, the DirectorPlan provides for an automatic initial grant of 100,000 shares to members of the Board who are not our employees (each, an “Outside Director”). At anysubsequent annual re-election, each Outside Director is granted an option to purchase 40,000 additional shares. Options are granted at an exercise price not lessthan the fair market value of the stock on the date of grant and become exercisable over a three-year period with a third of the shares vesting annually. Asamended in February 2006, any Outside Director with over one year of consecutive service prior to the effective date of the Director Plan received an initial grantof 450,000 shares. Options granted prior to February 27, 2006, have a term not to exceed ten years, and options granted on or after February 27, 2006, have aterm not to exceed seven years. As of November 30, 2007, there were 2.1 million shares reserved for grant and 1.3 million shares underlying options outstandingunder the Director Plan.

Employee Stock Purchase Program. In June 1999, we amended the 1996 Stock Plan to include the Employee Stock Purchase Program (“ESPP”).Employees are generally eligible to participate in the ESPP if they are employed by us for more than 20 hours per week and more than five months in a calendaryear and are not (and would not become as a result of being granted an option under the ESPP) 5% stockholders of the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Company. Under the ESPP, eligible employees may select a rate of payroll deduction from 1% to 10% of their eligible compensation subject to certain maximumpurchase limitations.

In fiscal year 2005, our ESPP was revised effective from the purchase period beginning February 1, 2005. Prior to the revision, the plan had an offeringperiod with a maximum duration of two years and consisted of four six-month purchase periods, and the price at which the common stock was purchased was85% of the lesser of the fair market value of our common stock on the first day of the applicable offering period or on the last day of that purchase period. Therevised ESPP offered one six-month offering period, and the price at which the common stock was purchased was 95% of the fair market value of our commonstock on the last day of the offering period. Also, we excluded all non-U.S. employees from the ESPP. The revised ESPP was deemed non-compensatory underthe provisions of SFAS No. 123(R). Accordingly, there was no compensation cost recorded for our ESPP under SFAS No. 123(R) in fiscal year 2006.

In fiscal year 2007, our ESPP was again revised effective from the purchase period beginning February 1, 2007. Under the current amended ESPP,participants are entitled to purchase shares at 85% of the lesser of the fair market value of our common stock on either the first or last trading day of eachsix-month offering period. Also, the revised ESPP offers to certain international employees. Participants may contribute a maximum annual amount of $5,000and no contribution percentage changes are allowed during an offering period. The current amended ESPP is deemed compensatory and valued under theBlack-Scholes option pricing model at each offering period.

We issued approximately 0.4 million, 0.3 million and 0.6 million shares under our ESPP, representing $2.9 million, $2.0 million and $4.0 million inemployee contributions for the fiscal years ended November 30, 2007, 2006 and 2005, respectively. Shares are reserved under the 1996 Stock Plan for futurepurchases under the ESPP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Stock Options Activities

The summary of stock option activity in fiscal years 2007, 2006 and 2005 is presented below (in thousands, except per share data):

Stock Options

Number ofShares

UnderlyingOptions

Weighted-AverageExercise

Price

Weighted-Average

RemainingContractualTerm (year)

AggregateIntrinsic

ValueOutstanding at November 30, 2004 44,194 6.96

Granted 7,310 7.18 Exercised (2,524) 5.44 Forfeited or expired (2,714) 8.03

Outstanding at November 30, 2005 46,266 7.01 Granted 3,512 7.65 Exercised (9,115) 2.23 Forfeited or expired (2,202) 8.91

Outstanding at November 30, 2006 38,461 8.09 Granted 5,200 7.90 Exercised (3,994) 5.70 Forfeited or expired (2,029) 8.92

Outstanding at November 30, 2007 37,638 $ 8.27 5.32 $ 34,162

Vested and expected to vest at November 30, 2007 35,113 $ 8.31 5.23 $ 32,680

Exercisable at November 30, 2007 28,427 $ 8.46 4.89 $ 28,179

The intrinsic value of exercised stock options is calculated based on the difference between the exercise price and the quoted market price of our commonstock as of the close of the exercise date. The total intrinsic value of stock options exercised in fiscal years 2007, 2006 and 2005 was $13.3 million, $52.5 millionand $11.5 million, respectively. Upon the exercise of stock options, we issue common stock from our authorized shares. As of November 30, 2007, totalunamortized stock-based compensation cost related to unvested stock options was $20.2 million, with the weighted-average remaining recognition period of 2.32years. Total fair value of stock options vested and expensed in fiscal year 2007 and 2006 was $13.6 million and $13.5 million, respectively, net of taxes.

The total realized tax benefit attributable to stock options exercised during the period in jurisdictions where this expense is deductible for tax purposeswere $19.5 million, $24.7 million and $15.9 million in fiscal years 2007, 2006 and 2005, respectively. The gross excess tax benefits from stock-basedcompensation were $18.0 million and 21.5 million in the fiscal years November 30, 2007 and 2006, respectively, as reported on the Consolidated Statements ofCash Flows in financing activities. The excess tax benefits represent the reduction in income taxes otherwise payable during the period which are attributable tothe actual gross tax benefits in excess of the expected tax benefits for stock options exercised in current and prior periods.

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All vested stock options are exercisable. The following table summarizes information about stock options outstanding and exercisable as of November 30,2007 (in thousands, except number of years and per share data):

Options Outstanding Options Exercisable

Range of Exercise Prices

Number ofShares

UnderlyingOptions

Weighted-AverageRemaining

Contractual Life(Years)

Weighted-Average

Exercise Priceper Share

Number ofShares

UnderlyingOptions

Weighted-Average

Exercise Priceper Share

$ 0.33 to $ 4.58 3,876 4.18 $ 3.15 3,314 $ 3.14$ 4.60 to $ 6.29 3,981 5.46 $ 5.97 3,902 $ 5.97$ 6.40 to $ 6.63 4,090 7.37 $ 6.62 2,468 $ 6.62$ 6.68 to $ 7.30 6,133 6.25 $ 7.26 4,075 $ 7.26$ 7.33 to $ 8.00 5,653 4.56 $ 7.91 4,887 $ 7.95$ 8.05 to $10.53 5,686 6.22 $ 8.88 1,665 $ 8.78$10.71 to $11.97 5,814 4.00 $ 11.75 5,760 $ 11.75$12.00 to $71.81 2,405 3.91 $ 16.74 2,356 $ 16.83

37,638 5.32 $ 8.27 28,427 $ 8.46

Stock Awards Activities

Our nonvested stock awards are comprised of restricted stock and restricted stock units. A summary of the status for nonvested stock awards as ofNovember 30, 2007, and activities during fiscal years 2007 and 2006, is presented as follows (in thousands, except per share data):

Nonvested Stock Awards Restricted

Stock

RestrictedStockUnits

Total ofShares Number

UnderlyingAwards

Weighted-Average

Grant-DateFair Value

Nonvested at November 30, 2005 — — — — Granted 1,195 322 1,517 $ 7.34Vested — — — — Forfeited (18) (3) (21) $ 7.33

Nonvested at November 30, 2006 1,177 319 1,496 $ 7.34Granted 1,321 396 1,717 $ 8.89Vested (271) (74) (345) $ 7.34Forfeited (185) (63) (248) $ 7.94

Nonvested at November 30, 2007 2,042 578 2,620 $ 8.28

We granted nonvested stock awards at no cost to recipients during fiscal years 2007 and 2006. As of November 30, 2007, there was $15.9 million of totalunrecognized compensation cost related to nonvested stock awards. That cost is expected to be recognized on a declining basis as the shares vest over four years(the weighted-average recognition period of 3.18 years). The total fair value of shares vested pursuant to stock awards during fiscal year 2007 was 2.5 million.

Stock-Based Compensation

Stock-based compensation expense in fiscal year 2007 was $17.6 million, which consisted primarily of stock-based compensation expense related toemployee stock options recognized under SFAS No. 123(R). The tax effect on employee stock-based compensation in fiscal years 2007 and 2006 were $4.0million and $2.3 million, respectively. We did not capitalize any stock-based compensation in any of the fiscal periods reported.

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We started granting restricted stock and restricted stock units to employees in fiscal year 2006. Approximately $4.3 million and $0.7 million of employeestock-based compensation was recognized related to stock awards in fiscal years 2007 and 2006, respectively.

Our ESPP, as modified in fiscal year 2005, was deemed to be non-compensatory, and therefore, no stock-based compensation expense was recognizedrelated to our ESPP in fiscal year 2006. We revised our ESPP effective from the purchase period beginning February 1, 2007. The revised ESPP is compensatory,and we recognized $0.9 million ESPP related stock-based compensation expense in fiscal year 2007.

Prior to the adoption of SFAS No. 123(R), we presented unearned stock-based compensation as a separate component of stockholders’ equity. Inaccordance with the provisions of SFAS No. 123(R), on December 1, 2005, we reclassified the remaining unamortized balance in deferred stock-basedcompensation to additional paid-in capital on the Consolidated Balance Sheets.

Assumptions for Estimating Fair Value of Stock-Based Awards

Upon adoption of SFAS No. 123(R), we selected the Black-Scholes option pricing model as the most appropriate model for determining the estimated fairvalue for stock-based awards including stock options and ESPP. The use of the Black-Scholes model requires the use of extensive actual employee exercisebehavior data and the use of a number of complex assumptions including expected volatility, risk-free interest rate and expected dividends. For pro formadisclosure purposes under the SFAS No. 123 and SFAS No. 148, we also used the Black-Scholes model for determining the fair value. The following tablesummarizes the assumptions used to value options granted in the respective periods:

Year Ended November 30, 2007 2006 2005Stock Option grants:

Expected term of stock options (years) 4.4 - 4.6 4.3 - 4.6 3.0Risk-free interest rate 3.8 - 4.7% 4.5 - 5.0% 3.5 - 4.4%Volatility 39% 40 - 43% 52 - 64%Weighted-average grant-date fair value (per share) $ 3.92 $ 3.14 $ 3.06

Beginning December 1, 2005, we estimated the volatility of our stock using historical volatility, as well as the implied volatility in market-traded optionson our common stock in accordance with guidance in SFAS No. 123(R) and SAB No. 107. We determined that a blend of implied volatility and historicalvolatility is more reflective of market conditions and a better indicator of expected volatility than using purely historical volatility. We will continue to monitorthese and other relevant factors used to measure expected volatility for future stock option grants. Prior to the adoption of SFAS No. 123(R), we had used ourhistorical stock price volatility in accordance with SFAS No. 123 for purposes of pro forma information disclosed in our Notes to Consolidated FinancialStatements for prior periods.

The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. Wederived the expected term assumption based on our historical settlement experience, while giving consideration to stock options that have life cycles less than thecontractual terms and vesting schedules in accordance with guidance in SFAS No. 123(R) and SAB No. 107. Prior to the adoption of SFAS No. 123(R), we usedour historical settlement experience to derive the expected term for the purposes of pro forma information under SFAS No. 123, as disclosed in our Notes toConsolidated Financial Statements for the related periods.

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The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options. The dividendyield assumption is based on our history and expectation of dividend payouts. We have never declared or paid any cash dividends on our common stock, and wedo not anticipate paying any cash dividends in the foreseeable future.

As stock-based compensation expense recognized in our Consolidated Statement of Operations for fiscal years 2007 and 2006, is based on awardsultimately expected to vest, the amount has been reduced for estimated forfeitures. SFAS No. 123(R) requires forfeitures to be estimated at the time of grant andrevised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on our historical experience.

In accordance with SFAS No. 123(R), the fair value of restricted stock and restricted stock units is the grant date closing price of our common stock. Weexpense the cost of the restricted stock and restricted stock units ratably over the period during which the restrictions lapse, and adjust for estimated forfeitures.

The weighted-average grant-date fair value of stock purchase rights granted under our ESPP granted during fiscal year 2007 was $2.20 per right; we usedthe following assumptions in the Black-Scholes model: 0.5 year expected term, 5.0 to 5.2% risk-free interest rate and 32 to 34% volatility. The stocks purchaserights granted under the ESPP between February 1, 2005 and January 31, 2007, are deemed non-compensatory under the provisions of APB No. 25, SFASNo. 123 and SFAS No. 123(R). Accordingly, we did not estimate the fair value of our ESPP awards using any valuation model or assumptions, as there was nostock-based compensation expense recorded for our ESPP in fiscal years 2006 and 2005.

Accuracy of Fair Value Estimates

Our determination of fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price, as well asassumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatilityover the term of the awards, and actual and projected employee stock option exercise behaviors. In the future, as empirical evidence regarding these inputestimates is available to provide more directionally predictive results, we may change or refine our approach of deriving these input estimates. These changescould impact our fair value of stock options granted in the future. Changes in the fair value of the stock options could materially impact our operating results andfinancial position.

15. Comprehensive Income (Loss)

Our comprehensive income (loss) includes net income and other comprehensive income (loss), which consists of unrealized gains and losses onavailable-for-sale securities and cumulative translation adjustments.

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Total comprehensive income (loss) in fiscal years 2007, 2006 and 2005 are presented in the Consolidated Statements of Stockholders’ Equity andComprehensive Income. Total Accumulated Other Comprehensive Income (Loss) is displayed as a separate component of Stockholder’s Equity in theaccompanying Consolidated Balance Sheets. The balances of each component of Accumulated Other Comprehensive Income (Loss), net of taxes, consist of thefollowing (in thousands):

November 30, 2007 2006 2005 Cumulative translation adjustment, net of tax $ 32,636 $ 11,122 $ (12,329)Unrealized gain (loss) on available-for-sale securities 357 (313) (2,017)

Total accumulated other comprehensive income (loss) $ 32,993 $ 10,809 $ (14,346)

As of November 30, 2007, 2006 and 2005, cumulative translation adjustment included total accumulated tax effects of $(8.9) million, $(5.0) million and$0.8 million, respectively.

16. Minority Interest

In the first quarter of fiscal year 2007, we established a joint venture in South Africa, TS Innovations Limited (“Innovations”), with a local South Africacorporation, to assist with our sales efforts as well as to provide consulting services and training to our customers in the Sub-Saharan Africa region. For the yearended November 30, 2007, Innovations had total assets of $2.4 million and total revenues of $3.5 million. As of November 30, 2007, we owned a 74.9% interestin the joint venture. Because of this majority interest, our Consolidated Financial Statements include the balance sheets, results of operations and cash flows ofInnovations, net of intercompany charges. We therefore eliminated 25.1% of financial results that pertain to the minority interest; the eliminated amount wasreported as a separate line on our Consolidated Statements of Operations and Balance Sheets.

17. Income Taxes

Income before provision for income taxes consisted of the following (in thousands):

Year Ended November 30, 2007 2006 2005United States $ 52,928 $ 73,210 $ 61,690International 24,471 17,348 5,391

$ 77,399 $ 90,558 $ 67,081

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Significant components of the provision for (benefit from) income taxes are as follows (in thousands):

Year Ended November 30, 2007 2006 2005 Federal:

Current $ 18,971 $ 22,904 $ 10,370 Deferred (1,887) (3,133) (17,552)

17,084 19,771 (7,182)

State: Current 1,756 2,874 2,575 Deferred (34) (12,627) (2,086)

1,722 (9,753) 489

Foreign: Current 10,751 11,465 3,474 Deferred (4,156) (3,789) (2,255)

6,595 7,676 1,219

Provision for (benefit from) income taxes $ 25,401 $ 17,694 $ (5,474)

We paid income taxes of $12.1 million, $15.1 million and $7.9 million in fiscal years 2007, 2006 and 2005, respectively.

The provision for income taxes was at rates other than the U.S. Federal statutory tax rate for the following reasons:

Year Ended November 30, 2007 2006 2005 U.S. Federal statutory rate 35.0% 35.0% 35.0%State taxes 1.6 2.3 0.5 Research and development credits (2.7) (0.4) (0.8)Goodwill and intangibles 0.3 (0.4) (0.6)Stock option compensation 2.9 3.7 0.1 Foreign income taxed at different rate (3.7) 0.9 1.0 Change in valuation allowance (2.1) (17.3) (43.3)Meals and entertainment 0.7 0.5 0.6 Extraterritorial income exclusion (0.1) (4.5) (1.3)Other 0.9 (0.3) 0.6

Provision for (benefit from) income taxes 32.8% 19.5% (8.2)%

U.S. income taxes and foreign withholding taxes have not been provided for on a cumulative total of $34.0 million of undistributed earnings for certainnon-U.S. subsidiaries. With the exception of our subsidiaries in the United Kingdom, net undistributed earnings of our foreign subsidiaries are generallyconsidered to be indefinitely reinvested, and accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of these earnings inthe form of dividends or otherwise, we will be subject to U.S. income taxes net of available foreign tax credits associated with these earnings.

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While we have not experienced and do not expect any impact to the effective tax rate for U.S. non-qualified stock option or restricted stock expense due tothe adoption of SFAS No. 123(R), the effective tax rate has been and may be negatively impacted by foreign stock option expense that may not be deductible inthe foreign jurisdictions. Also, SFAS No. 123(R) requires that the tax benefit of stock option deductions relating to incentive stock options be recorded in theperiod of disqualifying disposition. This could result in significant fluctuations in our effective tax rate between accounting periods.

The components of deferred tax assets (liabilities) are as follows (in thousands):

November 30, 2007 2006 Deferred tax assets:

Net operating loss carryforwards $ 18,720 $ 5,179 Reserves and accruals 21,212 18,875 Credit carryforwards 12,623 14,392 Depreciation and amortization 13,771 11,933 Unrealized losses on investments 5,774 5,759 Other 5,880 2,609

77,980 58,747 Deferred tax liabilities:

Intangible assets (29,584) (13,016)Pre-acquisition receivable—Spotfire (12,582) — Deferred revenue (4,804) — Translation gains/losses (9,938) (6,396)Other (622) (145)

(57,530) (19,557)

Net deferred tax assets before valuation allowance 20,450 39,190 Valuation allowance (9,051) (10,622)

Net deferred tax assets $ 11,399 $ 28,568

As of November 30, 2007, we believed that the amount of the deferred tax assets recorded on our balance sheet would ultimately be recovered. However,should there be a change in our ability to recover our deferred tax assets, our tax provision would increase in the period in which we determine that it is morelikely than not that we cannot recover our deferred tax assets. If we have to re-establish a full valuation allowance against our deferred tax assets it would resultin an increase of $30.3 million to income tax expense.

We have elected to track the portion of our federal and state net operating loss and tax credit carryforwards attributable to stock option benefits, in aseparate memo account pursuant to SFAS No. 123(R). Therefore, these amounts are no longer included in our gross or net deferred tax assets. Pursuant to SFASNo. 123(R), footnote 82, the benefit of these net operating loss and tax credit carryforwards will only be recorded to equity when they reduce cash taxes payable.As a result, we recorded a net change of $10.5 million in fiscal year 2007 in the memo account resulting from the utilization of net operating loss related to stockoption benefits. In fiscal year 2006, $185.2 million of the net change in valuation allowance of $208.7 million related to amounts accounted for in the memoaccount, $7.7 million related to deferred tax assets in acquired entities, the benefit of which was recorded to goodwill and the remaining $15.8 million resulted inan income tax benefit. Of the $15.8 million income tax benefit recognized in fiscal year 2006, $10.8 million was recorded in the second quarter and $4.8 million,including an adjustment of $2.2 million, in the fourth quarter.

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Our income taxes payable for federal purposes have been reduced by the tax benefits associated with the exercise of employee stock options during thefiscal year and utilization of net operating loss carryover applicable to both stock options and acquired entities. The benefits applicable to stock options werecredited directly to stockholders’ equity when realized and amounted to $19.5 million and $24.7 million for fiscal years 2007 and 2006, respectively.

As of November 30, 2007, our federal and state net operating loss carryforwards for income tax purposes were $397.2 million and $114.4 million,respectively, which expire through 2023. As of November 30, 2007, our federal and state tax credit carryforwards for income tax purposes were $41.4 millionand $24.4 million, respectively. The federal tax credit carryforwards expire through 2027 and the state tax credit can be carried forward indefinitely.

As of November 30, 2007, our federal and state net operating loss carryforwards being accounted for in the memo account were $313.8 million and $97.5million, respectively. As of November 30, 2007, our federal and state tax credit carryforwards being accounted for in the memo account were $38.1 million and$14.7 million, respectively.

In the event of a change in ownership, as defined under federal and state tax laws, our net operating loss and tax credit carryforwards may be subject toannual limitations. The annual limitations may result in the expiration of the net operating loss and tax credit carryforwards before utilization.

18. Net Income Per Share

Basic net income per share is computed by dividing the net income available to common stockholders for the period by the weighted average number ofshares of common stock outstanding during the period less shares of common stock subject to repurchase and nonvested stock awards. Diluted net income pershare is computed by dividing the net income for the period by the weighted average number of shares of common stock and potential shares of common stockoutstanding during the period if their effect is dilutive. Certain potential dilutive securities were not included in computing net income per share because theireffect was anti-dilutive.

We use the treasury stock method to calculate the weighted-average shares used in the diluted earnings per share in accordance with SFAS No. 128,Earnings Per Share. Under the treasury stock method, the assumed proceeds calculation includes: (a) the actual proceeds to-be-received from the employee uponexercise, (b) the average unrecognized compensation cost during the period and (c) any tax benefits that will be credited upon exercise to additional paid incapital. We determine whether our windfall pool of available excess tax benefits is sufficient to absorb the shortfall. Currently, we have determined that we havesufficient windfall pool available.

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

Year Ended November 30, 2007 2006 2005Net income $ 51,888 $ 72,864 $ 72,555

Weighted-average shares of common stock used to compute basic net income per share 198,885 209,538 213,263Effect of dilutive common stock equivalents:

Stock options to purchase common stock 6,114 8,472 10,714Restricted common stock awards 317 65 —

Weighted-average shares of common stock used to compute diluted net income per share 205,316 218,075 223,977

Basic net income per share $ 0.26 $ 0.35 $ 0.34

Diluted net income per share $ 0.25 $ 0.33 $ 0.32

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

Year Ended November 30, 2007 2006 2005Stock options to purchase common stock 16,124 19,798 17,099Restricted common stock awards 109 1 —

Total anti-dilutive common stock equivalents 16,233 19,799 17,099

19. Related Party Transactions

Atos Origin

Bernard J. Bourigeaud, a director of TIBCO, served as Chairman of the Management Board and CEO of Atos Origin, a leading international IT servicesprovider, until December 2007, one of our customers in fiscal year 2007. Total revenue generated by the Company from Atos Origin for products and servicesdelivered in the fiscal year ended November 30, 2007, was $1.0 million. TIBCO believes that the products and services provided to Atos Origin were on termsthat were determined at arms length, and such terms were similar to terms offered to other customers.

Reuters

We have commercial arrangements with affiliates of Reuters, one of our former stockholders. During fiscal year 2005, Reuters reduced its holdings of ourcommon stock such that as of November 30, 2005, Reuters owned less than 1% of our outstanding shares of common stock. Beginning fourth quarter of fiscalyear 2005, Reuters was no longer considered a related party. Transactions with Reuters subsequent to November 30, 2005, are presented along with othernon-related party transactions and are no longer separately disclosed as related party transactions.

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Revenue from Reuters consists primarily of product license and maintenance fees on its sales of our products under the terms of our license, maintenanceand distribution agreement with Reuters (the “Reuters Agreement”). License revenue from Reuters in fiscal year 2005 was primarily related to a $9.9 millionupfront, minimum, non-refundable license fee received pursuant to the terms of an amendment to the Reuters Agreement we entered into in February 2005.Revenue from Reuters, while it was considered a related party in fiscal year 2005, is summarized as follows (in thousands):

Year EndedNovember 30,

2005License fees $ 16,038Service and maintenance revenue:

Maintenance 6,827Services contracts 146

6,973

Total revenue from Reuters $ 23,011

20. Employee 401(k) Plan

Our employee savings and retirement plan is qualified under Section 401 of the United State Internal Revenue Code of 1986, as amended. Employees mayelect to reduce their current compensation by up to the statutory prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plan.We provide 100% match to employee contributions up to 4% of an employee’s base pay and an additional 25% on employee contributions of the next 2% of basepay. Our matching contributions to the 401(k) Plan totaled $4.8 million, $4.3 million and $4.1 million in fiscal years 2007, 2006 and 2005, respectively.

21. Segment Information

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

Our revenue by geographic region, based on the location at which each sale originated, is summarized as follows (in thousands):

Year Ended November 30, 2007 2006 2005Americas:

United States $ 267,415 $ 254,948 $ 226,024Other Americas 10,963 8,986 5,923

Total Americas 278,378 263,934 231,947

EMEA: United Kingdom 81,084 71,500 68,029Other EMEA 152,375 120,865 98,921

Total EMEA 233,459 192,365 166,950

Asia Pacific and Japan 65,549 60,980 47,013

$ 577,386 $ 517,279 $ 445,910

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

November 30, 2007 2006Property and equipment, net:

United States $ 102,044 $ 105,591United Kingdom 3,435 4,028Other 5,911 4,168

$ 111,390 $ 113,787

22. Selected Quarterly Financial Information (Unaudited)

(in thousands, except per share data)

Three Months Ended

November 30,

2007 August 31,

2007 May 31,

2007 February 28,

2007Total revenue $ 186,101 $ 135,114 $ 130,517 $ 125,654Gross profit 139,988 93,711 94,031 90,755Restructuring adjustment — (1,095) — — Acquired in-process research and development — 1,600 — — Total operating expenses 102,502 90,825 83,015 79,186Income from operations 37,486 2,886 11,016 11,569Provision for income taxes 12,186 731 6,561 5,923Net income 27,645 4,634 9,218 10,391Net income per share:

Basic $ 0.15 $ 0.02 $ 0.05 $ 0.05Diluted $ 0.14 $ 0.02 $ 0.04 $ 0.05

Shares used in computing net income per share: Basic 188,748 193,817 204,575 208,398Diluted 192,940 200,128 211,885 216,306

Three Months Ended

November 30,

2006 August 31,

2006 May 31,

2006 February 28,

2006Total revenue $ 161,049 $ 120,403 $ 121,247 $ 114,580Gross profit 125,651 86,933 89,109 81,905Restructuring adjustment (1,042) — — — Total operating expenses 89,401 74,350 74,116 73,375Income from operations 36,250 12,583 14,993 8,530Provision for (benefit from) income taxes 9,093 6,987 (5,094) 6,708Net income 31,541 11,250 24,472 5,601Net income per share:

Basic $ 0.15 $ 0.05 $ 0.12 $ 0.03Diluted $ 0.14 $ 0.05 $ 0.11 $ 0.03

Shares used in computing net income per share: Basic 210,181 207,616 209,777 210,577Diluted 217,849 214,498 219,782 220,170

Our operating results reflect seasonal trends experienced by us and many software companies and are subject to fluctuations due to other factors. Ourbusiness, financial condition and results of operations may be affected by such factors in the future. Therefore, we believe that period-to-period comparisons ofour consolidated financial results should not be relied upon as an indication of future performance.

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Table of ContentsSIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on this 25th day of January 2008.

TIBCO Software Inc.

By: /s/ MURRAY D. RODE

Murray D. Rode

Chief Financial Officer and

Executive Vice President, Strategic Operations

II-1


Table of ContentsPOWER OF ATTORNEY

KNOW ALL THESE, PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Vivek Y. Ranadivéand Murray D. Rode, and each of them, his attorneys-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and allamendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securitiesand Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done byvirtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following personson behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ VIVEK Y. RANADIVÉVivek Y. Ranadivé

Chairman and Chief Executive Officer (PrincipalExecutive Officer)

January 23, 2008

/s/ MURRAY D. RODEMurray D. Rode

Chief Financial Officer and Executive Vice President,Strategic Operations (Principal Financial Officer)

January 25, 2008

/s/ SYDNEY L. CAREYSydney L. Carey

Senior Vice President, Finance and CorporateController (Principal Accounting Officer)

January 25, 2008

/s/ BERNARD BOURIGEAUDBernard Bourigeaud

Director

January 25, 2008

/s/ ERIC DUNNEric Dunn

Director

January 23, 2008

/s/ NAREN GUPTANaren Gupta

Director

January 25, 2008

/s/ PETER JOBPeter Job

Director

January 23, 2008

/s/ PHILIP K. WOODPhilip K. Wood

Director

January 24, 2008

II-2


Table of ContentsEXHIBIT INDEX

ExhibitNo. Exhibits

3.1(1) Amended and Restated Certificate of Incorporation of Registrant. 3.2(2) Bylaws of Registrant, as amended and restated.10.1 Form of Registrant’s Indemnification Agreement.10.2(3)# 1996 Stock Option Plan, as amended and restated.10.3(4)# Employment Agreement between Vivek Y. Ranadivé and Registrant dated November 30, 2004.10.4(5)# 1998 Director Option Plan, as amended and restated.10.5(6) Lease Agreement dated January 21, 2000 between Spieker Properties, L.P. and the Registrant.10.6(7)# Extensibility, Inc. 2000 Stock Plan.10.7(8)# Talarian Corporation 2000 Equity Incentive Plan.10.8(8)# Talarian Corporation 1998 Equity Incentive Plan.10.9(8)# White Barn, Inc. Stock Option Plan.10.10(8)# White Barn, Inc. 2000 Equity Incentive Plan.10.11(9)

Agreement to Lease and Sell Assets, dated as of June 2, 2003, by and between the Board of Trustees of the Leland Stanford JuniorUniversity and 3301 Hillview Holdings, Inc.

10.12(9)

Ground Lease, dated as of June 25, 2003, by and between the Board of Trustees of the Leland Stanford Junior University and 3301Hillview Holdings, Inc.

10.13(9) Promissory Note issued on June 25, 2003 to SunAmerica Life Insurance Company by 3301 Hillview Holdings, Inc.10.14(10)

First Amendment, dated May 31, 2007, to Promissory Note issued on June 25, 2003 to SunAmerica Life Insurance Company by 3301Hillview Holdings, Inc.

10.15(10)# Transition Agreement and Release, dated March 29, 2007, between Christopher Larsen and the Registrant.10.16(11)# Summary of Spotfire Division Executive Incentive Compensation Plan.10.17(12)# Summary of Fiscal Year 2007 TIBCO Executive Incentive Plan.10.18# Change in Control and Severance Plan.10.19# Form of Restricted Stock Agreement.10.20# Form of Stock Option Agreement.21 List of subsidiaries.23 Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.24 Power of Attorney (included on signature page).31.1 Certification by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.31.2 Certification by Chief Financial Officer Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.32.1 Certification by Chief Executive Officer pursuant to 18 USC § 1350.32.2 Certification by Chief Financial Officer pursuant to 18 USC § 1350.

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

(2) Incorporated by reference to an exhibit filed with the Registrant’s Current Report on Form 8-K, filed with the SEC on April 11, 2006.

(3) Incorporated by reference to an exhibit filed with the Registrant’s Annual Report on Form 10-K, filed with the SEC on February 9, 2007.

(4) Incorporated by reference to an exhibit filed with the Registrant’s Annual Report on Form 10-K, filed with the SEC on February 14, 2005.

(5) Incorporated by reference to an exhibit filed with the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on April 14, 2006.

(6) Incorporated by reference to an exhibit filed with the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on April 17, 2000.

(7) Incorporated by reference to an exhibit filed with the Registrant’s Registration Statement on Form S-8 (File No. 333-48260), filed with the SEC onOctober 19, 2000.


Table of Contents

(8) Incorporated by reference to exhibits filed with the Registrant’s Registration Statement on Form S-8 (File No. 333-88730), filed with the SEC on May 21,2002.

(9) Incorporated by reference to exhibits filed with the Registrant’s Annual Report on Form 10-K, filed with the SEC on January 20, 2004.(10) Incorporated by reference to exhibits filed with the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on July 13, 2007.(11) Incorporated by reference to an exhibit filed with the Registrant’s Current Report on Form 8-K, filed with the SEC on August 16, 2007.(12) Incorporated by reference to an exhibit filed with the Registrant’s Current Report on Form 8-K, filed with the SEC on May 16, 2007. # Indicates management contract or compensatory plan or arrangement.


Exhibit 10.1

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is entered into as of the day of , by and between TIBCO Software Inc., aDelaware corporation (the “Company”), and NAME (“Indemnitee”).

RECITALS

A. The Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for the Company’s directors and officers, thesignificant increases in cost of such insurance and the general reductions in the coverage of such insurance.

B. The Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors and officers to expensivelitigation risks at the same time as the availability and coverage of liability insurance has been severely limited.

C. The Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company and, in part, in order toinduce Indemnitee to continue to provide services to the Company, wishes to provide for the indemnification and advancing of expenses to Indemnitee to themaximum extent permitted by law.

D. In view of the considerations set forth above, the Company desires that Indemnitee be indemnified by the Company as set forth herein.

NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

1. Indemnification.

(a) Indemnification of Expenses. The Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was or is or becomesa party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any threatened, pending or completedaction, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes mightlead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigativeor other (hereinafter a “Claim”) by reason of (or arising in part out of) any event or occurrence related to the fact that Indemnitee is or was a director orofficer of the Company, or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent orfiduciary of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee whileserving in such capacity (hereinafter an “Indemnifiable Event”) against any and all expenses (including attorneys’ fees and all other costs, expenses andobligations incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be awitness in or participate in, any such action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), losses, claims,damages, liabilities, judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company,


which approval shall not be unreasonably withheld) of such Claim and any federal, state, local or foreign taxes imposed on Indemnitee as a result of theactual or deemed receipt of any payments under this Agreement, including all interest, assessments and other charges paid or payable in connection with orin respect of such Expenses (collectively, hereinafter “Expenses”) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to bein or not opposed to the best interests of the Company, and, with respect to any criminal action, suit or proceeding, Indemnitee had no reasonable cause tobelieve Indemnitee’s conduct was unlawful.

(b) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 8 hereof, to the extent thatIndemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of a Claim without prejudice, in defense of anyClaim referred to in Section (1)(a) hereof or in the defense of any Claim, issue or matter therein, Indemnitee shall be indemnified against all Expensesincurred by Indemnitee in connection therewith.

2. Expenses; Indemnification Procedure.

(a) Advancement of Expenses. The Company shall pay all Expenses incurred by Indemnitee in connection with the investigation, defense, settlementor appeal of any civil or criminal Claim referenced in Section 1(a) hereof in advance of the final disposition of such Claim. Indemnitee hereby undertakesto repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by theCompany as authorized hereby. The advances to be made hereunder shall be paid by the Company to Indemnitee following a request therefor, but in anyevent no later than sixty days after receipt by the Company of written demand from Indemnitee for such advances.

(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitee’s right to be indemnified under this Agreement, givethe Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification or advancement will or could besought under this Agreement. Notice to the Company shall be directed to the Chief Executive Officer of the Company at the address shown on thesignature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give theCompany such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.

(c) Procedure. Any indemnification and advances provided for in Section 1 and Section 2 of this Agreement shall be paid by the Company toIndemnitee as soon as practicable after receipt of written request from Indemnitee for such indemnification or advances, but in any event no later than sixtydays after receipt of such request. If the Company believes that Indemnitee has not met the standards of conduct which make it permissible underapplicable law for the Company to indemnify Indemnitee for the amount(s) claimed, the Company may file an action in the Court of Chancery of the Stateof Delaware to obtain a declaratory judgment that Indemnitee is not entitled under applicable law to receive indemnification or advancement from theCompany (hereinafter a “Declaratory Action”). If the Company files a Declaratory Action, Indemnitee shall be entitled to receive interim payments ofExpenses pursuant to Subsection 2(a) including Expenses incurred in

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defending a Declaratory Action unless and until the Court of Chancery of the State of Delaware issues an order or judgment that Indemnitee is not entitledunder applicable law to receive indemnification or advancement from the Company. If the Court of Chancery of the State of Delaware issues an order orjudgment in a Declaratory Action that Indemnitee is not entitled under applicable law to receive indemnification or advancement from the Company, theCompany shall have no further obligation under this Agreement, the Company’s Certificate of Incorporation, the Company Bylaws or any other applicablelaw, statute or rule to provide indemnification or advances of Expenses to Indemnitee.

(d) No Presumptions. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without courtapproval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particularstandard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neitherthe failure of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or itsstockholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicablestandard of conduct required by applicable law, nor an actual determination by the Company (including it Board of Directors, any committee or subgroupof the Board of Directors, independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall create apresumption that Indemnitee has or has not met the applicable standard of conduct.

(e) Burden of Proof. In a Declaratory Action, the burden of proof shall be on the Company to establish that Indemnitee is not entitled toindemnification or advances.

(f) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has liabilityinsurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordancewith the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, onbehalf of Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies.

(g) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the Expenses of any Claim, the Company shall be entitled toassume the defense of such Claim with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery toIndemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of suchcounsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemniteewith respect to the same Claim. Notwithstanding the Company’s assumption of the defense of any Claim, the Company shall be obligated to pay theExpenses of any Claim if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) the Company shall havereasonably concluded that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense such that Indemniteeneeds to be separately represented, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses ofIndemnitee counsel shall be at the expense of the Company. The Company shall have the right to conduct such defense as it sees fit in its sole discretion,including the right to settle any Claim against Indemnitee without the consent of the Indemnitee.

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3. Additional Indemnification Rights; Nonexclusivity.

(a) Scope. The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification isnot specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or by statute. Inthe event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation toindemnify a member of its Board of Directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy bythis Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of aDelaware corporation to indemnify a member of its Board of Directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwiserequired by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunderexcept as set forth in Section 8(a) hereof.

(b) Nonexclusivity. The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under theCompany’s Certificate of Incorporation, its Bylaws, any agreement, any vote of stockholders or disinterested directors, the General Corporation Law of theState of Delaware, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action Indemnitee took or didnot take while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.

4. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made againstIndemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Certificate of Incorporation, Bylaw or otherwise) ofthe amounts otherwise indemnifiable hereunder.

5. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expensesincurred in connection with any Claim, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion ofsuch Expenses to which Indemnitee is entitled.

6. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that in certain instances, Federal law or applicable public policy mayprohibit the Company from indemnifying its directors, officers, employees, agents or fiduciaries under this Agreement or otherwise. Indemnitee understands andacknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit thequestion of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

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7. Directors’ and Officers’ Liability Insurance. The Company shall, from time to time, make the good faith determination whether or not it is practicablefor the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the directors and officers with coveragefor losses from wrongful acts, or to ensure the Company’s performance of its indemnification obligations under this Agreement. Among other considerations, theCompany will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. In all policies of directors’ and officers’liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the mostfavorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is anofficer. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith thatsuch insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverageprovided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by aparent or subsidiary of the Company.

8. Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

(a) Excluded Action or Omissions. No indemnification shall be made with respect to (i) any Claim by or in the right of the Company as to whichIndemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware or such othercourt in which such Claim was brought, shall determine upon application that despite the adjudication of liability, in view of all the circumstances of thecase, Indemnitee is fairly and reasonably entitled to indemnity for such Expenses such court shall deem proper, or (ii) any other acts, omissions ortransactions from which Indemnitee may not be relieved of liability under Applicable law;

(b) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to Claims initiated or brought voluntarily byIndemnitee and not by way of defense, except (i) with respect to Claims brought to establish or enforce a right to indemnification or advancement underthis Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or Bylaws, as now or hereafter in effectrelating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) asotherwise required under Section 145 of the Delaware General Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitledto such indemnification, advance expense payment or insurance recovery, as the case may be;

(c) Claims Under Section 16(b). To indemnify Indemnitee for Expenses and the payment of profits arising from the purchase and sale by Indemniteeof securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

(d) Disgorgement of Profits and Bonuses Pursuant to Section 304. To indemnify Indemnitee for (i) any bonus or other incentive-based orequity-based compensation received by Indemnitee or (ii) any profits arising from the sale of securities made by Indemnitee that Indemnitee is requiredpursuant to Section 304 of the Sabarnes-Oxley Act of 2002 to reimburse to the Company.

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9. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee,Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of five (5) years from the date of accrual of such cause ofaction, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action withinsuch five-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shallgovern.

10. Construction of Certain Phrases.

(a) For purposes of this Agreement, references to the “Company” shall include, in addition to the resulting corporation, any constituent corporation(including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had powerand authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent orfiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent orfiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same positionunder the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituentcorporation if its separate existence had continued.

(b) For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include anyexcise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include anyservice as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer,employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in amanner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemedto have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

12. Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto andtheir respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of thebusiness and/or assets of the Company, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whetherdirect or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, bywritten agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to thesame extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect with respect toClaims relating to Indemnifiable Events regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary of the Companyor of any other enterprise at the Company’s request.

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13. Notice. All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any eventbe deemed to be given (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postageprepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or similar overnight courier, freightprepaid, or (d) one day after the business day of delivery by facsimile transmission, if delivered by facsimile transmission, with copy by first class mail, postageprepaid, and shall be addressed if to Indemnitee, at the Indemnitee address as set forth beneath Indemnitee signatures to this Agreement and if to the Company atthe address of its principal corporate offices (attention: Secretary) or at such other address as such party may designate by ten days’ advance written notice to theother party hereto.

14. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for allpurposes in connection with any action which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall becommenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive andonly proper forum for adjudicating such a claim.

15. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a singlesection, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shallremain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, withoutlimitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void orunenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

16. Choice of Law. This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware,as applied to contracts between Delaware residents, entered into and to be performed entirely within the State of Delaware, without regard to the conflict of lawsprinciples thereof.

17. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights ofrecovery of Indemnitee who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Companyeffectively to bring suit to enforce such rights.

18. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writingsigned by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisionshereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

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19. Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges allprevious written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.

20. No Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained inthe employ of the Company or any of its subsidiaries.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

TIBCO SOFTWARE INC.

By:

Title:

3303 Hillview AvenuePalo Alto, CA 94306

AGREED TO AND ACCEPTED BY:

Signature:

Printed Name:

Address:

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Exhibit 10.18

TIBCO Software Inc. Change in Control and Severance Plan

Amended and Restated October 3, 2007

1. Introduction. The purpose of this TIBCO Software Inc. Change in Control and Severance Plan (the “Plan”) is to provide assurances of specifiedseverance benefits to eligible employees of the Company whose employment is subject to being involuntarily terminated (other than for Cause, death orpermanent disability) or terminated for Good Reason under the circumstances described in the Plan, including but not limited to following a Change in Control ofthe Company. The Company recognizes that the potential of a Change in Control can be a distraction to employees and can cause such employees to consideralternative employment opportunities. The Plan is intended to (i) assure that the Company will have continued dedication and objectivity of its employees,notwithstanding the possibility, threat or occurrence of a Change in Control and (ii) provide the Company’s employees with an incentive to continue theiremployment and to motivate its employees to maximize the value of the Company prior to and following a Change in Control for the benefit of its stockholders.This Plan is an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended. Thisdocument constitutes both the written instrument under which the Plan is maintained and the required summary plan description for the Plan.

2. Important Terms. To help you understand how this Plan works, it is important to know the following terms:

2.1 “Administrator” means the Company, acting through its EVP, General Counsel & Secretary or any person to whom the Administrator hasdelegated any authority or responsibility pursuant to Section 7, but only to the extent of such delegation.

2.2 “Base Pay” means a Covered Employee’s regular straight-time salary as in effect during the last regularly scheduled payroll period immediatelypreceding the date on which the Severance Benefit becomes payable. Base Pay does not include payments for overtime, shift premium, incentivecompensation, incentive payments, bonuses, commissions or other compensation.

2.3 “Board” means the Board of Directors of the Company.

2.4 “Cause” means (i) an act of fraud or personal dishonesty undertaken by a Covered Employee in connection with the Covered Employee’sresponsibilities as an employee that is intended to result in substantial gain or personal enrichment of the Covered Employee at the expense of theCompany, (ii) a Covered Employee’s conviction of, or plea of nolo contendere to, a felony, (iii) a Covered Employee’s gross misconduct in connectionwith the performance or failure of performance of a material component of the Covered Employee’s responsibilities as an employee that is materiallyinjurious to the Company, or (iv) a Covered Employee’s continued substantial violations of his or her employment duties after the Covered Employee hasreceived a written demand for performance from the Company which specifically sets forth the factual basis for the Company’s belief that the CoveredEmployee has not substantially performed such duties.

2.5 “Change in Control” means (a) a sale of all or substantially all of the Company’s assets, (b) any merger, consolidation, or other businesscombination transaction of the Company with or into another corporation, entity, or person, other than a transaction in which the holders

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of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either bysuch shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total votingpower represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction, (c) thedirect or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or aright to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company,(d) a contested election of Directors, as a result of which or in connection with which the persons who were Directors before such election or theirnominees cease to constitute a majority of the Board, or (e) a dissolution or liquidation of the Company.

2.6 “Change in Control Determination Period” means the time period beginning on the date of the Change in Control and ending twelve monthsfollowing the Change in Control.

2.7 “Change in Control Severance Benefit” means the compensation and other benefits the Covered Employee will be provided pursuant toSection 4.

2.8 “Company” means TIBCO Software Inc., a Delaware corporation, and any successor by merger, acquisition, consolidation or otherwise thatassumes the obligations of the Company under the Plan.

2.9 “Covered Employee” means an employee of the Company who has been designated by the Administrator to participate in the Plan. Each suchdesignated employee is shown on Appendix A and/or Appendix B attached hereto as a “Covered Employee.”

2.10 “Effective Date” means July 10, 2005.

2.11 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

2.12 “Good Reason” means without the Covered Employee’s written consent, after (a) a material reduction in the Covered Employee’s authority,status or responsibilities (including reporting responsibilities) relative to the Covered Employee’s authority, status or responsibilities in effect immediatelyprior to such reduction where such reduction was imposed without Cause; (b) a reduction in the Covered Employee’s annualized Base Pay, without theCovered Employee’s written consent (unless the Company also reduces the Base Pay of substantially all other employees of the Company); (c) a reductionin the kind or level of benefits (not including Base Pay, target bonus or equity compensation) for which the Covered Employee is eligible (unless theCompany also reduces the kind or level of benefits available to substantially all other employees of the Company); or (d) the relocation of the CoveredEmployee’s principal place of performing his or her duties as an employee of the Company by more than thirty (30) miles. Notwithstanding the foregoing,an event described in this Section 2.11 shall not constitute Good Reason unless it is communicated by the Covered Employee to the Company in writingand is not corrected by the Company in a manner which is reasonably satisfactory to such Covered Employee (including full retroactive correction withrespect to any monetary matter) within 10 days of the Company’s receipt of such written notice.

2.13 “Involuntary Termination” means a termination of employment of a Covered Employee under the circumstances described in Sections 4.1and 5.1.

2.14 “Plan” means the TIBCO Software, Inc. Change in Control and Severance Plan, as set forth in this document, and as hereafter amended fromtime to time.

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2.15 “Severance Benefit” means the compensation and other benefits the Covered Employee will be provided pursuant to Section 5.

2.16 “Target Bonus” means, with respect to a Covered Employee, the Covered Employee’s target bonus pursuant to the Company’s ExecutiveIncentive Compensation Plan or any other applicable corporate bonus plan (a) at the rate in effect as of the date of the Covered Employee’s termination, orat a rate of 100% if no such rate is in effect as of the date of the Covered Employee’s termination, or, if higher, at the rate in effect as of any date within thetwelve-month period preceding the date of the Covered Employee’s termination and (b) assuming one hundred percent (100%) achievement of theCovered Employee’s and the Company’s objectives, if any. Notwithstanding the foregoing, the Covered Employee’s target bonus for purposes of the Planshall be deemed to be the amount received as a bonus by the Covered Employee for the Company’s fiscal year preceding the date of the CoveredEmployee’s termination if a target bonus has not been established for the then current fiscal year and the Covered Employee’s bonuses, if any, arediscretionary and not pursuant to any non-discretionary bonus plan or commission rate established by the Company. The Covered Employee’s TargetBonus shall not include amounts attributable to any other bonus, including, but not limited to, any other discretionary bonuses such as spot bonuses.

2.17 “Tier 1 Covered Employee” means (a) with respect to the Change in Control Severance Benefits provided pursuant to Section 4, anyemployee of the Company designated as an employee under Tier 1 as shown on Appendix A attached hereto and (b) with respect to the Severance Benefitsprovided pursuant to Section 5, any employee of the Company who, immediately prior to the Change of Control, has the employee title designated underTier 1 as shown on Appendix B attached hereto.



2.20 “Tier 4 Covered Employee” means any employee of the Company designated as an employee under Tier 4 as shown on Appendix A attachedhereto.

3. Eligibility for Change in Control Severance Benefits and Severance Benefits. An individual is eligible for the Change in Control Severance Benefitor the Severance Benefit under the Plan, in the amount set forth in Section 4 or Section 5, respectively, only if he or she is a Covered Employee on the date he orshe experiences an Involuntary Termination.

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4. Change in Control Severance Benefit.

4.1 Involuntary Termination Following a Change in Control. If at any time within the Change in Control Determination Period (i) a CoveredEmployee terminates his or her employment with the Company (or any parent or subsidiary of the Company) for Good Reason, or (ii) the Company (orany parent or subsidiary of the Company) terminates such Covered Employee’s employment for other than Cause, death or permanent disability, then,subject to the Covered Employee’s compliance with Section 7, the Covered Employee shall receive the following Change in Control Severance Benefitfrom the Company:

4.1.1 Change in Control Severance Benefit.

4.1.1.1 Tier 1 Covered Employee. If the Covered Employee is a Tier 1 Covered Employee, he or she shall be entitled to receive alump sum cash payment equal to twelve (12) months of Base Pay and the Covered Employee’s Target Bonus.

4.1.1.2 Tier 2 Covered Employee. If the Covered Employee is a Tier 2 Covered Employee, he or she shall be entitled to receive alump sum cash payment equal to nine (9) months of Base Pay and nine (9) months of the Covered Employee’s Target Bonus.

4.1.1.3 Tier 3 Covered Employee. If the Covered Employee is a Tier 3 Covered Employee, he or she shall be entitled to receive alump sum cash payment equal to six (6) months of Base Pay and six (6) months of the Covered Employee’s Target Bonus.

4.1.1.4 Tier 4 Covered Employee. If the Covered Employee is a Tier 4 Covered Employee, he or she shall be entitled to receive alump sum cash payment equal to three (3) months of Base Pay and three (3) months of the Covered Employee’s Target Bonus.

4.1.2 Continued Medical Benefits. If the Covered Employee, and any spouse and/or dependents of the Covered Employee (“FamilyMembers”) has medical and dental coverage on the date of Covered Employee’s termination of employment under a group health plan sponsored bythe Company, the Company will reimburse Covered Employee for the total applicable premium cost for medical and dental coverage under theConsolidated Omnibus Budget Reconciliation Act of 1986, 29 U.S.C. Sections 1161-1168; 26 U.S.C. Section 4980B(f), as amended, and allapplicable regulations (referred to collectively as “COBRA”) for Covered Employee and his Family Members as follows:

4.1.2.1 Tier 1 Covered Employee. For a period of up to twelve (12) months.

4.1.2.2 Tier 2 Covered Employee. For a period of up to nine (9) months.

4.1.2.3 Tier 3 Covered Employee. For a period of up to six (6) months.

4.1.2.4 Tier 4 Covered Employee. For a period of up to three (3) months.

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Notwithstanding the forgoing, the Company shall have no obligation to reimburse the Covered Employee for the premium cost of COBRAcoverage beginning on or after the date the Covered Employee and his Family Members first become eligible to obtain comparable benefits from asubsequent employer.

4.1.3 Equity Award Accelerated Vesting.

4.1.3.1 Tier 1 Covered Employee. Fifty (50) percent of each Tier 1 Covered Employee’s outstanding and unvested equitycompensation awards, as determined on such Covered Employee’s date of termination, shall automatically accelerate, all restrictions orrepurchase rights applicable thereto shall immediately lapse, and any performance goals or other vesting criteria applicable thereto shall bedeemed achieved at target levels so as to become fully vested and exercisable. The period over which such equity compensation awards maybe exercised shall be governed by the applicable provisions of the Company’s Stock-Plans and related award agreements.

4.1.3.2 Tier 2 and Tier 3 Covered Employees. Twenty-five (25) percent of each Tier 2 Covered Employee’s and each Tier 3Covered Employee’s outstanding and unvested equity compensation awards, as determined on such Covered Employee’s date oftermination, shall automatically accelerate, all restrictions or repurchase rights applicable thereto shall immediately lapse, and anyperformance goals or other vesting criteria applicable thereto shall be deemed achieved at target levels so as to become fully vested andexercisable. The period over which such equity compensation awards may be exercised shall be governed by the applicable provisions of theCompany’s Stock Plans and related award agreements.

4.1.3.3 Tier 4 Covered Employee. The acceleration of vesting upon a Change in Control of each Tier 4 Covered Employee’soutstanding and unvested equity compensation awards, as determined on such Covered Employee’s date of termination, and the period overwhich such equity compensation awards may be exercised shall be governed by the applicable provisions of the Company’s Stock Plans andrelated award agreements.

5. Severance Benefit.

5.1 Involuntary Termination Other Than During the Change in Control Determination Period. If at any time after the Change in ControlDetermination Period (i) a Covered Employee terminates his or her employment with the Company (or any parent or subsidiary of the Company) for GoodReason, or (ii) the Company (or any parent or subsidiary of the Company) terminates such Covered Employee’s employment for other than Cause, deathor permanent disability, then, subject to the Covered Employee’s compliance with Section 7, the Covered Employee shall receive the following SeveranceBenefit from the Company:

5.1.1 Severance Benefit.

5.1.1.1 Tier 1 Covered Employee. If the Covered Employee is a Tier 1 Covered Employee, he or she shall be entitled to receive alump sum cash payment equal to twelve (12) months of Base Pay and twelve (12) months of the Covered Employee’s Target Bonus.

5.1.1.2 Tier 2 Covered Employee. If the Covered Employee is a Tier 2 Covered Employee, he or she shall be entitled to receive alump sum cash payment equal to nine (9) months of Base Pay and nine (9) months of the Covered Employee’s Target Bonus.

5.1.1.3 Tier 3 Covered Employee. If the Covered Employee is a Tier 3 Covered Employee, he or she shall be entitled to receive alump sum cash payment equal to six (6) months of Base Pay and six (6) months of the Covered Employee’s Target Bonus.

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5.1.2 Continued Medical Benefits. If the Covered Employee, and any spouse and/or dependents of the Covered Employee (“FamilyMembers”) has medical and dental coverage on the date of Covered Employee’s termination of employment under a group health plan sponsored bythe Company, the Company will reimburse Covered Employee for the total applicable premium cost for medical and dental coverage under theConsolidated Omnibus Budget Reconciliation Act of 1986, 29 U.S.C. Sections 1161-1168; 26 U.S.C. Section 4980B(f), as amended, and allapplicable regulations (referred to collectively as “COBRA”) for Covered Employee and his Family Members as follows:

5.1.2.1 Tier 1 Covered Employee. For a period of up to twelve (12) months.

5.1.2.2 Tier 2 Covered Employee. For a period of up to nine (9) months.

5.1.2.3 Tier 3 Covered Employee. For a period of up to six (6) months.

6. Parachute Payments. In the event that the severance and other benefits provided for in this Plan or otherwise payable or provided to the CoveredEmployee (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) butfor this Section 6, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Employee’s severance benefits hereundershall be either

(a) delivered in full, or

(b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receiptby the Covered Employee on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severancebenefits may be taxable under Section 4999 of the Code. Unless the Company and the Covered Employee otherwise agree in writing, any determinationrequired under this Section 6 shall be made in writing in good faith by the accounting firm serving as the Company’s independent public accountantsimmediately prior to the Change in Control (the “Accountants”). In the event of a reduction in benefits hereunder, the Covered Employee shall be giventhe choice of which benefits to reduce. For purposes of making the calculations required by this Section 6, the Accountants may make reasonableassumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections280G and 4999 of the Code. The Company and the Covered Employee shall furnish to the Accountants such information and documents as theAccountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants mayreasonably incur in connection with any calculations contemplated by this Section 6.

7. Release and Non-Disparagement Agreement. As a condition to receiving Change in Control Severance Benefits or Severance Benefits under thisPlan, each Covered Employee will be required to sign a waiver and release of all claims arising out of his or her Involuntary Termination and employment withthe Company and its subsidiaries and affiliates and an agreement not to disparage the Company, its directors, or its executive officers, in a form reasonablysatisfactory to the General Counsel of the Company.

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8. Termination of Benefits. Benefits under this Plan shall terminate immediately for a Covered Employee if such Covered Employee, at any time, violatesany proprietary information or confidentiality obligation to the Company or the terms of any applicable non-competition agreement with the Company.

9. Non-Duplication of Benefits. Notwithstanding any other provision in the Plan to the contrary, the Change in Control Severance Benefits, SeveranceBenefits and other benefits provided hereunder shall be in lieu of any other severance and/or retention plan benefits and the Change in Control SeveranceBenefits, Severance Benefits and other benefits provided hereunder shall be reduced by any severance paid or provided to a Covered Employee under any otherplan or arrangement.

10. Section 409A.

10.1 Change in Control Severance Benefits and Severance Benefits shall be paid as soon as administratively practicable following the date of theCovered Employee’s termination, subject to the Covered Employee’s compliance with Section 7. Notwithstanding the foregoing, if the Covered Employeeis a “specified employee” within the meaning of Section 409A of the Code and the final regulations and any guidance promulgated thereunder (“Section409A”) at the time of the Covered Employee’s termination (other than due to death), then the Change in Control Severance Benefits or Severance Benefitsotherwise due to the Covered Employee under this Plan, if any, and any other severance payments or separation benefits that may be considered deferredcompensation under Section 409A (together, the “Deferred Compensation Separation Benefits”) otherwise due to the Covered Employee on or within thesix (6) month period following the Covered Employee’s termination will accrue during such six (6) month period and will become payable in a lump sumpayment on the date six (6) months and one (1) day following the date of the Covered Employee’s termination of employment. All subsequent payments,if any, will be payable-in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, ifthe Covered Employee dies following his termination but prior to the six (6) month anniversary of his date of termination, then any payments delayed inaccordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of the Covered Employee’s death andall other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

10.2 It is the intent of this Plan to comply with the requirements of Section 409A so that none of the severance payments and benefits to be providedhereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Notwithstandinganything to the contrary in the Plan, including but not limited to Section 15, the Company reserves the right to amend the Plan as it deems necessary oradvisable, in its sole discretion and without the consent of the Covered Employees, to comply with Section 409A of the Code or to otherwise avoid incomerecognition under Section 409A of the Code prior to the actual payment of Change in Control Severance Benefits or Severance Benefits or imposition ofany additional tax (provided that no such amendment shall materially reduce the benefits provided hereunder).

11. Vacation Days. Any unused vacation pay accrued as of a Covered Employee’s date of Involuntary Termination will be paid at the time the CoveredEmployee receives his or her first Change in Control Severance Benefit or Severance Benefit or, to the extent the six month delay in Section 10.1 is applicable tothe Covered Employee, at the time the Covered Employee would have received his or her first Change in Control Severance Benefit or Severance Benefit in theabsence of such delay. No Covered Employee may use any accrued but unused vacation pay to extend his or her Involuntary Termination date or to postpone ordelay the start of his or her Severance Period.

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12. Withholding. The Company will withhold from any Change in Control Severance Benefits or Severance Benefits all federal, state, local and othertaxes required to be withheld therefrom and any other required payroll deductions.

13. Administration. The Company is the administrator of the Plan (within the meaning of section 3(16)(A) of ERISA). The Plan will be administered andinterpreted by the Administrator (in his or her sole discretion). The Administrator is the “named fiduciary” of the Plan for purposes of ERISA and will be subjectto the fiduciary standards of ERISA when acting in such capacity. Any decision made or other action taken by the Administrator with respect to the Plan, and anyinterpretation by the Administrator of any term or condition of the Plan, or any related document, will be conclusive and binding on all persons and be given themaximum possible deference allowed by law. The Administrator has the authority to act for the Company (in a non-fiduciary capacity) as to any matterpertaining to the Plan; provided, however, that this authority does not apply with respect to (a) the Company’s power to amend or terminate the Plan or (b) anyaction that could reasonably be expected to increase significantly the cost of the Plan is subject to the prior approval of the Executive Vice President StrategicOperations of the Company. The Administrator may delegate in writing to any other person all or any portion of his or her authority or responsibility with respectto the Plan.

14. Eligibility to Participate. The Administrator will not be excluded from participating in the Plan if otherwise eligible, but he or she is not entitled to actor pass upon any matters pertaining specifically to his or her own benefit or eligibility under the Plan. The Executive Vice President, Strategic Operations ofTIBCO Software Inc. will act upon any matters pertaining specifically to the benefit or eligibility of the Administrator under the Plan.

15. Amendment or Termination.

15.1 The Company reserves the right to amend, modify or terminate the Plan at any time, without advance notice to any Covered Employee;provided, however, that, prior to a Change in Control, the Company shall provide nine (9) months advance notice to each Covered Employee of anyamendment or modification to the Plan with respect to Change in Control Severance Benefits that would be adverse to such Covered Employee withrespect to eligibility or the amount of Change in Control Severance Benefits payable hereunder. Notwithstanding the preceding, commencing on the dateof a Change in Control, no amendment or termination of the Plan shall reduce the Change in Control Severance Benefit payable to any Covered Employeewho terminates employment during the Change in Control Determination Period (unless the affected Covered Employee consents to such amendment ortermination). Any action of the Company in amending or terminating the Plan will be taken in a non-fiduciary capacity.

15.2 The Company reserves the right to amend, modify or terminate the Plan at any time, provided that the Company shall provide six (6) monthsadvance notice to each Covered Employee of any amendment or modification to the Plan that would be adverse to such Covered Employee with respect toeligibility or the amount of Severance Benefits payable hereunder. Notwithstanding the foregoing, no such notice may be given (i) prior to December 31,2006, (ii) after a Change in Control, or (iii) following or in connection with the approval by the Board of a Change in Control (unless such Change inControl is not reasonably anticipated to occur). Notwithstanding the foregoing, no amendment or termination of the Plan shall reduce the SeveranceBenefit payable to any Covered Employee who has terminated employment prior to the amendment or termination (unless the affected Covered Employeeconsents to such amendment or termination). Any action of the Company in amending or terminating the Plan will be taken in a non-fiduciary capacity.

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16. Claims Procedure. Any employee or other person who believes he or she is entitled to any payment under the Plan may submit a claim in writing tothe Administrator. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial andreferring to the provisions of the Plan on which the denial is based. The notice will also describe any additional information needed to support the claim and thePlan’s procedures for appealing the denial. The denial notice will be provided within 90 days after the claim is received. If special circumstances require anextension of time (up to 90 days), written notice of the extension will be given within the initial 90-day period. This notice of extension will indicate the specialcircumstances requiring the extension of time and the date by which the Administrator expects to render its decision on the claim.

17. Appeal Procedure. If the claimant’s claim is denied, the claimant (or his or her authorized representative) may apply in writing to the Administratorfor a review of the decision denying the claim. Review must be requested within 60 days following the date the claimant received the written notice of their claimdenial or else the claimant loses the right to review. The claimant (or representative) then has the right to review and obtain copies of all documents and otherinformation relevant to the claim, upon request and at no charge, and to submit issues and comments in writing. The Administrator will provide written notice ofhis or her decision on review within 60 days after it receives a review request. If additional time (up to 60 days) is needed to review the request, the claimant (orrepresentative) will be given written notice of the reason for the delay. This notice of extension will indicate the special circumstances requiring the extension oftime and the date by which the Administrator expects to render its decision. If the claim is denied (in full or in part), the claimant will be provided a writtennotice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice shall also include astatement that the claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents and other information relevant tothe claim and a statement regarding the claimant’s right to bring an action under Section 502(a) of ERISA.

18. Source of Payments. All Change in Control Severance Benefits and Severance Benefits will be paid in cash from the general funds of the Company;no separate fund will be established under the Plan; and the Plan will have no assets. No right of any person to receive any payment under the Plan will be anygreater than the right of any other general unsecured creditor of the Company.

19. Inalienability. In no event may any current or former employee of the Company or any of its subsidiaries or affiliates sell, transfer, anticipate, assignor otherwise dispose of any right or interest under the Plan. At no time will any such right or interest be subject to the claims of creditors nor liable to attachment,execution or other legal process.

20. No Enlargement of Employment Rights. Neither the establishment or maintenance of the Plan, any amendment of the Plan, nor the making of anybenefit payment hereunder, will be construed to confer upon any individual any right to be continued as an employee of the Company. The Company expresslyreserves the right to discharge any of its employees at any time, with or without cause.

21. Applicable Law. The provisions of the Plan will be construed, administered and enforced in accordance with ERISA and, to the extent applicable, thelaws of the State of California.

22. Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of thePlan, and the Plan will be construed and enforced as if such provision had not been included.

23. Headings. Headings in this Plan document are for purposes of reference only and will not limit or otherwise affect the meaning hereof.

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24. Indemnification. The Company hereby agrees to indemnify and hold harmless the officers and employees of the Company, and the members of itsboards of directors, from all losses, claims, costs or other liabilities arising from their acts or omissions in connection with the administration, amendment ortermination of the Plan, to the maximum extent permitted by applicable law. This indemnity will cover all such liabilities, including judgments, settlements andcosts of defense. The Company will provide this indemnity from its own funds to the extent that insurance does not cover such liabilities. This indemnity is inaddition to and not in lieu of any other indemnity provided to such person by the Company.

25. Additional Information.

Plan Name: TIBCO Software Inc. Change in Control and Severance Plan

Plan Sponsor:

TIBCO Software, Inc.3303 Hillview AvePalo Alto, CA 94304

Identification Numbers: EIN: - 77-0449727 PLAN: 5___

Plan Year: Company’s Fiscal Year

Plan Administrator: TIBCO Software Inc. Attention: Executive Vice President, General Counsel & Secretary 3303 Hillview Ave Palo Alto, CA 94304

(650) 846-1000

Agent for Service of Legal Process: TIBCO Software Inc.

Attention: General Counsel 3303 Hillview Ave Palo Alto, CA 94304

(650) 846-1000

Service of process may also be made upon the Plan Administrator.

Type of Plan Severance Plan/Employee Welfare Benefit Plan

Plan Costs The cost of the Plan is paid by the Employer.

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20. Statement of ERISA Rights.

As a Covered Employee under the Plan, you have certain rights and protections under ERISA:

(a) You may examine (without charge) all Plan documents, including any amendments and copies of all documents filed with the U.S. Departmentof Labor, such as the Plan’s annual report (IRS Form 5500). These documents are available for your review in the Company’s Human ResourcesDepartment.

(b) You may obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. A reasonable chargemay be made for such copies.

In addition to creating rights for Covered Employees, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The peoplewho operate the Plan (called “fiduciaries”) have a duty to do so prudently and in the interests of you and the other Covered Employees. No one, including theCompany or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit under the Plan orexercising your rights under ERISA. If your claim for a severance benefit is denied, in whole or in part, you must receive a written explanation of the reason forthe denial. You have the right to have the denial of your claim reviewed. (The claim review procedure is explained in Sections 10 and 11 above.)

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials and do not receive them within 30 days, youmay file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and to pay you up to $110 a day until youreceive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim which is denied orignored, in whole or in part, you may file suit in a state or federal court. If it should happen that you are discriminated against for asserting your rights, you mayseek assistance from the U.S. Department of Labor, or you may file suit in a federal court.

In any case, the court will decide who will pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay thesecosts and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds that your claim is frivolous.

If you have any questions regarding the Plan, please contact the Plan Administrator. If you have any questions about this statement or about your rightsunder ERISA, you may contact the nearest area office of the Employee Benefits Security Administration (formerly the Pension and Welfare BenefitsAdministration), U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits SecurityAdministration, U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210. You may also obtain certain publications about your rightsand responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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21. Execution.

In Witness Whereof, the Company, by its duly authorized officer, has executed this amended Plan on the date indicated below.

TIBCO Software Inc.

By

Title

Date

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Exhibit 10.19

TIBCO SOFTWARE INC.

NOTICE OF AWARD OF RESTRICTED STOCK UNITS

Unless otherwise defined herein, the terms defined in the 1996 Stock Option Plan (the “Plan”) will have the same defined meanings in this Notice ofAward and in the Terms and Conditions of Restricted Stock Units (the “Agreement”), attached hereto as Appendix A.

Name: [insert name] (the “Employee”)

You have been granted the right to receive restricted stock units (“Restricted Stock Units”), subject to the terms and conditions of the Plan, the Agreementand this Notice of Award as follows:

Award Number Date of Award Vesting Commencement Date Total Number of Restricted Stock Units

Vesting Schedule:

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

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

EMPLOYEE:

Signature

Print Name

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APPENDIX A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

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

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

3. Vesting Schedule. Subject to paragraphs 4 and 5, the Restricted Stock Units awarded by this Agreement and the attached Notice of Award will vest inthe Employee according to the vesting schedule set forth on the attached Notice of Award, subject to the Employee continuing to be a Service Provider througheach such vesting date.

4. Administrator Discretion. The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of theRestricted Stock Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be considered as having vested as of thedate specified by the Administrator. If the Administrator, in its discretion, accelerates the vesting of the balance, or some lesser portion of the balance, of theRestricted Stock Units, the payment of such accelerated amount nevertheless shall be made at the same time or times as if such Restricted Stock Units had vestedin accordance with the vesting schedule set forth on the attached Notice of Award (whether or not the Employee remains employed by the Company or aSubsidiary as of such date(s)).

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

6. Payment after Vesting. Any Restricted Stock Units that vest in accordance with paragraph 3 will be paid to the Employee (or in the event of theEmployee’s death, to his or her estate) in whole Shares as soon as administratively practicable after vesting, subject to paragraph 8 and the other provisions ofthis Agreement. Any Restricted Stock Units that vest in accordance with paragraph 4 will be paid to the Employee at the time(s) provided in paragraph 4, subjectto paragraph 8 and the other provisions of this Agreement. Notwithstanding the foregoing, to the extent required by Section 409A of the Code (“Section 409A”),any Restricted Stock Units that vest in accordance with the Change of Control Vesting Schedule will be paid to the Employee at the same time or times as if suchRestricted Stock Units had vested in accordance with the Original Vesting Schedule.

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

8. Withholding of Taxes. Regardless of any action the Company or the Employee’s employer (the “Employer”) takes with respect to any or all income tax(including foreign, federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax Related Items”), theEmployee acknowledges that the ultimate liability for all Tax Related Items legally due by the Employee is and remains the Employee’s responsibility and thatthe Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect ofthe Restricted Stock Units, including the award of Restricted Stock Units, the vesting of Restricted Stock Units, the issuance of Shares in settlement of RestrictedStock Units, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends; and (ii) do not commit to structure the terms of the award orany aspect of the Restricted Stock Units to reduce or eliminate the Employee’s liability for Tax Related Items.

Prior to the issuance of Shares upon vesting of Restricted Stock Units, the Employee shall pay, or make adequate arrangements satisfactory to theCompany or to the Employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In thisregard, the Employee authorizes the Company or the Employer to withhold all applicable Tax Related Items legally payable by the Employee from theEmployee’s wages or other cash compensation payable to the Employee by the Company or the Employer. Alternatively, or in addition, if permissible underlocal law, the Company or the Employer may, in their sole discretion, (i) sell or arrange for the sale of Shares to be issued on the vesting of Restricted StockUnits to satisfy the withholding or payment on account obligation, and/or (ii) withhold in Shares, provided that the Company and the Employer shall withholdonly the amount of Shares necessary to satisfy the minimum withholding amount. The Employee shall pay to the Company or to the Employer any amount ofTax Related Items that the Company or the Employer may be required to withhold as a result of the Employee’s receipt of Restricted Stock Units, the vesting ofRestricted Stock Units, or the issuance of Shares in settlement of vested Restricted Stock Units that cannot be satisfied by the means previously described. TheCompany may refuse to deliver Shares to the Employee if the Employee fails to comply with the Employee’s obligation in connection with the Tax Related Itemsas described herein.

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

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

11. Acknowledgment of Nature of Award. In accepting the award of Restricted Stock Units, the Employee acknowledges that:

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

(b) the award of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards ofRestricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been awarded repeatedly in the past;

(c) all decisions with respect to future awards, if any, will be at the sole discretion of the Company;

(d) the Employee’s participation in the Plan is voluntary;

(e) Restricted Stock Units are an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to theCompany or to the Employer, and Restricted Stock Units are outside the scope of the Employee’s employment contract, if any;

(f) Restricted Stock Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation ofany severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similarpayments;

(g) neither the award of Restricted Stock Units nor any provision of this Agreement, the attached Notice of Award, the Plan or the policies adoptedpursuant to the Plan confer upon the Employee any right with respect to employment or continuation of current employment, and in the event that theEmployee is not an employee of the Company, Restricted Stock Units shall not be interpreted to form an employment contract or relationship with theCompany;

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

(i) if the Employee receives Shares, the value of such Shares acquired on vesting of Restricted Stock Units may increase or decrease in value;

(j) no claim or entitlement to compensation or damages arises from termination of Restricted Stock Units, and no claim or entitlement tocompensation or damages shall arise from any diminution in value of the Restricted Stock Units or Shares received upon vesting of Restricted Stock Unitsresulting from termination of the Employee’s employment by the Employer (for any reason whatsoever and whether or not in breach of local labor laws)and

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the Employee irrevocably releases the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim isfound by a court of competent jurisdiction to have arisen, then, by signing the attached Notice of Award, the Employee shall be deemed irrevocably tohave waived his or her entitlement to pursue such claim; and

(k) in the event of involuntary termination of the Employee’s employment (whether or not in breach of local labor laws), the Employee’s right toreceive Restricted Stock Units and vest under the Plan, if any, will terminate effective as of the date that the Employee is no longer actively employed andwill not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similarperiod pursuant to local law); furthermore, in the event of involuntary termination of employment (whether or not in breach of local labor laws), theEmployee’s right to receive Shares pursuant to the Restricted Stock Units after termination of employment, if any, will be measured by the date oftermination of the Employee’s active employment and will not be extended by any notice period mandated under local law; the Administrator shall havethe exclusive discretion to determine when the Employee is no longer actively employed for purposes of the award of Restricted Stock Units.

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

13. Award is Not Transferable. Except to the limited extent provided in paragraph 6, Restricted Stock Units and the rights and privileges conferred herebycannot be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution,attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of Restricted Stock Units, or any right or privilegeconferred hereby, or upon any attempted sale under any execution, attachment or similar process, Restricted Stock Units granted herein and the rights andprivileges conferred hereby immediately will become null and void.

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

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

16. Plan Governs. This Agreement and the attached Notice of Award are subject to all terms and provisions of the Plan. In the event of a conflict betweenone or more provisions of

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this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. In the event of a conflict between one or more provisions of theattached Notice of Award and one or more provisions of the Plan, the provisions of the Plan will govern.

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

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

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

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

21. Change of Control. For purposes of this Agreement and the attached Notice of Award, a “Change of Control” means:

(a) Any “person,” as such term is used in Sections 13(d) and 14(d) of the U.S. Securities Exchange Act of 1934, as amended (other than a groupconsisting of the Company stockholders as of the date of the closing and their Parents and Subsidiaries) that becomes the “beneficial owner” (as defined inRule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by theCompany’s then outstanding voting securities; or

(b) The consummation of a merger, consolidation, reorganization or similar transaction in which the stockholders of the Company before suchtransaction (and their Parents and Subsidiaries) own less than 50% of the voting stock or voting power of the surviving entity immediately after suchtransaction; or

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(c) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets.

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

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

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

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

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25. Language: If the Employee has received this Agreement, the attached Notice of Grant or any other document related to the Plan translated into alanguage other than English and if the translated version is different that the English version, the English version will control.

26. Notice of Governing Law. This Agreement and the attached Notice of Grant shall be governed by the laws of the State of California, U.S.A., withoutregard to its principles of conflict of laws. For purposes of litigating any dispute that arises under this award of Restricted Stock Units, this Agreement or theattached Notice of Grant, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted inthe courts of Santa Clara County, California, or the federal courts of the United States for the Northern District of California, and no other courts where thisaward of Restricted Stock Units is made and/or to be performed.

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EXHIBIT ATO TERMS AND CONDITIONS

OF RESTRICTED STOCK UNITS

This Exhibit A, which is part of the Agreement, includes additional terms and conditions of the award of Restricted Stock Units that will apply toEmployees in the countries listed below. Please note that the exchange control information provided below is current as of July 2006, unless otherwisenoted herein. However, exchange controls are subject to change and the Employee should consult his or her personal advisor(s) with respect to theapplicable exchange controls (if any) which may apply to the vesting of the Restricted Stock Units, acquisition and/or sale of the Shares. Capitalized termsused but not defined herein shall have the same meanings assigned to them in the Plan, the Agreement and the Notice of Award.

Australia

The Employee’s Restricted Stock Unit award is granted pursuant to the Australian Addendum which is an addendum to the Plan. The Employee’s award issubject to the terms and conditions as stated in the Australian Addendum, Offer Document, the Plan, the Notice of Award and the Agreement. TheEmployee will receive a copy of each of these documents when an award is made to him or her.

Austria

The Employee acknowledges that he or she may be entitled to revoke the Agreement on the basis of the Austrian Consumer Protection Act according tothe following rules:

(i) If the Employee accepts the award of Restricted Stock Units under the Plan, the Employee may be entitled to revoke his or her acceptance ofthe Agreement. The revocation must be made within one week after the Employee has accepted the Agreement.

(ii) The revocation must be in written form to be valid. It is sufficient if the Employee returns the Agreement to the Company or the Company’s

representative with language that can be understood as his or her refusal to conclude or honor the Agreement. It is sufficient if therevocation is sent within the period discussed above.

Belgium

No special provisions.

Brazil

By accepting this Restricted Stock Unit award, the Employee acknowledges that he or she agrees to comply with applicable Brazilian laws and pay anyand all applicable taxes associated with the vesting of the Restricted Stock Units and the sale of Shares. An Employee resident or domiciled in Brazil willbe required to submit annually a declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assetsand rights is equal to or greater than US$100,000. Assets and rights that must be reported include Shares of Company stock.

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China

The Employee will be required to sell all Shares that he or she is entitled to at vesting and will receive the sale proceeds less brokerage fees andwithholding taxes in cash.

France

The Employee may hold Shares obtained under the Plan outside of France provided that the Employee declares all foreign accounts, whether open, current,or closed, in the Employee’s income tax return.

Germany

The Employee must report any receivables or payables or debts in foreign currency exceeding an amount of €5,000,000 on a monthly basis. In addition,the Employee must report on an annual basis his or her share holdings in the Company in the unlikely event that Employees holds Shares representing 10%or more of the total or voting capital of the Company.

Hong Kong

Due to securities law restrictions in Hong Kong, the Employee undertakes not to sell any Shares acquired under the Plan for at least six months from thedate of award.

In the event the Employee’s award is determined to be governed by the Occupational Retirement Schemes Ordinance, the Employee’s award may becancelled.

India

By accepting the award of Restricted Stock Units, the Employee consents and agrees to satisfy any liability for fringe benefit tax that may be payable bythe Company and/or the Employer in connection with the Restricted Stock Units. Further, by accepting the award of Restricted Stock Units, the Employeeagrees that the Company and/or the Employer may collect the fringe benefit tax from the Employee by any of the means set forth in Section 8 of thisAgreement. The Employee further agrees to execute any other consents or elections required to accomplish the above, promptly upon request of theCompany.

Proceeds from the sale of Shares must be repatriated to India within a reasonable period of time (i.e., two weeks). The Employee should obtain a foreigninward remittance certificate from the bank for his or her records to document compliance with this requirement and submit a copy of the foreign inwardremittance certificate to his or her Employer.

Ireland

Directors and shadow directors of an Irish subsidiary are subject to certain notification requirements under the Companies Act. Directors and shadowdirectors must notify the Irish subsidiary in writing of their interest in the Company and the number and class of Shares or rights to which the interestrelates within five days of the acquisition or disposal of Shares or within five days of becoming aware of the event giving rise to the notification. Thisdisclosure requirement also applies to any rights or Shares acquired by the director’s spouse or children (under the age of 18).

Italy

Exchange control reporting is required if the Employee holds foreign investments outside of Italy (including Shares) in excess of €12,500 or the equivalentamount in U.S. dollars. If reporting is required, it must be done on the Employee’s individual tax return.

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For data privacy purposes, the Controller of personal data processing is TIBCO Software Inc., with registered offices in 3302 Hillview Avenue, PaloAlto, California, 94304, U.S.A., and pursuant to Legislative Decree no. 196/2003, its representative in Italy is TIBCO Software S.r.l. with registeredoffices at Via del Casale Solaro, 110, Rome 00143, Italy.

Japan


Luxembourg


Malaysia

If the Employee is a director of a Malaysian Subsidiary of the Company, the Employee is subject to certain notification requirements under the MalaysianCompanies Act, 1965. Among these requirements is an obligation to notify the Malaysian Subsidiary in writing when the Employee receives an interest(e.g., Restricted Stock Units, Shares, etc.) in the Company or any related entity. In addition, the Employee must notify the Malaysian Subsidiary when theEmployee sells Shares of the Company or any related entity (including when the Employee sells Shares acquired under the Plan). These notifications mustbe made within fourteen days of acquiring or disposing of any interest in the Company or any related entity.

Mexico

In accepting the Restricted Stock Unit award, the Employee acknowledges that he or she understands and agrees that: (i) the award is not related to thesalary and other contractual benefits granted to the Employee by the Employer; (ii) any modification of the Plan or its termination shall not constitute achange or impairment of the terms and conditions of the Employee’s employment; and (iii) any benefit realized under the Plan is a fringe benefit.

Policy Statement. La invitación que la Compañía hace en relación con el Plan es unilateral y discrecional, por lo tanto, la Compañía se reserva elderecho absoluto para modificar o terminar el mismo en cualquier momento, sin ninguna responsabilidad para el Opcionante. Esta invitación y, en elcaso del Opcionante, la adquisición de acciones, de ninguna manera establecen relación laboral alguna entre el Opcionante y la Compañía. Tampocoestablece derecho alguno entre el Opcionante y su empleador.

English Translation. The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absoluteright to amend it and discontinue it at any time without any liability to the Employee. This invitation and, in Employee’s case, the acquisition of Sharesdoes not, in any way, establish a labor relationship between the Employee and the Company and it does not establish any rights between the Employee andthe Employer.

Netherlands


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Norway


Portugal

If the Employee acquires Shares upon vesting and does not hold the Shares with a Portuguese financial intermediary, the Employee must file a report withthe Portuguese Central Bank for statistical purposes. If the Shares are held by a Portuguese financial intermediary, it will file the report for the Employee.

By accepting this award, the Employee acknowledges that he or she understands and agrees that: (i) the grant of the award under the Plan will not createany obligation on the Company to grant Restricted Stock Units in the future; and (ii) the Employee recognizes the absolute right of the Company to amendor cancel the Plan at any time without incurring any liability to the Employee.

Russia

When Employee acquires Shares upon vesting, the Shares will be held for Employee in a U.S. brokerage account. Employee will not be permitted torequest share certificates and hold the certificates in Russia. Employee may sell his or her Shares on a U.S. stock market; Employee is not permitted to sellshares in the Company directly to other Russian individuals.

This Agreement, the Plan and all other materials Employee may receive regarding his or her participation in the Plan do not constitute advertising oran offering of securities in Russia. The issuance of securities pursuant to the Plan has not and will not be registered in Russia and hence the securitiesdescribed in any Plan-related documents may not be used for offering or public circulation in Russia.

All proceeds from the sale of Shares must be repatriated to Russia through an authorized bank in Russia. After repatriation, Employee may transferthe funds to an “offshore” (foreign) bank account outside of Russia, but must give notice to the Russian tax authorities about the opening/closing of eachforeign account within one month after the account is opened/closed and report to the Russian tax authorities records of the flow of funds in the foreignaccounts as well as records of the account balances.

Singapore

The grant of the award of Restricted Stock Units under the Plan is being made on a private basis and is, therefore, exempt from registration in Singapore.

If the Employee is a director, associate director or shadow director of a Singapore affiliate of the Company, the Employee is subject to certain notificationrequirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Singaporean affiliate in writing when theEmployee receives an interest (e.g., Restricted Stock Units, Shares) in the Company or any related companies. Please contact the Company to obtain acopy of the notification form. In addition, the Employee must notify the Singapore affiliate when the Employee sells Shares of the Company or any relatedcompany (including when the Employee sells Shares acquired pursuant to this award). These notifications must be made within two days of acquiring ordisposing of any interest in the

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Company or any related company. In addition, a notification must be made of the Employee’s interests in the Company or any related company within twodays of becoming a director.

South Africa


South Korea

The following information is current as of May 2007.

If the Employee realizes US$500,000 or more from the sale of Shares issued pursuant to the Restricted Stock Unit award, the Employee is required torepatriate the sale proceeds back to Korea within eighteen months of the sale.

Spain

In accepting the Restricted Stock Unit award, the Employee acknowledges that he or she consents to participation in the Plan and has received a copy ofthe Plan. The Employee understands that the Company has unilaterally, gratuitously and discretionally decided to grant Restricted Stock Units under thePlan to individuals who may be employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered intoupon the express assumption and condition that any award will not economically or otherwise bind the Company or any of its Subsidiaries on an ongoingbasis. Consequently, the Employee understands that the award is granted on the assumption and condition that the award or the Shares acquired pursuant tothe award shall not become a part of any employment contract (either with the Company or any of its Subsidiaries) and shall not be considered amandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, the Employee understands thatthis award would not be made to the Employee but for the assumptions and conditions referred to above; thus, the Employee acknowledges and freelyaccepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any award of Restricted StockUnits shall be null and void.

To participate in the Plan, the Employee must comply with exchange control regulations in Spain. The acquisition of Shares under the Plan must bedeclared for statistical purposes to the Spanish Dirección General de Política Comercial e Inversiones Exteriores (the “DGPCIE”), the Bureau forCommercial Policy and Foreign Investments, which is a department of the Ministry of the Economy. The Employee must make the declaration himself orherself by filing a form with the DGPCIE. When receiving foreign currency payments derived from the ownership of Shares (i.e., dividends or saleproceeds), the Employee must inform the financial institution receiving the payment of the basis upon which such payment is made. The Employee willneed to provide the institution with the following information: (i) the Employee’s name, address, and fiscal identification number; (ii) the name andcorporate domicile of the Company; (iii) the amount of the payment; (iv) the currency used; (v) the country of origin; (vi) the reasons for the payment; and(vii) further information that may be required. If the Employee acquires Shares under the Plan and wishes to import the ownership title of such Shares (i.e.,share certificates) into Spain, the Employee must declare the importation of such securities to the DGPCIE.

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Sweden


Switzerland

The offer is considered a private offering in Switzerland and is therefore not subject to registration in Switzerland.

Taiwan


United Arab Emirates


* * * * *

15


Exhibit 10.20

TIBCO SOFTWARE INC.

STOCK OPTION AGREEMENT

A. Grant of Option.

Unless otherwise defined herein, the terms defined in the TIBCO Software Inc. 1996 Stock Option Plan (the “Plan”) and the Notice of Grant shall have thesame defined meanings in this Stock Option Agreement (the “Stock Option Agreement”). The Plan Administrator of TIBCO Software Inc., a Delawarecorporation (the “Company”), has granted to the Optionee named in the Notice of Grant an option (“Option”) to purchase a total number of shares of theCompany’s Common Stock (“Shares”) set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”)subject to the terms, definitions and conditions of the Plan, which is incorporated herein by reference, and this Stock Option Agreement. Subject to Section 16(c)of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Notice of Grant and this Stock OptionAgreement, the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as a U.S. Incentive Stock Option (“ISO”), the Option is intended to qualify as an ISO under Section 422 of the U.S.Internal Revenue Code. However, if the Option is intended to be an ISO, to the extent that it exceeds the $100,000 rule of Section 422(d) of the U.S. InternalRevenue Code it shall be treated as a U.S. Non-Qualified Stock Option (“NQSO”).

B. Exercise and Vesting Schedule.

Subject to accelerated vesting as set forth below, the Option may be exercised, in whole or in part, in accordance with the vesting schedule set forth in theOptionee’s Notice of Grant (the “Vesting Schedule”). In addition, if the Optionee has been issued ISOs and NQSOs on the same grant date, then the VestingSchedule covers the aggregate number of shares granted under all types of Options, ISOs and NQSOs combined, issued on the same grant date.

In the event of a “Change of Control” of the Company, the Vesting Schedule shall be replaced in its entirety by the following vesting schedule, to beapplied both retroactively and prospectively:

1/36th of the Shares subject to the Option shall vest each month after the vesting commencement date, as set forth in the Notice of Grant, on thesame day of the month as the vesting commencement date, so that 100% of the Shares subject to the Option shall be vested three (3) years from thevesting commencement date, subject to your remaining in continuous status as an Employee or Consultant as of such vesting dates.

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For this purpose, a “Change of Control” of the Company is defined as:

(a) Any “person,” as such term is used in Sections 13(d) and 14(d) of the U.S. Securities Exchange Act of 1934, as amended (other than a groupconsisting of the Company stockholders as of the date of the closing and their Parents and Subsidiaries) that becomes the “beneficial owner” (as defined inRule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by theCompany’s then outstanding voting securities; or

(b) The consummation of a merger, consolidation, reorganization or similar transaction in which the stockholders of the Company before suchtransaction (and their Parents and Subsidiaries) own less than 50% of the voting stock or voting power of the surviving entity immediately after suchtransaction; or

(c) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets.

C. Post Termination Exercise Period.

The Option may be exercised for three (3) months after the Optionee ceases to be a Service Provider, which shall be measured from the last day of activeservice and not extended by any notice period required under local law. Notwithstanding the foregoing, in the event that the Optionee ceases to be a ServiceProvider as a result of a violation by the Service Provider of the Company’s policies (including, the Code of Business Conduct and Ethics and other policies setforth in the Employee Handbook), the Option shall terminate immediately on the date upon which Optionee ceases to be a Service Provider and shall no longerbe vested or exercisable in any respect. Upon the death or Disability of the Optionee, the Option may be exercised for twelve (12) months after the Optioneeceases to be a Service Provider. In no event shall the Option be exercised later than the expiration date of the Option.

D. Exercise of Option.

(1) Right to Exercise. The Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicableprovisions of the Plan and this Stock Option Agreement.

(2) Method of Exercise. Unless otherwise noted in Section D(3) below, the Option is exercisable by delivery of an exercise notice, which shall state theelection to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representationsand agreements as may be required by the Company pursuant to the provisions of the Plan. The exercise notice shall be completed by the Optionee and deliveredto Shareholder Services at the Company. The exercise notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. TheOption shall be deemed to be exercised upon receipt by the Company of such fully executed exercise notice accompanied by such aggregate Exercise Price.

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No Shares shall be issued pursuant to the exercise of the Option unless such issuance and exercise complies with applicable laws. Assuming suchcompliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respectto such Exercised Shares.

(3) Method of Payment.

Unless stated otherwise in this Stock Option Agreement, payment of the aggregate Exercise Price shall be by any of the following, or a combinationthereof, at the election of the Optionee and to the extent permitted by the Administrator:

(a) cash; or

(b) check; or

(c) for U.S. employees, surrender of other Shares which (i) in the case of Shares acquired upon exercise of an option, have been owned by theOptionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate ExercisePrice of the Exercised Shares; or

(d) delivery of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shallrequire to effect a same day sale (i.e., a cashless-sell all exercise). Pursuant to a same day sale exercise, Optionee will authorize the broker to sell all theShares that he or she is entitled to at exercise and remit the sale proceeds less the aggregate Exercise Price for the Shares, broker’s fees and any applicabletaxes to the Optionee in cash.

E. Non-Transferability of Option.

Unless otherwise provided by the Administrator, the Option may not be transferred in any manner otherwise than by will or by the laws of descent ordistribution and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of the Plan, this Stock Option Agreement and the Notice ofGrant shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

F. Term of Option.

The Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Planand the terms of this Stock Option Agreement.

G. U.S. Tax Consequences.

Some of the U.S. federal tax consequences relating to the Option are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THETAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. IN ADDITION, DIFFERENT TAX LAWS WILL APPLY TO EMPLOYEES SUBJECTTO TAX OUTSIDE THE U.S. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THESHARES.

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(1) Exercising the Option.

(a) U.S. Non-Qualified Stock Option. The Optionee may incur regular U.S. federal income tax liability upon exercise of an NQSO. The Optioneewill be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of theExercised Shares on the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will berequired to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to apercentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholdingamounts are not delivered at the time of exercise.

(b) U.S. Incentive Stock Option. If this Option qualifies as an ISO, the Optionee will have no regular U.S. federal income tax liability upon itsexercise, although the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price will betreated as an adjustment to alternative minimum taxable income for U.S. federal tax purposes and may subject the Optionee to alternative minimum tax inthe year of exercise. In the event that the Optionee ceases to be an Employee but remains a Service Provider, any ISO of the Optionee that remainsunexercised shall cease to qualify as an ISO and will be treated for tax purposes as an NQSO on the date three (3) months and one (1) day following suchchange of status.

(2) Disposition of Shares.

(a) U.S. Non-Qualified Stock Option. If the Optionee holds NQSO Shares for at least one year, any gain realized on disposition of the Shares will betreated as long-term capital gain for U.S. federal income tax purposes.

(b) U.S. Incentive Stock Option. If the Optionee holds ISO Shares for at least one year after exercise and two years after the grant date, any gainrealized on disposition of the Shares will be treated as long-term capital gain for U.S. federal income tax purposes. If the Optionee disposes of ISO Shareswithin one year after exercise or two years after the grant date, any gain realized on such disposition will be treated as compensation income (taxable atordinary income rates) equal to the lesser of (A) the difference between the Fair Market Value of the Shares acquired on the date of exercise and theaggregate Exercise Price, or (B) the difference between the sale price of such Shares and the aggregate Exercise Price. Any additional gain will be taxed ascapital gain, short-term or long-term depending on the period that the ISO Shares were held.

(c) Notice of Disqualifying Disposition of ISO Shares. If the Optionee sells or otherwise disposes of any of the Shares acquired pursuant to an ISOon or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, the Optionee shall immediately notify the Company inwriting of such disposition. The Optionee agrees that he or she may be subject to income tax withholding by the Company on the compensation incomerecognized from such early disposition of ISO Shares by payment in cash or out of the current earnings paid to the Optionee.

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H. Responsibility for Taxes. Regardless of any action the Company or Optionee’s employer (the “Employer”) takes with respect to any or all income tax, socialinsurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), Optionee acknowledges that the ultimate liability for allTax-Related Items legally due by him or her is and remains Optionee’s responsibility and that the Company and/or the Employer (1) make no representations orundertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option grant, including the grant, vesting or exercise of theOption, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to structure the terms of thegrant or any aspect of the Option to reduce or eliminate Optionee’s liability for Tax-Related Items. Prior to the exercise of the Option, Optionee shall pay ormake adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Companyand/or the Employer. In this regard, Optionee authorizes the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable byOptionee from his or her wages or other cash compensation paid to Optionee by the Company and/or the Employer or from proceeds of the sale of the Shares.Alternatively, or in addition, if permissible under local law, the Company may (1) sell or arrange for the sale of Shares that Optionee acquires to meet thewithholding obligation for Tax-Related Items, and/or (2) withhold in Shares, provided that the Company only withholds the amount of shares necessary to satisfythe minimum withholding amount. Finally, Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or theEmployer may be required to withhold as a result of Optionee’s participation in the Plan or Optionee’s purchase of Shares that cannot be satisfied by the meanspreviously described. The Company may refuse to honor the exercise and refuse to deliver the Shares if Optionee fails to comply with his or her obligations inconnection with the Tax-Related Items as described in this section.

I. Nature of Grant. In accepting the grant, Optionee acknowledges that: (i) the Plan is established voluntarily by the Company, it is discretionary in nature and itmay be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Stock Option Agreement;(ii) the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu ofoptions, even if options have been granted repeatedly in the past; (iii) all decisions with respect to future option grants, if any, will be at the sole discretion of theCompany; (iv) Optionee’s participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of theEmployer to terminate Optionee’s employment relationship at any time with or without cause; (v) Optionee is voluntarily participating in the Plan; (vi) theOption is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and whichis outside the scope of Optionee’s employment contract, if any; (vii) the Option is not part of normal or expected compensation or salary for any purposes,including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension orretirement benefits or similar payments; (viii) in the event that Optionee is not an employee of the Company, the Option grant will not be interpreted to form anemployment contract or relationship with the Company; and furthermore, the Option

5


grant will not be interpreted to form an employment contract with the Employer or any Subsidiary or affiliate of the Company; (ix) the future value of theunderlying Shares is unknown and cannot be predicted with certainty; (x) if the underlying Shares do not increase in value, the Option will have no value; (xi) ifOptionee exercises his or her Option(s) and acquires Shares, the value of those Shares acquired may increase or decrease in value, even below the Exercise Price;(xii) in consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or diminution invalue of the Option or Shares purchased through exercise of the Option resulting from termination of Optionee’s employment by the Company or the Employer(for any reason whatsoever and whether or not in breach of local labor laws) and Optionee irrevocably releases the Company and the Employer from any suchclaim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing the Notice ofGrant, Optionee shall be deemed irrevocably to have waived his or her entitlement to pursue such claim; and (xiii) notwithstanding any terms or conditions of thePlan to the contrary, in the event of involuntary termination of Optionee’s employment (whether or not in breach of local labor laws), Optionee’s right to receiveoptions and vest in options under the Plan, if any, will terminate effective as of the date that Optionee is no longer actively employed and will not be extended byany notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law);furthermore, in the event of involuntary termination of employment (whether or not in breach of local labor laws), Optionee’s right to exercise the Option aftertermination of employment, if any, will be measured by the date of termination of his or her active employment and will not be extended by any notice periodmandated under local law; the Company shall have the exclusive discretion to determine when Optionee is no longer actively employed for purposes of his or herOption grant.

J. Data Privacy. Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personaldata as described in this Stock Option Agreement by and among, as applicable, the Employer, and the Company and its Subsidiaries and affiliates for theexclusive purpose of implementing, administering and managing Optionee’s participation in the Plan. Optionee understands that the Company and theEmployer hold certain personal information about him or her, including, but not limited to, Optionee’s name, home address and telephone number, date ofbirth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, detailsof all options or any other entitlement to Shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Optionee’s favor, for the purpose ofimplementing, administering and managing the Plan (“Data”). Optionee understands that Data may be transferred to any third parties assisting in theimplementation, administration and management of the Plan, that these recipients may be located in Optionee’s country or elsewhere, and that therecipient’s country may have different data privacy laws and protections than Optionee’s country. Optionee understands that he or she may request a listwith the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Optionee authorizes therecipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managinghis or her participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Optioneemay elect to deposit any Shares of stock acquired upon exercise of the Option. Optionee understands that Data will be held only as long as is

6


necessary to implement, administer and manage Optionee’s participation in the Plan. Optionee understands that he or she may, at any time, view Data,request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consentsherein, in any case without cost, by contacting in writing his or her local human resources representative. Optionee understands, however, that refusing orwithdrawing his or her consent may affect Optionee’s ability to participate in the Plan. For more information on the consequences of refusal to consent orwithdrawal of consent, Optionee understands that he or she may contact his or her local human resources representative.

K. Language. If Optionee has received this Stock Option Agreement or any other document related to the Plan translated into a language other than English andif the translated version is different than the English version, the English version will control.

L. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Option granted under the Plan, participation inthe Plan, or future options that may be granted under the Plan by electronic means or to request Optionee’s consent to participate in the Plan by electronic means.Optionee hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronicsystem established and maintained by the Company or another third party designated by the Company.

M. Severability. The provisions of this Stock Option Agreement are severable and if any one or more provisions are determined to be illegal or otherwiseunenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

N. Entire Agreement; Governing Law.

The Plan and the applicable Notice of Grant are incorporated herein by reference. The Plan, this Stock Option Agreement and the Notice of Grantconstitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of theCompany and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writingsigned by the Company and Optionee. This Stock Option Agreement is governed by, and subject to, the internal substantive laws, but not the choice of law rules,of the State of California. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or thisStock Option Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall beconducted only in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no othercourts, where this grant is made and/or to be performed.

O. NO GUARANTEE OF CONTINUED SERVICE.

BY SIGNING THE APPLICABLE NOTICE OF GRANT, THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARESPURSUANT TO THE VESTING SCHEDULE THEREIN IS EARNED ONLY BY CONTINUING AS A

7


SERVICE PROVIDER AT THE WILL OF THE EMPLOYER (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION ORPURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONSCONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH IN THE NOTICE OF GRANT AND HEREIN DO NOT CONSTITUTEAN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANYPERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE EMPLOYER’S RIGHT TO TERMINATE OPTIONEE’SRELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

* * * * *

By signing the Notice of Grant, Optionee acknowledges receipt of a copy of the Plan, this Stock Option Agreement and certain information related theretoand represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions of thePlan, this Stock Option Agreement and the Notice of Grant. Optionee has reviewed the Plan, this Stock Option Agreement and the Notice of Grant in theirentirety, has had an opportunity to obtain the advice of counsel prior to executing the Notice of Grant and fully understands all provisions of the Plan, this StockOption Agreement and the Notice of Grant. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administratorupon any questions relating to the Plan, this Stock Option Agreement and the Notice of Grant.

8


EXHIBIT ATO THE TIBCO SOFTWARE INC.

STOCK OPTION AGREEMENT

This Exhibit A includes additional terms and conditions of the grant of Options that will apply to Optionees in the countries listed below. Please note thatthe exchange control information provided below is current as of April 2006, unless otherwise noted herein. However, exchange controls are subject to changeand Optionee should consult his or her personal advisor(s) with respect to the applicable exchange controls (if any) which may apply to the exercise of theOption, acquisition and/or sale of the Shares. Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and thisStock Option Agreement.

Australia

Optionee’s Option is granted pursuant to the Australian Addendum which is an addendum to the Plan. Optionee’s Option is subject to the terms andconditions as stated in the Australian Addendum, Offer Document, the Plan, the Notice of Grant and this Stock Option Agreement. Optionee will receive a copyof each of these documents when a grant is made to him or her.

Austria

Optionee acknowledges that he or she may be entitled to revoke the Stock Option Agreement on the basis of the Austrian Consumer Protection Actaccording to the following rules:

(i) If Optionee accepts the award of Options under the Plan, Optionee may be entitled to revoke his or her acceptance of the Stock Option Agreement.The revocation must be made within one week after Optionee accepted the Stock Option Agreement.

(ii) The revocation must be in written form to be valid. It is sufficient if Optionee returns the Stock Option Agreement to the Company or the

Company’s representative with language that can be understood as his or her refusal to conclude or honor the Stock Option Agreement. It issufficient if the revocation is sent within the period discussed above.

Belgium

Optionee will receive a separate Offer Document and an Undertaking Form in addition to this Stock Option Agreement. Optionee should consult his or herpersonal tax advisor with respect to completing the Undertaking Form.

Brazil

By accepting this Option, Optionee acknowledges that he or she agrees to comply with applicable Brazilian laws and pay any and all applicable taxesassociated with the exercise of the

9


Option and the sale of Shares. An Optionee resident or domiciled in Brazil will be required to submit annually a declaration of assets and rights held outside ofBrazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$100,000. Assets and rights that must bereported include Shares of Company stock.

Canada (Quebec)

If Optionee is a resident of Quebec, by accepting this Option, Optionee hereby provides his or her consent to receive Plan information in English.Specifically, Optionee acknowledges as follows:

The parties acknowledge that it is their express wish that the present Stock Option Agreement, as well as all documents, notices and legal proceedingsentered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Les parties reconnaissent avoir exigé la rédaction en anglais de la présente convention, ainsi que de tous documents exécutés, avis donnés et procéduresjudiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.

China

Due to exchange control requirements, Optionee must exercise his or her Option using the “same day sale” method of exercise as described in SectionD(3)(d) of this Stock Option Agreement. Optionee may exercise the Option only by delivery of properly executed exercise instructions together with such otherdocumentation as the Administrator and the broker, if applicable, shall require to effect the exercise of the Option and delivery to the Company of the saleproceeds required to pay the aggregate Exercise Price. Optionee will not be permitted to pay the aggregate Exercise Price in cash or by check.

France

The Option grant is not French tax-qualified.

Optionee may hold Shares obtained under the Plan outside of France provided that Optionee declares all foreign accounts, whether open, current, orclosed, in Optionee’s income tax return.

Germany

Optionee must report any receivables or payables or debts in foreign currency exceeding an amount of approximately €5,000,000 on a monthly basis. Inaddition, Optionee must report, on an annual basis, if he or she holds Shares exceeding 10% of the total voting capital of the Company.

Hong Kong

Due to securities law restrictions in Hong Kong, Optionee undertakes not to sell any Shares acquired under the Plan for at least six months from the grantdate of the Option. At the Company’s discretion, the Company may retain the original stock certificate in escrow until the expiration of the six-month period.Optionee will receive a copy of the stock certificate.

10


In the event Optionee’s grant is determined to be governed by the Occupational Retirement Schemes Ordinance, Optionee’s grant may be cancelled.

India

By accepting the grant of Options, Optionee consents and agrees to satisfy any liability for fringe benefit tax that may be payable by the Company and/orthe Employer in connection with the Options. Further, by accepting the grant of Options, Optionee agrees that the Company and/or the Employer may collect thefringe benefit tax from the Optionee by any of the means set forth in Section G of this Stock Option Agreement. Optionee further agrees to execute any otherconsents or elections required to accomplish the above, promptly upon request of the Company.

Proceeds from the sale of Shares must be repatriated to India within a reasonable period of time (i.e., two weeks). Optionee should obtain a foreign inwardremittance certificate from the bank for his or her records to document compliance with this requirement and submit a copy of the foreign inward remittancecertificate to his or her Employer.

Ireland

Directors and shadow directors of an Irish subsidiary are subject to certain notification requirements under the Companies Act. Directors and shadowdirectors must notify the Irish subsidiary in writing of their interest in the Company and the number and class of Shares or rights to which the interest relateswithin five days of the acquisition or disposal of Shares or within five days of becoming aware of the event giving rise to the notification. This disclosurerequirement also applies to any rights or Shares acquired by the director’s spouse or children (under the age of 18).

Italy

To facilitate compliance with securities laws in Italy, Optionee must exercise his or her Option using the “same day sale” method of exercise as describedin Section D(3)(d) of this Stock Option Agreement. Optionee may exercise the Option only by delivery of properly executed exercise instructions together withsuch other documentation as the Administrator and the broker, if applicable, shall require to effect the exercise of the Option and delivery to the Company of thesale proceeds required to pay the aggregate Exercise Price. Optionee will not be permitted to pay the aggregate Exercise Price in cash or by check.

Exchange control reporting is required if Optionee holds foreign investments outside of Italy (including Shares) in excess of €12,500 or the equivalentamount in U.S. dollars. If reporting is required, it must be done on Optionee’s individual tax return.

For data privacy purposes, the Controller of personal data processing is TIBCO Software Inc., with registered offices in 3302 Hillview Avenue, Palo Alto,California, 94304, U.S.A., and pursuant to Legislative Decree no. 196/2003, its representative in Italy is TIBCO Software S.r.l. with registered offices at Via delCasale Solaro, 110, Rome 00143.

11


Japan


Luxembourg


Malaysia


If Optionee is a Malaysian resident for exchange control purposes and if the value of funds remitted to purchase Shares under the Plan exceedsMYR50,000, Optionee must notify Bank Negara at least seven working days before the remittance (Optionee can estimate the amount that Optionee intends toremit) by submitting a prescribed Form SSC 9B. Please note that the above threshold is calculated on a cumulative basis. These requirements apply to both cashand cashless exercises. Optionee should check with his or her personal advisor to determine the filing requirements applicable to Optionee’s particularcircumstances.

If Optionee is a director of a Malaysian Subsidiary of the Company, Optionee is subject to certain notification requirements under the MalaysianCompanies Act, 1965. Among these requirements is an obligation to notify the Malaysian Subsidiary in writing when Optionee receives an interest (e.g.,Options, Shares, etc.) in the Company or any related entity. In addition, Optionee must notify the Malaysian Subsidiary when Optionee sells Shares of theCompany or any related entity (including when Optionee sells Shares acquired under the Plan). These notifications must be made within fourteen days ofacquiring or disposing of any interest in the Company or any related entity.

Mexico

In accepting the Option, Optionee acknowledges that he or she understands and agrees that: (i) the Option is not related to the salary and other contractualbenefits granted to Optionee by the Employer; (ii) any modification of the Plan or its termination shall not constitute a change or impairment of the terms andconditions of Optionee’s employment; and (iii) any benefit realized under the Plan is a fringe benefit.

Policy Statement. La invitación que la Compañía hace en relación con el Plan es unilateral y discrecional, por lo tanto, la Compañía se reserva elderecho absoluto para modificar o terminar el mismo en cualquier momento, sin ninguna responsabilidad para el Opcionante. Esta invitación y, en el caso delOpcionante, la adquisición de acciones, de ninguna manera establecen relación laboral alguna entre el Opcionante y la Compañía. Tampoco establece derechoalguno entre el Opcionante y su empleador.

English Translation. The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absoluteright to amend it and discontinue it at any time without any liability to the Optionee. This invitation and, in Optionee’s case, the acquisition of Shares does not, inany way, establish a labor relationship between the Optionee and the Company and it does not establish any rights between the Optionee and the Employer.

12


Netherlands

For Option grants made after January 1, 2005, employees resident in the Netherlands may use any method of exercise specified in Section D(3) of thisStock Option Agreement to exercise Options. For Options granted prior to this date, exercise restrictions may apply and Optionee should review the terms of hisor her grant, including any addenda to the relevant stock option agreement to determine whether there are any exercise restrictions.

Norway


Portugal

If Optionee acquires Shares upon exercise and does not hold the Shares with a Portuguese financial intermediary, Optionee must file a report with thePortuguese Central Bank. If the Shares are held by a Portuguese financial intermediary, it will file the report for Optionee.

By accepting this Option, Optionee acknowledges that he or she understands and agrees that: (i) Options granted at a fixed price will not create anyobligation on the Company to grant Options in the future; and (ii) Optionee recognizes the absolute right of the Company to amend or cancel the Plan at any timewithout incurring any liability to Optionee.

Russia

If Optionee acquires Shares upon exercise, the Shares will be held for Optionee in a U.S. brokerage account. Optionee will not be permitted to requestshare certificates and hold the certificates in Russia. Optionee may sell his or her Shares on a U.S. stock market; Optionee is not permitted to sell shares in theCompany directly to other Russian individuals.

This Stock Option Agreement, the Plan and all other materials Optionee may receive regarding his or her participation in the Plan do not constituteadvertising or an offering of securities in Russia. The issuance of securities pursuant to the Plan has not and will not be registered in Russia and hence thesecurities described in any Plan-related documents may not be used for offering or public circulation in Russia.

All proceeds from the sale of Shares must be repatriated to Russia through an authorized bank in Russia. After repatriation, Optionee may transfer thefunds to an “offshore” (foreign) bank account outside of Russia, but must give notice to the Russian tax authorities about the opening/closing of each foreignaccount within one month after the account is opened/closed and report to the Russian tax authorities records of the flow of funds in the foreign accounts as wellas records of the account balances. Also, if Optionee uses a cash method of exercise, he or she may be required to make the remittance of cash through anauthorized bank in Russia.

13


Singapore

The grant of the Option under the Plan is being made on a private basis and is, therefore, exempt from registration in Singapore.

If Optionee is a director, associate director or shadow director of a Singapore affiliate of the Company, Optionee is subject to certain notificationrequirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Singaporean affiliate in writing when Optioneereceives an interest (e.g., Options, Shares) in the Company or any related companies. Please contact the Company to obtain a copy of the notification form. Inaddition, Optionee must notify the Singapore affiliate when Optionee sells Shares of the Company or any related company (including when Optionee sell Sharesacquired through exercise of his or her Option). These notifications must be made within two days of acquiring or disposing of any interest in the Company orany related company. In addition, a notification must be made of Optionee’s interests in the Company or any related company within two days of becoming adirector.

South Africa

If Optionee is a permanent resident of South Africa, he or she may invest up to ZAR 2 million in foreign investments (including Company Shares).Investments exceeding this amount require approval by the South African Reserve Board. Optionee should consult his or her personal advisor regarding how thislimitation is calculated. Compliance with the exchange controls is Optionee’s sole responsibility and neither the Company nor the Employer take anyresponsibility for Optionee’s compliance.

South Korea


If Optionee remits funds to purchase Shares, the remittance has to be “confirmed” by a foreign exchange bank in Korea. To receive the confirmation,Optionee should submit (i) a prescribed form application, (ii) this Stock Option Agreement and any other Plan documents that Optionee received, and(iii) certificates of employment with Optionee’s Employer. Optionee should check with the bank to determine whether there are any additional requirements. IfOptionee exercises his or her Option using the “same day sale” method of exercise as described in Section D(3)(d), this requirement will not apply. This is anautomatic procedure (i.e., the bank does not need to “approve” the remittance) and should take no more than a single day to process. Exchange control laws alsorequire Korean residents who realize US$500,000 or more from the sale of Shares to repatriate the proceeds to Korea within six months of the sale.

Spain

In accepting the Option, Optionee acknowledges that he or she consents to participation in the Plan and has received a copy of the Plan. The Optioneeunderstands that the Company has unilaterally, gratuitously and discretionally decided to grant options under the Plan to individuals who may be employees ofthe Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that anygrant

14


will not economically or otherwise bind the Company or any of its Subsidiaries on an ongoing basis. Consequently, the Optionee understands that the Option isgranted on the assumption and condition that the Option or the Shares acquired upon exercise shall not become a part of any employment contract (either withthe Company or any of its Subsidiaries) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or anyother right whatsoever. In addition, the Optionee understands that this grant would not be made to the Optionee but for the assumptions and conditions referred toabove; thus, the Optionee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met forany reason, then any grant of Options shall be null and void.

To participate in the Plan, Optionee must comply with exchange control regulations in Spain. The purchase of Shares under the Plan must be declared forstatistical purposes to the Spanish Dirección General de Política Comercial e Inversiones Exteriores (the “DGPCIE”), the Bureau for Commercial Policy andForeign Investments, which is a department of the Ministry of the Economy. If the Optionee purchases the Shares through the use of a Spanish financialinstitution, that institution will automatically make the declaration to the DGPCIE for Optionee. Otherwise, the Optionee must make the declaration himself orherself by filing a form with the DGPCIE. When receiving foreign currency payments derived from the ownership of Shares (i.e., dividends or sale proceeds),Optionee must inform the financial institution receiving the payment of the basis upon which such payment is made. Optionee will need to provide the institutionwith the following information: (i) Optionee’s name, address, and fiscal identification number; (ii) the name and corporate domicile of the Company; (iii) theamount of the payment; the currency used; (iv) the country of origin; (v) the reasons for the payment; and (vi) further information that may be required. IfOptionee acquires Shares under the Plan and wishes to import the ownership title of such Shares (i.e., share certificates) into Spain, the Optionee must declare theimportation of such securities to the DGPCIE.

Sweden


Switzerland

The offer is considered a private offering in Switzerland and is therefore not subject to registration in Switzerland.

Taiwan


United Arab Emirates


* * * * *

15


Exhibit 21

TIBCO SOFTWARE INC.

SUBSIDIARIES OF THE REGISTRANT*

Name (Jurisdiction of Incorporation)

3301 Hillview Holdings Inc. (Delaware)

Spotfire AB (Sweden)

Spotfire, Inc. (Delaware)

Spotfire Japan KK (Japan)

TIBCO BPM (United Kingdom)

TIBCO BPM Australia Pty Ltd (Australia)

TIBCO BPM Holdings Limited (United Kingdom)

TIBCO Software AB (Sweden)

TIBCO Software AS (Norway)

TIBCO Software Australia Pty Ltd (Australia)

TIBCO Software B.V. Holland (Netherlands)

TIBCO Software Brasil LTDA (Brazil)

TIBCO Software Canada Inc. (Canada)

TIBCO Software Cayman Holdings Ltd. (Cayman Islands)

TIBCO Software France S.A.R.L. (France)

TIBCO Software FZ-LLC (United Arab Emirates)

TIBCO Software GmbH (Germany)

TIBCO Software Holdings LLC (Delaware)

TIBCO Software Holdings Ltd. (United Kingdom)

TIBCO Software Hong Kong Limited (Hong Kong)

TIBCO Software India Private Limited (India)

TIBCO Software (Ireland) Limited (Ireland)

TIBCO Software International Inc. (Delaware)

TIBCO Software Japan, Inc. (Japan)

TIBCO Software Korea Ltd. (South Korea)

TIBCO Software Limited (United Kingdom)

TIBCO Software LLC (Russia)

TIBCO Software N.V. (Belgium)

TIBCO Software Portugal - Sociedade Unipessoal, Lda (Portugal)

TIBCO Software S.A. de C.V (Mexico)

TIBCO Software (Schweiz) AG (Switzerland)

TIBCO Software S.L. (Spain)

TIBCO Software S.r.l. (Italy)

TIBCO Software Singapore Pte Ltd (Singapore)

TIBCO Software (South Africa) (Pty) Ltd (South Africa)

TIBCO Sweden Holdings AB (Sweden)

TIBCO Talarian Inc. (Delaware)

TS Innovations (PROPRIETARY) LIMITED (South Africa)

* Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of other subsidiaries of TIBCO Software Inc. are omitted because, considered in the aggregate,they would not constitute a significant subsidiary as of the end of the fiscal year covered by this Annual Report on Form 10-K.


Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-142229, 333-124354, 333-102082, 333-88770,333-88730, 333-30088, 333-88811, 333-48260, 333-52644, 333-75736 and 333-111548) of TIBCO Software Inc. of our report dated January 25, 2008 relating tothe financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/S/ PRICEWATERHOUSECOOPERS LLP

San Jose, CaliforniaJanuary 25, 2008


Exhibit 31.1

TIBCO SOFTWARE INC.

CERTIFICATION

I, Vivek Y. Ranadivé, certify that:

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

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

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

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

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure

that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;

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

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

Date: January 25, 2008 /s/ Vivek Y. Ranadivé Vivek Y. Ranadivé Chairman and Chief Executive Officer


Exhibit 31.2

TIBCO SOFTWARE INC.

CERTIFICATION

I, Murray D. Rode, certify that:

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

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

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

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

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure

that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;

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

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

Date: January 25, 2008

/s/ Murray D. RodeMurray D. Rode

Chief Financial Officer andExecutive Vice President, Strategic Operations


Exhibit 32.1

TIBCO SOFTWARE INC.

CERTIFICATION

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

(a) the Annual Report on Form 10-K of the Company for the fiscal year ended November 30, 2007, as filed with the Securities and ExchangeCommission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

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

Dated: January 25, 2008 /s/ Vivek Y. Ranadivé Vivek Y. Ranadivé Chairman and Chief Executive Officer

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


Exhibit 32.2

TIBCO SOFTWARE INC.

CERTIFICATION

I, Murray D. Rode, Chief Financial Officer and Executive Vice President, Strategic Operations of TIBCO Software Inc. (the “Company”), do herebycertify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. Section 1350, that, to myknowledge:

(a) the Annual Report on Form 10-K of the Company for the fiscal year ended November 30, 2007, as filed with the Securities and ExchangeCommission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

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

Dated: January 25, 2008 /s/ Murray D. Rode Murray D. Rode

Chief Financial Officer and

Executive Vice President, Strategic Operations

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

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