| A: | Any Slack employee who is not a participant in any offering period in effect as of the date of the merger agreement may not become a participant in any offering periods in effect under the ESPP as of the date of the merger agreement (the “current ESPP offering periods”) and no participant may increase the percentage of his or her payroll deduction election from that in effect on the date of the merger agreement for such current ESPP offering periods. If the current ESPP offering periods terminate prior to the effective time, then the ESPP will be suspended and no new offering period will commence under the ESPP prior to the termination of the merger agreement. If any current ESPP offering period is still in effect at the effective time, then the last day of such current ESPP offering period will be accelerated to a date prior to the closing date as specified by the Tableau board of directors. Subject to the consummation of the merger, the ESPP will terminate effective immediately prior to the effective time. See “Merger Agreement—Treatment of Tableau Equity Awards.”
Will I have to pay a fee or commission to exchange my shares of Tableau common stock?
If you are the record owner of your shares of Tableau common stock and you tender these shares in the offer, you will not have to pay any brokerage fees, commissions or similar expenses. If you own your shares of Tableau common stock through a broker, dealer, commercial bank, trust company or other nominee and your broker,
dealer, commercial bank, trust company or other nominee tenders your Tableau shares on your behalf, your broker or such other nominee may charge a fee for doing so. You should consult with your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply.
Why is Salesforce making this offer?
The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares, and the merger is the second step in such plan.
In the offer, if a sufficient number of Tableau shares are tendered into the offer prior to the expiration time of the offer such that Salesforce and the Offeror will own at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer, subject to the satisfaction or waiver of the other conditions to the offer, Salesforce and the Offeror will accept for exchange, and will exchange, the shares tendered in the offer. Then, thereafter and as the second step in Salesforce’s plan to acquire all of the outstanding Tableau shares, Salesforce intends to promptly consummate a merger of the Offeror with and into Tableau, with Tableau surviving the merger (which we refer to as the “merger”). The purpose of the merger is for Salesforce to acquire all remaining Tableau shares that it did not acquire in the offer. Upon consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former stockholders of Tableau will no longer have any direct ownership interest in the surviving corporation. If the offer is completed (such that Salesforce and the Offeror will own at least a majority of the aggregate voting power of the outstanding shares of Tableau common stock), the merger will be governed by Section 251(h) of the DGCL, and accordingly, no stockholder vote will be required to consummate the merger.
What does the Tableau board of directors recommend?
The board of directors of Tableau has unanimously (i) determined that the terms of the merger agreement and the transactions contemplated by the merger agreement, including the offer, the merger and the issuance of Salesforce shares in connection therewith, are fair to, and in the best interests of, Tableau and its stockholders; (ii) determined that it is in the best interests of Tableau and its stockholders and declared it advisable to enter into the merger agreement; (iii) approved the execution and delivery by Tableau of the merger agreement, the performance by Tableau of its covenants and agreements contained in the merger agreement and the consummation of the offer, the merger and the other transactions contemplated by the merger agreement upon the terms and subject to the conditions contained in the merger agreement; and (iv) resolved to recommend that the stockholders of Tableau accept the offer and tender their shares of Tableau common stock to the Offeror pursuant to the offer.
See “The Offer—Tableau’s Reasons for the Offer and the Merger; Recommendation of the Tableau Board of Directors,” for more information. A description of the reasons for this recommendation is also set forth in Tableau’s Solicitation/Recommendation Statement on Schedule 14D-9 (which we refer to as the “Schedule 14D-9”), which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.
What are the most significant conditions of the offer?
The offer is conditioned upon, among other things, the following:
| • | | Minimum Tender Condition—Tableau stockholders having validly tendered and not validly withdrawn in accordance with the terms of the offer and prior to the expiration of the offer a number of shares of Tableau common stock that, upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn), will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together
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| with any shares of Tableau common stock then owned by Salesforce and the Offeror, would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer (which we refer to as the “minimum tender condition”“current ESPP offering periods”);, may not become a participant in the current offering period and no current participant may increase the percentage of his or her payroll deduction election from that in effect on the date of the merger agreement for such current ESPP offering period. If the first effective time occurs after April 9, 2021 (the end of the current ESPP offering period), then the ESPP will be suspended and no new offering period will commence under the ESPP prior to the termination of the merger agreement. If the first effective time occurs before April 9, 2021 (the end of the current ESPP offering period), then the last day of the current ESPP offering period will be accelerated to a date that is three business days prior to the closing date. Subject to the consummation of the mergers, the ESPP will terminate effective immediately prior to the first effective time.
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See the section entitled “The Merger Agreement—Treatment of Slack Equity Awards” for more information. | Q: | What equity stake will Slack stockholders hold in Salesforce immediately following the merger? |
| • | A: | Regulatory Approvals—Any applicable waiting period underBased on the Hart-Scott-Rodino Antitrust Improvements Actnumber of 1976,issued and outstanding shares of Salesforce and Slack common stock as amended,of , 2021, the last practicable date before the date of the proxy statement/prospectus, and the rulesexchange ratio of 0.0776 shares of Salesforce common stock for each share of Slack common stock, holders of shares of Slack common stock as of immediately prior to the first effective time would hold, in the aggregate, approximately % of the issued and regulations promulgated thereunder (which we referoutstanding shares of Salesforce common stock immediately following the first effective time. The exact equity stake of Slack stockholders in Salesforce immediately following the first effective time will depend on the number of shares of Salesforce common stock and Slack common stock issued and outstanding immediately prior to the first effective time, as provided in the “HSR Act”) having expired or been terminated, and any required pre-closing approvals, consents, waivers or clearances undersection entitled “The Merger Agreement—Merger Consideration.”
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| Q: | How does the applicable antitrust laws of Germany having been obtained;Slack board recommend that I vote? |
| A: | •The Slack board unanimously recommends that Slack stockholders vote “FOR” the approval of the merger proposal and “FOR” the approval of the non-binding compensation advisory proposal. For additional information regarding how the Slack board recommends that Slack stockholders vote, see the section entitled “The Mergers—Recommendation of the Slack Board and Reasons for the Mergers.” |
| Q: | Why are Slack stockholders being asked to vote on executive officer compensation? |
| A: | The SEC has adopted rules that require Slack to seek a non-binding advisory vote on certain compensation that may be paid or become payable to Slack’s named executive officers that is based on or otherwise relates to the mergers. Slack urges its stockholders to read the section entitled “The Mergers—Interests of Slack Directors and Executive Officers in the Mergers.” |
| Q: | Who is entitled to vote at the special meeting? |
| A: | The Slack board has fixed , 2021 as the record date for the Slack special meeting. All holders of record of shares of Slack common stock as of the close of business on the record date are entitled to receive notice of, and to vote at, the Slack special meeting via the Slack special meeting website, provided that those shares remain outstanding on the date of the Slack special meeting. As of the record date, there were shares of Slack Class A common stock outstanding and shares of Class B common stock outstanding. Attendance at the Slack special meeting via the Slack special meeting website is not required to vote. Instructions on how to vote your shares without virtually attending the Slack special meeting are provided in this section below. |
| Q: | How many votes do I have? |
| A: | Each share of Class A common stock is entitled to one vote on each proposal and each share of Class B common stock is entitled to 10 votes on each proposal. |
| Q: | What constitutes a quorum for the Slack special meeting? |
| A: | A quorum of Slack stockholders is necessary to hold a valid meeting. The presence at the Slack special meeting, in person (including via the Slack special meeting website) or by proxy, of the holders of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote at the Slack special meeting constitutes a quorum. Abstentions, withhold votes and broker non-votes are counted as shares present and entitled to vote for the purposes of determining a quorum. |
| Q: | What will happen to Slack as a result of the mergers? |
| A: | If the first merger is completed, Merger Sub I will merge with and into Slack. As a result of the first merger, the separate corporate existence of Merger Sub I will cease, and Slack will continue as the surviving corporation in the first merger and as a wholly owned subsidiary of Salesforce. Immediately after the first merger, Slack, as the surviving corporation in the first merger, will merge into either Merger Sub II or Salesforce. As a result of the second merger, the separate corporate existence of Slack will cease, and either Merger Sub II will continue as the surviving company and as a wholly owned subsidiary of Salesforce or Salesforce will continue as the surviving company. Furthermore, shares of Slack Class A common stock will be delisted from the NYSE and will no longer be publicly traded. |
| Q: | I own shares of Slack common stock. What will happen to those shares as a result of the mergers? |
| A: | If the first merger is completed, your shares of Slack common stock will be converted into the right to receive the merger consideration. All such shares of Slack common stock, when so converted, will cease to |
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| | be outstanding and will automatically be cancelled. Each holder of a share of Slack common stock that was outstanding immediately prior to the first effective time will cease to have any rights with respect to shares of Slack common stock except the right to receive the merger consideration, any dividends or distributions made with respect to shares of Salesforce common stock with a record date after the first effective time of the first merger, and any cash to be paid in lieu of any fractional shares of Salesforce common stock, in each case to be issued or paid upon the exchange of any certificates or book-entry shares of Slack common stock for merger consideration. For additional information, see the sections entitled “The Mergers—Consideration to Slack Stockholders” and “The Merger Agreement—Merger Consideration.” |
| Q: | Where will the Salesforce common stock that Slack stockholders receive in the first merger be publicly traded? |
| A: | Assuming the first merger is completed, the shares of Salesforce common stock that Slack stockholders receive in the first merger will be listed and traded on the NYSE. |
| Q: | What happens if the mergers are not completed? |
| A: | If the merger proposal is not approved by Slack stockholders or if the mergers are not completed for any other reason, Slack stockholders will not receive any merger consideration in connection with the mergers, and their shares of Slack common stock will remain outstanding. Slack will remain an independent public company and Slack common stock will continue to be listed and traded on the NYSE. Additionally, if the merger proposal is not approved by Slack stockholders or if the mergers are not completed for any other reason, Salesforce will not issue shares of Salesforce common stock to Slack stockholders. If the merger agreement is terminated under specified circumstances, Slack may be required to pay Salesforce a termination fee. For a more detailed discussion of the termination-related fee, see “The Merger Agreement—Termination.” |
| Q: | What happens if the non-binding compensation advisory proposal is not approved? |
| A: | This vote is advisory and non-binding, and the mergers are not conditioned or dependent upon the approval of the non-binding compensation advisory proposal. However, Slack and Salesforce value the opinions of Slack stockholders and Salesforce expects to consider the outcome of the vote, along with other relevant factors, when considering future executive compensation, assuming the mergers are completed. |
| Q: | What is a proxy and how can I vote my shares via the Slack special meeting website? |
| A: | A proxy is a legal designation of another person to vote the stock you own. Shares of Slack common stock held directly in your name as the stockholder of record as of the close of business on , 2021, the record date, may be voted at the Slack special meeting via the Slack special meeting website. If you choose to attend the Slack special meeting and vote your shares via the Slack special meeting website, you will need the 16-digit control number included on your proxy card. If you are a beneficial owner of Slack common stock but not the stockholder of record of such shares of Slack common stock, you have the right to direct your broker, bank, or other nominee as to how to vote your shares if you follow the instructions you receive from your broker, bank, or nominee. You can also choose to vote your shares before the Slack special meeting via the Slack special meeting website, in each case by using the 16-digit control number, which is in the instructions accompanying your proxy materials, if your broker, bank, or nominee makes those instructions available. |
| Q: | How can I vote my shares without attending the special meeting? |
| A: | If you are a stockholder of record, there are four ways to vote: |
by Internet at www.proxyvote.com 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on , 2021 (have your Notice or proxy card in hand when you visit the website); -6-
by toll-free telephone at 1-800-690-6903, until 11:59 p.m. Eastern Time on , 2021 (have your Notice or proxy card in hand when you call); by completing and mailing your proxy card; or by Internet during the Slack special meeting. Instructions on how to attend and vote at the Slack special meeting are described at www.virtualshareholdermeeting.com/WORK2021SM. In order to be counted, proxies submitted by telephone or Internet must be received by 11:59 p.m. Eastern Time on , 2021. Proxies submitted by U.S. mail must be received before the start of the Slack special meeting. If you are a street name stockholder, please follow the instructions from your broker, bank, or other nominee to vote by Internet, telephone, or mail before the meeting, or by Internet during the Slack special meeting, in each case by using the 16-digit control number, which is in the instructions accompanying your proxy materials, if your broker, bank, or nominee makes those instructions available. | Q: | What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
| A: | EffectivenessRegistered Stockholders. If shares of Form S-4—The registration statementSlack common stock are registered directly in your name with our transfer agent, Computershare, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote by Internet during the meeting or vote through the Internet, by telephone, or by filling out and returning the proxy card.
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Street Name Stockholders. If shares of Slack common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the notice was forwarded to you by your broker or nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, or other nominee as to how to vote your shares if you follow the instructions you receive from your broker, bank, or nominee. You can also choose to vote your shares before the special meeting by Internet or telephone or by Internet during the special meeting, in each case by using the 16-digit control number, which is in the instructions accompanying your proxy materials, if your broker, bank, or nominee makes those instructions available. | Q: | What should I do if I receive more than one set of voting materials? |
| A: | You may receive more than one set of voting materials relating to the Slack special meeting if you hold shares of Slack common stock in “street name” and also directly in your name as a stockholder of record or otherwise or if you hold shares of Slack common stock in more than one brokerage account. |
Stockholders of record. For shares of Slack common stock held directly, complete, sign, date and return each proxy card (or cast your vote by phone or the Internet as provided on each proxy card) or otherwise follow the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your shares of Slack common stock are voted. Shares in “street name.” For shares of Slack common stock held in “street name” through a broker, bank or other nominee, follow the instructions provided by your broker, bank or other nominee to vote your shares. | Q: | If a stockholder gives a proxy, how will the shares of Slack common stock covered by the proxy be voted? |
| A: | If you provide a proxy, regardless of whether you provide that proxy by phone, the Internet or completing and returning the applicable enclosed proxy card, the individuals named on the enclosed proxy card will vote your shares of Slack common stock in the way that you indicate when providing your proxy in respect of the shares of common stock you hold in such company. When completing the phone or Internet processes |
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| or the proxy card, you may specify whether your shares of Slack common stock should be voted for or against, or abstain from voting on, all, some or none of the specific items of business to come before the Slack special meeting. |
| Q: | How will my shares of common stock be voted if I return a blank proxy? |
| A: | If you sign, date and return your proxy and do not indicate how you want your shares of Slack common stock to be voted, then your shares of Slack common stock will be voted “FOR” the approval of the merger proposal and “FOR” the approval of the non-binding compensation advisory proposal. |
| Q: | Can I change my vote after I have submitted my proxy? |
| A: | Yes. If you are a stockholder of record, you can change your vote or revoke your proxy by: |
notifying Slack’s Corporate Secretary, in writing, at Slack Technologies, Inc., 500 Howard Street, San Francisco, California 94105. Such notice must be received at the above location before 11:59 p.m. Eastern Time on , 2021; voting again using the telephone or Internet before 11:59 p.m. Eastern Time on , 2021 (your latest telephone or Internet proxy is the one that will be counted); or attending and voting during the Slack special meeting. Simply logging into the Slack special meeting will not, by itself, revoke your proxy. In light of shelter-in-place restrictions currently in place due to the recent coronavirus (which we refer to as “COVID-19”) pandemic, we encourage stockholders to change their vote by voting again using the telephone or Internet. If you are a street name stockholder, you may revoke any prior voting instructions by contacting your broker, bank or other nominee or by attending the Slack special meeting and voting by Internet during the meeting by using the 16-digit control number, which is in the instructions accompanying your proxy materials, if your broker, bank, or nominee makes those instructions available. | Q: | Where can I find the voting results of the special meeting? |
| A: | Within four business days following certification of the final voting results, Slack intends to file the final voting results of its special meeting with the SEC in a Current Report on Form S-4,8-K. |
| Q: | If I do not favor the merger as a Slack stockholder, what are my rights? |
| A: | Pursuant to Section 262 of which this document is a part, having becomethe DGCL, holders of Slack common stock who hold their shares through the first effective time, do not vote their shares in favor of adoption of the merger agreement and who comply fully with and properly demand appraisal for their shares under the applicable requirements of Section 262 of the DGCL and do not otherwise withdraw or lose the right to appraisal under Delaware law, have the right to seek appraisal of the fair value of their shares of Slack common stock, as determined by the Delaware Court of Chancery, if the first merger is completed. The “fair value” of shares of Slack common stock as determined by the Delaware Court of Chancery may be more than, less than, or equal to the value of the merger consideration that Slack stockholders would otherwise be entitled to receive under the terms of the merger agreement. Slack stockholders also should be aware that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the first merger, is not an opinion as to, and does not otherwise address, “fair value” under Section 262 of the DGCL. Holders of Slack common stock who wish to preserve any appraisal rights they may have, must so advise Slack by submitting a written demand for appraisal prior to the vote to adopt the merger agreement and approve the transactions contemplated thereby, and must otherwise follow fully the procedures prescribed by Section 262 of the DGCL. |
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| Q: | Are there any risks that I should consider as a Slack stockholder in deciding how to vote? |
| A: | Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors.” You also should read and carefully consider the risk factors of Salesforce and Slack contained in the documents that are incorporated by reference in this proxy statement/prospectus. |
| Q: | What happens if I sell my shares before the special meeting? |
| A: | The record date for Slack stockholders entitled to vote at the Slack special meeting is earlier than the date of the Slack special meeting. If you transfer your shares of Slack common stock after the record date but before the Slack special meeting, you will, unless special arrangements are made, retain your right to vote at the Slack special meeting but will have transferred the right to receive the merger consideration to the person to whom you transferred your shares of Slack common stock. |
| Q: | What are the material U.S. Securities Actfederal income tax consequences of 1933,the merger to Slack stockholders? |
| A: | The mergers, taken together, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (which we refer to as the “Securities Act”“Code”),. It is a condition to the completion of the mergers that each of Salesforce and not beingSlack receives an opinion from its respective counsel, dated as of the subjectclosing date, to the effect that the mergers, taken together, will qualify as a “reorganization” within the meaning of any stop order or proceeding seekingSection 368(a) of the Code. In addition, in connection with the filing of the registration statement of which this proxy statement/prospectus is a stop order; |
| • | | No Legal Prohibition—No governmental entitypart, each of competent jurisdiction having (i) enacted, issued or promulgated any law on or after June 9, 2019 (and there not having been any change on or after June 9, 2019Wachtell, Lipton, Rosen & Katz and Latham & Watkins LLP has delivered an opinion to Salesforce and Slack, respectively, to the same effect as the opinions described in the manner in which any governmental entity enforces or interprets any law enacted, issued or promulgated prior to June 9, 2019) that is in effect as of immediately prior to the expirationpreceding sentence. Each of the offerforegoing opinions of counsel is or (ii) issued or granted any order or injunctions (whether temporary, preliminary or permanent) that is in effect aswill be based on, among other things, certain factual representations made by Salesforce and Slack and certain assumptions, all of immediately prior towhich must be consistent with the expiration of the offer, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the offer or the merger;
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| • | | Listing of Salesforce Shares—The Salesforce shares to be issued in the offer and the merger having been approved for listing on the NYSE, subject to official notice of issuance;
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| • | | No Tableau Material Adverse Effect—There not having occurred any change, effect, development, circumstance, condition, state of facts event or occurrence sinceexisting at the datetime of the merger agreement that, individuallymergers. If any of these representations and assumptions are, or inbecome, inaccurate or incomplete, such opinions may be invalid, and the aggregate, has had or would reasonablyconclusions reached therein could be expected to have a material adverse effectjeopardized. An opinion of counsel represents counsel’s best legal judgment and is not binding on the financial condition, businessInternal Revenue Service (which we refer to as the “IRS”) or operations of Tableau and its subsidiaries, taken as a whole (withthe courts, which may not agree with the conclusions set forth in such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”), and that is continuing as of immediately prior to the expiration of the offer;opinion.
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| • | | Accuracy of Tableau’s Representations and Warranties—The representations and warranties of Tableau contained in the merger agreement being true and correct as of the expiration date of the offer, subject to specified materiality standards; and
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| • | | Tableau’s Compliance with Covenants—Tableau having performed or complied in all material respects with the covenants and agreements required to be performed or complied with by it under the merger agreement prior to the expiration of the offer.
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The offer is subject to certain other conditions set forth below in the section entitled “The Offer—Conditions of the Offer.” The conditions to the offer are for the sole benefit of Salesforce and the Offeror and may be asserted by Salesforce or the Offeror regardless of the circumstances giving rise to any such condition, or may be waived by Salesforce or the Offeror, by express and specific action to that effect, in whole or in part at any time and from time to time, in each case, prior to the expiration of the offer. However, certain specified conditions (including all of the conditions noted above other than the conditions related to a material adverse effect of Tableau, accuracy of Tableau’s representations and Tableau’s compliance with covenants) may not be waived by Salesforce or the Offeror without the consent of Tableau (which may be granted or withheld in its sole discretion). There is no financing condition to the offer.
How long will it take to complete the proposed transaction?
The transaction is expected to be completed during Salesforce’s fiscal third quarter ending October 31, 2019, subject to the satisfaction or waiver of the conditions described in “The Offer—Conditions of the Offer” and “Merger Agreement—Conditions of the Merger.”
How long do I have to decide whether to tender my Tableau shares in the offer?
The offer is scheduled to expire at midnight, Eastern Time, at the end of July 31, 2019, unless extended or terminated in accordance with the merger agreement. Any extension, delay, termination, waiver or amendment of the offer will be followed as promptly as practicable by public announcement thereof to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. During any such extension, all Tableau shares previously tendered and not validly withdrawn will remain subject to the offer, subject to the rights of a tendering stockholder to withdraw such stockholder’s shares. “Expiration date” means midnight, Eastern Time, at the end of July 31, 2019, unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term “expiration date” means the latest time and date at which the offer, as so extended by the Offeror, will expire.
Under the merger agreement, unless Tableau consents otherwise (which may be granted or withheld in its sole discretion) or the merger agreement is terminated:
the Offeror must extend the offer for any period required by any law, or by any rule, regulation, interpretation or position of the SEC or its staff or the NYSE applicable to the offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or to the offer documents or the registration statement on Form S-4 of which this document is a part;
in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided that such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived in accordance with the merger agreement as of any then-scheduled expiration of the offer, the Offeror must extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and
if, as of any then-scheduled expiration of the offer, each condition to the offer (other than the minimum tender condition, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived in accordance with the merger agreement and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau must, extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or have been tendered but validly withdrawn, in the offer as of such time, and (y) as of such time the founders whose untendered shares are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares into the offer; or (ii) for more than 20 business days in the aggregate.
The Offeror is not required to extend the offer beyond October 9, 2019 (subject to extension to January 9, 2020 in certain circumstances described under “Merger Agreement—Termination of the Merger Agreement”), which we refer to as the “outside date.”
Upon the terms and subject to the satisfaction or waiver of the conditions of the offer (including, if the offer is extended or amended, the terms and conditions of any extension or amendment), promptly after the expiration of the offer, the Offeror will accept for payment, and will pay for, all Tableau shares validly tendered and not validly withdrawn prior to the expiration of the offer.
Any decision to extend the offer will be made public by an announcement regarding such extension as described under “The Offer—Extension, Termination and Amendment of the Offer.”
How do I tender my Tableau shares?
All Tableau shares are held in electronic book entry form.
To validly tender Tableau shares held of record, Tableau stockholders must deliver a properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents for tendered Tableau shares to American Stock Transfer and Trust Company, LLC, the depositary and exchange agent (which we refer to as the “exchange agent”) for the offer and the merger, not later than the expiration date. The letter of transmittal is enclosed with this document.
If your shares of Tableau Class A common stock are held in “street name” (i.e., through a broker, dealer, commercial bank, trust company or other nominee), these shares of Tableau Class A common stock may be tendered by your nominee by book-entry transfer through The Depository Trust Company. To validly tender such shares held in street name, Tableau stockholders should instruct such nominee to do so prior to the expiration of the offer. No shares of Tableau Class B common stock are held in “street name.”
We are not providing for guaranteed delivery procedures and therefore you must allow sufficient time for the necessary tender procedures to be completed during normal business hours of The Depository Trust Company prior to the expiration date. Tenders received by the exchange agent after the expiration date will be disregarded and of no effect. In all cases, you will receive your consideration for your tendered Tableau shares only after timely receipt by the exchange agent of either a confirmation of a book-entry transfer of such shares if your shares are held in “street name” or a properly completed and duly executed letter of transmittal if your shares are held of record, in each case, together with any other required documents.
For a complete discussion of the procedures for tendering your Tableau shares, see “The Offer—Procedure for Tendering.”
Until what time can I withdraw tendered Tableau shares?
You may withdraw your previously tendered Tableau shares at any time before the offer has expired and, if the Offeror has not accepted your Tableau shares for payment by September 1, 2019, you may withdraw them at any time on or after that date until the Offeror accepts shares for payment. If you validly withdraw your previously tendered Tableau shares, you will receive shares of the same class of Tableau common stock that you tendered. Once the Offeror accepts your tendered Tableau shares for payment upon or after expiration of the offer, however, you will no longer be able to withdraw them. For a complete discussion of the procedures for withdrawing your Tableau shares, see “The Offer—Withdrawal Rights.”
How do I withdraw previously tendered Tableau shares?
To withdraw previously tendered Tableau shares, you must deliver a written notice of withdrawal with the required information to the exchange agent at any time at which you have the right to withdraw shares. If you tendered Tableau shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct such broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your Tableau shares and such broker, dealer, commercial bank, trust company or other nominee must effectively withdraw such Tableau shares at any time at which you have the right to withdraw shares. If you validly withdraw your previously tendered Tableau shares, you will receive shares of the same class of Tableau common stock that you tendered. For a discussion of the procedures for withdrawing your Tableau shares, including the applicable deadlines for effecting withdrawals, see “The Offer—Withdrawal Rights.”
When and how will I receive the transaction consideration in exchange for my tendered Tableau shares?
The Offeror will exchange all validly tendered and not validly withdrawn Tableau shares promptly after the expiration date of the offer, subject to the terms thereof and the satisfaction or waiver of the conditions to the offer, as set forth in “The Offer—Conditions of the Offer.” The Offeror will deliver the transaction consideration for your validly tendered and not validly withdrawn shares through the exchange agent, which will act as your agent for the purpose of receiving the transaction consideration from the Offeror and transmitting such consideration to you. In all cases, you will receive your transaction consideration for your tendered Tableau shares only after timely receipt by the exchange agent of either a confirmation of a book-entry transfer of such shares (as described in “The Offer—Procedure for Tendering”) or a properly completed and duly executed letter of transmittal, in each case, together with any other required documents.
Why does the cover page to this document state that this offer is preliminary and subject to change, andAssuming that the registration statement filed with the SEC is not yet effective? Does this mean that the offer has not commenced?
No. Completion of this document and effectiveness of the registration statement are not necessary to commence this offer. The offer was commenced on the date of the initial filing of the registration statement on Form S-4 of which this document is a part. Salesforce and the Offeror cannot, however, accept for exchange any Tableau shares tendered in the offer or exchange any shares until the registration statement is declared effective by the SEC and the other conditions to the offer have been satisfied or waived (subject to the terms and conditions of the merger agreement).
What happens if I do not tender my Tableau shares?
If, after consummation of the offer, Salesforce and the Offeror own a majority of the aggregate voting power of the outstanding Tableau shares (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), Salesforce will (subject to the satisfaction or waiver of the conditions set forth in the merger agreement) promptly complete the merger after the consummation of the offer.
Upon consummation of the merger, each Tableau share that has not been tendered and accepted for exchange in the offer, other than Tableau shares owned by Tableau, Salesforce, the Offeror or any wholly owned subsidiary of Salesforce or Tableau, will be converted in the merger into the right to receive the transaction consideration. See “Merger Agreement—Exchange of Tableau Book-Entry Shares for the Transaction Consideration.”
Does Salesforce have the financial resources to complete the offer and the merger?
Yes. The transaction consideration will consist of Salesforce shares. The offer and the merger are not conditioned upon any financing arrangements or contingencies.
If the offer is completed, will Tableau continue as a public company?
No. Salesforce is required, on the terms and subject to the satisfaction or waiver of the conditions set forth in the merger agreement, to consummate the merger promptly following the acceptance of Tableau shares in the offer. If the merger takes place, Tableau will no longer be publicly traded. Even if for some reason the merger does not take place, if Salesforce and the Offeror purchase all Tableau shares validly tendered and not validly withdrawn, there may be so few remaining stockholders and publicly held shares that Tableau shares will no longer be eligible to be traded through the NYSE or other securities exchanges, there may not be an active public trading market for Tableau shares and Tableau may no longer be required to make filings with the SEC or otherwise comply with the SEC rules relating to publicly held companies.
Will the offer be followed by a merger if all Tableau shares are not tendered in the offer?
Yes, unless the conditions to the merger are not satisfied or waived in accordance with the merger agreement. If the Offeror accepts for payment all Tableau shares validly tendered and not validly withdrawn pursuant to the offer, and the other conditions to the merger are satisfied or waived in accordance with the merger agreement, the merger will take place promptly thereafter. If the merger takes place, Salesforce will own 100% of the equity of Tableau, and all of the remaining Tableau stockholders, other than Tableau, Salesforce, the Offeror or any wholly owned subsidiary of Salesforce or Tableau, will have the right to receive the transaction consideration.
Because the merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the merger in the event that the offer is consummated. Salesforce is required, on the terms and subject to the satisfaction or waiver of the conditions set forth in the merger agreement, to consummate the merger as promptly as practicable following the consummation of the offer. As such, Salesforce does not expect there to be a significant period of time between the consummation of the offer and the consummation of the merger.
Do the officers and directors of Tableau have interests in the offer and the merger that are different from those of stockholders generally?
You should be aware that some of the officers and directors of Tableau may be deemed to have interests in the offer and the merger that are different from, or in addition to, your interests as a Tableau stockholder. These interests may include, among others, agreements that certain officers have entered into with Tableau that provide for the acceleration of stock options and restricted stock units in the event the officer experiences a qualifying termination of employment within a specified period following a change of control of Tableau, payments of severance benefits under Tableau’s change in control severance agreements with executive officers, agreements that certain executive officers have entered into with Salesforce that provide for grants of Salesforce equity awards following the effective time and certain indemnification obligations. See “The Offer—Interests of Certain Persons in the Offer and the Merger” and “Merger Agreement—Employee Matters” below for more information.
As of June 24, 2019, the directors and executive officers of Tableau and their affiliates beneficially owned approximately 10,500,460 Tableau shares, representing approximately 12.0% of the Tableau shares outstanding as of June 24, 2019.
Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, entered into a letter agreement with Salesforce and the Offeror, solely in their capacities as stockholders of Tableau, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock, which in the aggregate represent approximately 11.8% of the outstanding shares of Tableau common stock, prior to the expiration of the offer. For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and such letter agreement, which is filed as Exhibit 10.25 to this document.
See also “Item 3—Past Contacts, Transactions, Negotiations and Agreements” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.
What are the material U.S. federal income tax consequences of receiving Salesforce stock in exchange for my Tableau shares in the offer or the merger?
Each of Tableau and Salesforce intends the offer and the merger, taken together, to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). However, completion of the offer and the merger is not conditioned upon receipt of an opinion from counsel that the offer and the merger qualify as a reorganization, and the offer and the merger will occur even if they do not so qualify.
In general and subject to the qualifications and limitations set forth in the section titled “Material U.S. Federal Income Tax Consequences,” if the offer and the merger,mergers, taken together, qualify as a reorganization“reorganization” within the meaning of Section 368(a) of the Code, stockholders of Tableau are not expected to recognize any gain or loss fora U.S. federal income tax purposes onHolder (as defined under the exchange of shares of Tableau common stock for shares of Salesforce common stock in the offer or merger, except with respect to any cash received in lieu of fractional shares of Salesforce common stock.
Each Tableau stockholder should read the discussion under “Materialsection entitled “Material U.S. Federal Income Tax Consequences” for a more complete discussionConsequences of the U.S. federal income tax consequencesMergers”) will generally recognize gain (but not loss) in an amount equal to the lesser of: (1) the sum of the offer and the merger (including the U.S. federal income tax consequencesamount of the receipt ofcash consideration (other than cash in lieu of a fractional share of Salesforce common stock) and the fair market value of the Salesforce common stock received, minus such holder’s adjusted tax basis in its shares of Slack common stock surrendered, and (2) the amount of cash consideration received. (other than cash in lieu of a fractional share of Salesforce common stock). For additional information, please read the section entitled “Material U.S. Federal Income Tax matters can be complicated,Consequences of the Mergers.”
The tax consequences to you of the mergers will depend on your particular facts and circumstances. Please consult your tax advisor as to the tax consequences of the offermergers in your particular circumstances, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. | Q: | When are the mergers expected to be completed? |
| A: | Salesforce and Slack are working to complete the mergers as quickly as possible. Subject to the satisfaction or waiver of the conditions described in the section entitled “The Merger Agreement—Conditions to the Completion of the Mergers,” including the approval of the merger proposal by Slack stockholders at the Slack special meeting, the transaction is expected to close in the second quarter of Salesforce’s fiscal year 2022. However, neither Salesforce nor Slack can predict the actual date on which the mergers will be completed, nor can the parties assure you that the mergers will be completed, because completion is subject |
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| to conditions beyond either company’s control. In addition, if the mergers are not completed by August 1, 2021, subject to two three-month extensions in order to obtain required regulatory approvals, either Salesforce or Slack may choose not to proceed with the mergers by terminating the merger agreement. |
| Q: | If I am a Slack stockholder, how will I receive the merger consideration to which I am entitled? |
| A: | If you are a holder of book-entry shares representing eligible shares of Slack common stock (which we refer to as “Slack book-entry shares”) which are held through the Depository Trust Company (which we refer to as “DTC”), the exchange agent will transmit to DTC or its nominees as soon as reasonably practicable on or after the closing date, the merger consideration, cash in lieu of any fractional shares of Salesforce common stock and any dividends and other distributions on the shares of Salesforce common stock issuable as merger consideration, in each case, for such Slack book-entry shares held through DTC. |
If you are a holder of record of Slack book-entry shares which are not held through DTC, the exchange agent will deliver to you, as soon as practicable after the first effective time, (i) a notice advising you of the effectiveness of the first merger, (ii) a statement reflecting the aggregate whole number of shares of Salesforce common stock (which will be in uncertificated book-entry form) that you have a right to receive pursuant to the merger agreement and (iii) a check in the amount equal to a particular Tableau stockholder will depend on such stockholder’s particular facts and circumstances. Tableau stockholders should consult their own tax advisors to determine the specific consequences to themcash payable in lieu of exchanging theirany fractional shares of TableauSalesforce common stock and dividends and other distributions on the shares of Salesforce common stock issuable to you as merger consideration. No interest will be paid or accrued on any amount payable for shares of Slack common stock eligible to receive the merger consideration pursuant to the merger agreement. For additional information on the exchange of Slack common stock for the transactionmerger consideration, pursuant to the offer or the merger. Will I have the right to have my Tableau shares appraised?
Appraisal rights are not available in connection with the offer or the merger. See “The Offer—No Appraisal Rights.”
Whom should I call if I have questions about the offer?
You may call Morrow Sodali LLC, the information agent, toll free at (800) 662-5200 or contact the information agent via e-mail at DATA@morrowsodali.com.
Where can I find more information about Salesforce and Tableau?
You can find more information about Salesforce and Tableau from various sources described insee the section entitled “The Merger Agreement—Payment for Securities; Exchange.”
| Q: | If I am a holder of Slack common stock, will the shares of Salesforce common stock issued in the first merger receive a dividend? |
| A: | After the completion of the first merger, the shares of Salesforce common stock issued in connection with the first merger will carry with them the right to receive the same dividends on shares of Salesforce common stock as all other holders of shares of Salesforce common stock, for any dividend the record date for which occurs after the mergers are completed. |
Salesforce has never paid any cash dividends on its common stock. Salesforce’s board of this document entitled “Wheredirectors currently intends to Obtain More Information.retain any future earnings to support operations and to finance the growth and development of its business and does not intend to pay cash dividends on its common stock for the foreseeable future. Any future determination related to its dividend policy will be made at the discretion of Salesforce’s board. | Q: | Who will solicit and pay the cost of soliciting proxies? |
| A: | Slack has retained MacKenzie Partners, Inc. (which we refer to as “MacKenzie Partners”) to assist in the solicitation process. Slack will pay MacKenzie Partners a fee of approximately $20,000, as well as reasonable and customary documented expenses. Slack also has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). |
| Q: | What is “householding”? |
| A: | Slack has adopted a procedure called “householding,” which the SEC has approved. Under this procedure, Slack delivers a single copy of the Notice and proxy materials to multiple stockholders who share the same address, unless Slack has received contrary instructions from one or more of such stockholders. This procedure reduces printing costs, mailing costs and fees. Stockholders who participate in householding will |
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| continue to be able to access and receive separate proxy cards. Upon written or oral request, Slack will deliver promptly a separate copy of the Notice and proxy materials to any stockholder at a shared address to which Slack delivered a single copy of any of these materials. Street name stockholders may contact their broker, bank, or other nominee to request information about householding. |
| A: | You should read this proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card by mail in the enclosed postage-paid envelope or submit your voting instructions by phone or the Internet as soon as possible so that your shares of Slack common stock will be voted in accordance with your instructions. |
| Q: | Who can answer my questions about the Slack special meeting or the transactions contemplated by the merger agreement? |
| A: | If you have questions about the Slack special meeting or the information contained in this proxy statement/prospectus, or desire additional copies of this proxy statement/prospectus or additional proxies, contact Slack’s proxy solicitor: |
MacKenzie Partners, Inc. 1407 Broadway, 27th Floor New York, New York 10018 (800) 322-2885 Banks and Brokers: (212) 929-5500 Email: proxy@mackenziepartners.com | Q: | Where can I find more information about Salesforce, Slack and the mergers? |
| A: | You can find out more information about Salesforce, Slack and the mergers by reading this proxy statement/prospectus and, with respect to Salesforce and Slack, from various sources described in the section entitled “Where You Can Find More Information.” |
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SUMMARY This section summarizes materialsummary highlights selected information presented in greater detail elsewhereincluded in this document. However, this summaryproxy statement/prospectus and does not contain all of the information that may be important to Tableau stockholders.you. You are urged toshould read this proxy statement/prospectus and its annexes carefully read the remainder of this document and the related letter of transmittal, the annexes to this documentin its entirety and the other informationdocuments referred to orin this proxy statement/prospectus before you decide how to vote with respect to the proposals to be considered and voted on at the Slack special meeting. In addition, Salesforce and Slack incorporate by reference important business and financial information about Salesforce and Slack into this proxy statement/prospectus, as further described in the section entitled “Where You Can Find More Information.” You may obtain the information incorporated by reference into this proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information.” Each item in this document because the informationsummary includes a page reference directing you to a more complete description of that item in this section and in the “Questions and Answersproxy statement/prospectus. Information About the Offer and the Merger” section is not complete. See “Where to Obtain More Information.” The Offer and Transaction Consideration (Page 37)
Salesforce, through its indirect wholly owned subsidiary, the Offeror, is offering, upon the terms and subject to the conditions set forth in this document and in the accompanying letter of transmittal, to exchange for each outstanding share of Tableau Class A common stock and Tableau Class B common stock validly tendered and not validly withdrawn in the offer, 1.103 shares of Salesforce common stock, together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.
We refer to the above as the “transaction consideration.”
Tableau stockholders will not receive any fractional shares of Salesforce common stock in the offer or the merger, and each Tableau stockholder that otherwise would be entitled to receive a fraction of a share of Salesforce common stock pursuant to the offer or the merger will be paid an amount in cash (without interest) equal to such fractional part of a share of Salesforce common stock, multiplied by the volume weighted average closing sale price of one share of Salesforce common stock as reported on the NYSE for the 10 consecutive trading days ending on and including the trading day immediately preceding the acceptance of tendered Tableau shares in the offer, rounded to the nearest whole cent. See “Merger Agreement—Fractional Shares.”
Purpose of the Offer and the Merger (Page 65)
The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares, and the merger is the second step in such plan. If the offer is completed, tendered Tableau shares will be exchanged for the transaction consideration, and if the merger is completed, any remaining Tableau shares that were not tendered into the offer (other than certain converted or cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer.
Upon the consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former Tableau stockholders will no longer have any direct ownership interest in such entity.
Salesforce expects to consummate the merger promptly after the consummation of the offer in accordance with Section 251(h) of the DGCL, and no stockholder vote to adopt the merger agreement or any other action by the Tableau stockholders will be required in connection with the merger. See “The Offer—Purpose of the Offer and the Merger.”
Letter Agreement (Page 107)
Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, entered into a letter agreement with Salesforce and the Offeror
(which we refer to as the “letter agreement”). Subject to the terms and conditions of the letter agreement, they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock prior to the expiration of the offer, subject to certain terms and conditions.
The letter agreement terminates upon certain events, including the termination of the merger agreement in accordance with its terms.
The Tableau shares subject to the letter agreement represent approximately 11.8% of the outstanding shares of Tableau common stock as of June 24, 2019. The co-founders have also conveyed to both Salesforce and Tableau that they intend to tender into the offer.
For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and the letter agreement, which is filed as Exhibit 10.25 to this document.
The Companies (Page 36) (page 46)
Salesforce salesforce.com, inc. Salesforce Tower 415 Mission Street, 3rd Floor San Francisco, California 94105 Phone: (415) 901-7000 Salesforce, a Delaware corporation, is a global leader in customer relationship management, or CRM, technology that brings companies and customers together. Founded in 1999, Salesforce enables companies to improve their relationships and interactions with customers. Salesforce introduced its first CRM solution in 2000, and has since expanded its service offerings into new areas and industries with new editions, features and platform capabilities. Salesforce’s core mission is to empower its customers of every size and industry to connect with their customers in new ways through existing and emerging technologies, including cloud, mobile, social, Internet of Thingsblockchain, voice and artificial intelligence.intelligence, to transform their businesses. Salesforce’s Customer Success Platform—including360 is an integrated platform that unites sales, force automation, customer service, marketing, commerce, integration, analytics and support, marketing automation, digital commerce, community management, industry-specific solutions, analytics, integration solutions, application development, Internetmore to give companies a single source of Things integration, collaborative productivitytruth about their customers. Salesforce’s service offerings are designed to be intuitive and easy to use. They can generally be deployed quickly, configured easily and integrated with other platforms and enterprise applications. Salesforce sells to businesses worldwide primarily on a subscription basis, through direct sales efforts and also indirectly through partners. Through Salesforce’s platform and other developer tools, its AppExchange,Salesforce also enables third parties to develop additional functionality and new applications, or apps that run on Salesforce’s platform, which are sold separately from— or in conjunction with—Salesforce’s service offerings. Salesforce common stock is its enterprise cloud marketplace, and its professional cloud services—providestraded on the tools customers needNew York Stock Exchange (which we refer to succeed in a digital world.as the “NYSE”) under the ticker symbol “CRM.” The OfferorMerger Sub I
Sausalito Acquisition Corp.Skyline Strategies I Inc.
c/o salesforce.com, inc. Salesforce Tower 415 Mission Street, 3rdFloor San Francisco, California 94105 The Offeror,Phone: (415) 901-7000
Merger Sub I, a Delaware corporation, is an indirecta wholly owned subsidiary of Salesforce. The OfferorMerger Sub I is newly formed, and was organized for the purpose of makingentering into the offermerger agreement and consummatingeffecting the first merger. The OfferorMerger Sub I has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the offer and the merger. The Offeror’s address is c/o salesforce.com, inc., Salesforce Tower, 415 Mission Street, 3rd Floor, San Francisco, California 94105.mergers. -12-
TableauMerger Sub II
Tableau Software,Skyline Strategies II LLC
c/o salesforce.com, inc. Salesforce Tower 415 Mission Street, 3rd Floor San Francisco, California 94105 Phone: (415) 901-7000 Merger Sub II, a Delaware limited liability corporation, is a wholly owned subsidiary of Salesforce. Merger Sub II is newly formed, and was organized for the purpose of entering into the merger agreement and effecting the second merger. Merger Sub II has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the mergers. Slack Slack Technologies, Inc. 1621 North 34th500 Howard Street
Seattle, Washington 98103San Francisco, California 94105
(206) 633-3400Phone: (415) 630-7943
Tableau,Slack, whose legal name is Slack Technologies, Inc., has transformed business communication. It’s the leading channel-based messaging platform, used by millions to align their teams, unify their systems, and drive their businesses forward. Only Slack offers a secure, enterprise-grade environment that can scale with the largest companies in the world. It is a new layer of the business technology stack where people can work together more effectively, connect all their other software tools and services, and find the information they need to do their best work. Slack is where work happens. Slack was originally incorporated in Delaware in 2009 as Tiny Speck, Inc. In 2014, the company changed its name to Slack Technologies, Inc. and publicly launched its current offering. Slack is headquartered in San Francisco, California.
The Mergers and the Merger Agreement (page 99) The terms and conditions of the mergers are contained in the merger agreement, which is attached to this document as Annex A and is incorporated by reference herein in its entirety. Salesforce and Slack encourage you to read the merger agreement carefully and in its entirety, as it is the legal document that governs the mergers. Pursuant to the terms and subject to the conditions included in the merger agreement, Salesforce has agreed to acquire Slack. The Slack board has unanimously approved the merger agreement and the transactions contemplated by the merger agreement. The merger agreement provides for two mergers: (a) Merger Sub I will be merged with and into Slack, with Slack continuing as the surviving corporation putsin the powerfirst merger and as a wholly owned subsidiary of dataSalesforce (we refer to Slack after completion of the first merger as the “surviving corporation”) and (b) immediately following the first merger, Slack, as the surviving corporation in the first merger, will be merged with and into either: (i) if a revised structure notice (as defined below) has not been delivered by Salesforce before the closing, Merger Sub II, with Merger Sub II continuing as a wholly owned subsidiary of Salesforce, or (ii) if a revised structure notice has been delivered by Salesforce before the closing, Salesforce, with Salesforce surviving the second merger (we refer to Merger Sub II or Salesforce, as applicable, after completion of the second merger, as the “surviving company”). -13-
Pursuant to the merger agreement, Salesforce may elect the alternative transaction structure (as defined below) upon written notice to Slack (which we refer to as a “revised structure notice”) in the event that 10 business days before the closing, Salesforce and the trustee under that certain Indenture, dated as of April 9, 2020, between Slack and U.S. Bank National Association, as trustee (which we refer to as the “convertible notes indenture”) have not each executed a supplemental indenture to the convertible notes indenture amending the terms thereof to permit the consummation of the second merger with Merger Sub II at the second effective time (as defined in the section entitled “The Merger Agreement—Completion and Effectiveness of the Mergers” without giving rise to a breach of, or any default under, any provision of the convertible notes indenture. Upon delivery of the revised structure notice, the structure of the second merger will be modified to consist of Slack, as the surviving corporation in the first merger, merging with and into Salesforce, with Salesforce continuing as the surviving company (which we refer to as the “alternative transaction structure”). Merger Consideration (page 100) As a result of the first merger, each eligible share of Slack Class A common stock and each share of Slack Class B common stock issued and outstanding immediately prior to the first effective time will be automatically cancelled and converted into the handsright to receive (a) 0.0776 shares of everyday peopleSalesforce common stock, with cash in lieu of any fractional shares of Salesforce common stock, and (b) $26.79 in cash, without interest). Salesforce will not issue fractional shares of Salesforce common stock in the first merger. Instead, each holder of Slack common stock who otherwise would be entitled to receive fractional shares of Salesforce common stock (after aggregating all shares of such holder) will be entitled to receive, in lieu of fraction shares, an amount in cash, without interest, equal to such fraction of a share of Salesforce common stock to which such holder would otherwise be entitled multiplied by $260.50, rounded to the nearest whole cent. Risk Factors (page 33) The mergers and an investment in Salesforce common stock involve risks, some of which are related to the transactions contemplated by the merger agreement. You should carefully consider the information about these risks set forth under the section entitled “Risk Factors,” together with the other information included or incorporated by reference in this proxy statement/prospectus, particularly the risk factors contained in Salesforce’s and Slack’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Slack stockholders should carefully consider the risks set out in that section before deciding how to vote with respect to the merger proposal and non-binding compensation advisory proposal to be considered and voted on at the Slack special meeting. For additional information, see the section entitled “Where You Can Find More Information.” Treatment of Slack Equity Awards (pages 94 and 101) At the first effective time: each outstanding and unexercised Slack option held by any individual who is not an employee of Slack or any of its software products, allowingsubsidiaries immediately before the first effective time will be cancelled and converted into the right to receive the merger consideration in respect of the number of shares of Slack common stock covered by the Slack option, less a broad populationnumber of business usersshares having a value equal to engage with their data, ask questions, solve problemsthe total exercise price applicable to such option; each outstanding and create value. Based on innovative core technologies originally developed at Stanford University, Tableau’s products reduceunexercised Slack option held by an individual who is an employee of Slack or any of its subsidiaries immediately before the complexity, inflexibilityfirst effective time will be assumed and expense associated with traditional business intelligence applications. Tableau currently offers five key products: Tableau Desktop,automatically converted into an adjusted option; -14-
each outstanding Slack RSU award and each Slack restricted share award that is held by a self-service, powerful analytics product for anyone with data; Tableau Server, a business intelligence platform for organizations; Tableau Online, a hosted software-as-a-service (“SaaS”) versionnon-employee director of Tableau Server; Tableau Prep, a data preparation product for combining, shapingSlack will vest as of the first effective time and cleaning data;will be cancelled and Tableau Public, a free cloud-based platform for analyzing and sharing public data.converted into the right to receive the merger consideration in respect of each share of Slack common stock subject to such Slack RSU award or Slack restricted share award; Salesforce’s
| • | | each Slack RSU award (other than any such award held by any current or former non-employee director) will be assumed and converted into an adjusted RSU award (as defined in the section entitled “The Merger Agreement—Treatment of Slack Equity Awards—Consideration for Slack Restricted Stock Units and Restricted Share Awards”); and |
| • | | each Slack restricted share award (other than any Slack restricted share award held by any current or former non-employee director of Slack) that is outstanding immediately prior to the first effective time will be assumed and converted into an adjusted restricted share award (as defined in the section entitled “The Merger Agreement—Treatment of Slack Equity Awards—Consideration for Slack Restricted Stock Units and Restricted Share Awards”). |
Salesforce’s Reasons for the Offer and the Merger (Page 46)Mergers (page 88) The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The Offeror is making the offer and Salesforce plans to complete the merger because it believes that the acquisition of TableauSlack by Salesforce will provide significant long-term growth prospects and increased stockholder value for the combined company, including as a result of the substantial anticipated synergies resulting from the acquisition.
Recommendation of the Slack Board and Reasons for the Mergers (page 63) The Slack board unanimously recommends that you vote “FOR” the merger proposal and “FOR” the non-binding compensation advisory proposal. For the factors considered by the Slack board in reaching this decision and additional information on the recommendation of the Slack board, see the section entitled “The Mergers—Recommendation of the Slack Board and Reasons for the Mergers.” Opinions of Slack Financial Advisors (pages 70 and 77) Opinion of Tableau’sQatalyst Partners LP, Slack’s Financial Advisor (Page 52) Tableau has retainedSlack engaged Qatalyst Partners LP (which we refer to as “Qatalyst Partners”) to provide financial advice in connection with the proposed mergers based on Qatalyst Partners’ qualifications, expertise, reputation and knowledge of our business and the industry in which we operate. At the meeting of Slack’s board on December 1, 2020, Qatalyst Partners rendered to Slack’s board its oral opinion, subsequently confirmed in writing, to the effect that, as of December 1, 2020 and based upon and subject to the various assumptions, qualifications, limitations and other matters set forth therein, the consideration of $26.79 in cash and 0.0776 shares of Salesforce common stock per share of Slack Class A common stock to be received pursuant to, and in accordance with, the terms of the merger agreement by the holders of shares of Slack Class A common stock, in their capacity as holders of Slack Class A common stock (other than Salesforce or any of its affiliates), was fair, from a financial point of view, to such holders.
The full text of the written opinion of Qatalyst Partners, dated as of December 1, 2020, is attached to this proxy statement/prospectus as Annex B and is incorporated into this proxy statement/prospectus by reference. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Qatalyst Partners in rendering its opinion. You should read the opinion carefully in its entirety. Qatalyst Partners’ opinion was provided to Slack’s board and addressed only, as of the date of the opinion, the fairness, from a financial point of view, of the consideration of $26.79 in cash and 0.0776 shares of -15-
Salesforce common stock per share of Slack Class A common stock to be received pursuant to, and in accordance with, the terms of the merger agreement by the holders of shares of Slack Class A common stock, in their capacity as such holders, to such holders. It does not address any other aspect of the mergers. It does not constitute a recommendation to any Slack stockholder as to how to vote with respect to the mergers or any other matter and does not in any manner address the price at which the shares of Slack Class A common stock will trade at any time. Qatalyst Partners expressed no opinion regarding the consideration to be received by any holder of Slack Class B common stock under the merger agreement in such holder’s capacity as a holder of Slack Class B common stock. For a description of the opinion that Slack’s board received from Qatalyst Partners, see the section captioned “The Merger—Opinion of Qatalyst Partners LP, Slack’s Financial Advisor.” Opinion of Goldman Sachs & Co. LLC, (which we refer to as “Goldman Sachs”), to act as its financial advisor in connection withSlack’s Financial Advisor At a meeting of the transactions contemplated by the merger agreement.Slack board held on December 1, 2020, Goldman Sachs delivered its opinionrendered to the TableauSlack board of directorsits oral opinion, subsequently confirmed in its written opinion dated December 1, 2020, that, as of the date of the written fairness opinion and based upon and subject to the factors and assumptions set forth therein, the transactionmerger consideration per share to be paid to the holders (other than Salesforce and its affiliates) of Tableau shares of Slack common stock, taken in the aggregate, pursuant to the merger agreement was fair from a financial point of view to such holders. The full text of the written opinion of Goldman Sachs, dated June 9, 2019,December 1, 2020, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this document and is incorporated into this document by reference. You should read the opinion carefully in its entirety. The C. Goldman Sachs provided advisory services and its opinion was provided tofor the Tableau board of directorsinformation and addresses only, asassistance of the dateSlack board in connection with its consideration of the opinion, based uponmergers and subjectother transactions contemplated by the merger agreement (which are together referred to the factors and assumptions set forth therein, the fairness from a financial point of viewin this section of the transaction consideration to be paid toproxy statement/prospectus as the Tableau stockholders (other than Salesforce and its affiliates), taken in the aggregate, pursuant to the merger agreement.“transaction”). The Goldman Sachs opinion does not constitute a recommendation as to whether or nothow any holder of Tableau shares of Slack common stock should tender such Tableau shares in connectionvote with respect to the offertransaction or any other matter.
Special Meeting of Slack Stockholders (page 48) Date, Time, Place and Purpose of the Slack Special Meeting The engagement letter between TableauSlack special meeting will be held virtually via the Internet on , 2021 at , Pacific Time. The Slack special meeting will be held solely via live webcast and Goldman Sachs provides forthere will not be a transaction fee thatphysical meeting location. Slack stockholders will be able to attend the Slack special meeting online and vote their shares electronically during the meeting by visiting the Slack special meeting website at www.virtualshareholdermeeting.com/WORK2021SM. Slack stockholders will need the 16-digit control number found on their proxy card in order to access the Slack special meeting website. The purpose of the Slack special meeting is estimated, basedto consider and vote on the information availablemerger proposal and the non-binding compensation advisory proposal. Approval of the merger proposal is a condition to the obligation of Slack and Salesforce to complete the mergers. Approval of the non-binding compensation advisory proposal is not a condition to the obligation of either Slack or Salesforce to complete the mergers. Record Date and Outstanding Shares of Slack Common Stock Only holders of record of issued and outstanding shares of either class of Slack common stock as of the close of business on , 2021, the record date for the Slack special meeting, are entitled to notice of, announcement,and to vote at, approximately $82 million,the Slack special meeting via the Slack special meeting website or any adjournment or postponement of the Slack special meeting. -16-
As of the close of business on the record date, there were shares of Slack Class A common stock and shares of Slack Class B common stock outstanding and entitled to vote at the Slack special meeting. Each share of Class A common stock is entitled to one vote on each proposal and each share of Class B common stock is entitled to 10 votes on each proposal. A complete list of Slack stockholders entitled to vote at the Slack special meeting will be available for inspection at Slack’s principal place of business during regular business hours for a period of no less than 10 days before the Slack special meeting at 500 Howard Street, San Francisco, California 94105. If Slack’s headquarters are closed for health and safety reasons related to the COVID-19 pandemic during such period, the list of Slack stockholders will be made available for inspection upon request to Slack’s corporate secretary at 500 Howard Street, San Francisco, California 94105, subject to the satisfactory verification of stockholder status. The list of Slack stockholders entitled to vote at the Slack special meeting will also be made available for inspection during the Slack special meeting via the Slack special meeting website at www.virtualshareholdermeeting.com/WORK2021SM. Quorum; Abstentions and Broker Non-Votes A quorum of Slack stockholders is necessary to hold a valid meeting. The presence at the Slack special meeting, in person (including via the Slack special meeting website) or by proxy, of the holders of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote at the Slack special meeting constitutes a quorum. Abstentions, withhold votes, and broker non-votes are counted as shares present and entitled to vote for the purposes of determining a quorum. Required Vote to Approve the Merger Proposal Approval of the merger proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” the merger proposal. Failure to vote on the merger proposal will have the same effect as a vote “AGAINST” the merger proposal. The merger proposal is described in the section entitled “Slack Proposals.” Required Vote to Approve the Non-Binding Compensation Advisory Proposal Approval of the non-binding compensation advisory proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock present via the Slack special meeting website or represented by proxy at the Slack special meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal, and broker non-votes will have no effect on the outcome of the vote. The non-binding compensation advisory proposal is described in the section entitled “Slack Proposals.” Voting by Directors and Executive Officers As of December 16, 2020, Slack directors, executive officers, and their respective affiliates, as a group, beneficially held and were entitled to vote 7,688,272 shares of Slack Class A common stock and 82,661,892 shares of Class B common stock, representing 62.8% of the voting power of Slack common stock, including the shares covered by voting agreements in favor of Stewart Butterfield. Slack currently expects that all of whichits directors and executive officers will vote their shares “FOR” the merger proposal and “FOR” the non-binding compensation advisory proposal. -17-
Adjournment If a quorum is contingent upon consummationnot present or if there are not sufficient votes for the approval of the transactions. In addition, Tableau has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities undermerger proposal, Slack expects that the federal securities laws. ExpirationSlack special meeting will be adjourned by the chairman of the Offer (Page 59)
The offer is scheduledSlack special meeting to expire at midnight, Eastern Time, at the end of July 31, 2019, unless extended or terminatedsolicit additional proxies in accordance with the merger agreement. “Expiration date” means midnight, Eastern Time,At any subsequent reconvening of the Slack special meeting, all proxies will be voted in the same manner as the manner in which such proxies would have been voted at the endoriginal convening of July 31, 2019 unless and until the Offeror has extended the period during which the offer is open, subjectSlack special meeting, except for any proxies that have been validly revoked or withdrawn prior to the termssubsequent meeting.
Interests of Slack Directors and conditionsExecutive Officers in the Mergers (page 91) In considering the recommendation of the Slack board with respect to the merger proposal and the non-binding compensation advisory proposal, Slack stockholders should be aware that the directors and executive officers of Slack have interests in the mergers that may be different from, or in addition to, the interests of Slack stockholders generally. The members of the Slack board were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement, in which event the term “expiration date” means the latest time and date at which the offer, as so extended by the Offeror, will expire. Extension, Termination and Amendment of the Offer (Page 59)
Subject to the provisions ofapproving the merger agreement and the applicable rules and regulations of the SEC, and unless Tableau consents otherwise (which may be granted or withheld in its sole discretion) ordetermining to recommend that Slack stockholders approve the merger agreement is otherwise terminated:proposal.
the Offeror must extend the offer for any period required by any law, or by any rule, regulation, interpretation or position of the SEC or its staff or the NYSE applicableConditions to the offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or to the offer documents or the registration statement on Form S-4, of which this document is a part;Mergers (page 120)
in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided that such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived in accordance with the merger agreement as of any then-scheduled expiration of the offer, the Offeror must extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and
if, as of any then-scheduled expiration of the offer each condition to the offer (other than the minimum tender condition, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived in accordance with the merger agreement and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau must, extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or have been tendered but validly withdrawn, in the offer as of such time and (y) as of such time the founders whose untendered shares are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares into the offer; or (ii) for more than 20 business days in the aggregate.
The Offeror may not terminate or withdraw the offer prior to the then-scheduled expiration of the offer unless the merger agreement is validly terminated in accordance with its terms, in which case the Offeror will terminate the offer promptly (but in no event more than one business day) after such termination. Among other circumstances, the merger agreement may be terminated by either Salesforce or Tableau if the offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Salesforce orand Slack to consummate the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer, or if the acceptance for exchange of Tableau shares tendered in the offer has not occurred on or before October 9, 2019 (subject to extension to January 9, 2020 in certain circumstances described under “Merger Agreement—Termination of the Merger Agreement”), which we refer to as the “outside date.” See “Merger Agreement—Termination of the Merger Agreement.”
The Offerormergers will effect any extension, termination, amendment or delay by giving oral or written notice to the exchange agent and by making a public announcement as promptly as practicable thereafter as described under “The Offer—Extension, Termination and Amendment of the Offer.” In the case of an extension, any such announcement will be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”), which require that any material change in the information published, sent or given to stockholders in connection with the offer be promptly disseminated to stockholders in a manner reasonably designed to inform them of such change) and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror assumes no obligation to publish, advertise or otherwise communicate any such public announcement of this type, other than by issuing (or having Salesforce issue) a press release. During any extension, Tableau shares previously tendered and not validly withdrawn will remain subject to the offer, subject to the right of each Tableau stockholder to withdraw previously tendered Tableau shares.
No subsequent offering period will be available following the expiration of the offer without the prior written consent of Tableau, other than in accordance with the extension provisions set forth in the merger agreement.
Conditions of the Offer (Page 69)
The offer is subject to certain conditions, including, among others:
satisfaction of the minimum tender condition (which requires that, prior to the expiration of the offer, there have been validly tendered and not validly withdrawn a number of Tableau shares that, upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together with Tableau shares then owned by Salesforce and the Offeror (if any), would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offer);
expiration or termination of the waiting period applicable to the transactions contemplated by the merger agreement under the HSR Act and the obtaining of any required pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany;
lack of legal prohibitions;
the effectiveness of the registration statement on Form S-4 of which this document is a part;
the listing of the Salesforce shares to be issued in the offer and the merger on the NYSE, subject to official notice of issuance;
the accuracy of Tableau’s representations and warranties made in the merger agreement, subject to specified materiality standards;
Tableau being in compliance in all material respects with its covenants under the merger agreement;
no material adverse effect (as described in “Merger Agreement—Material Adverse Effect”) having occurred with respect to Tableau since the date of the merger agreement that is continuing as of immediately prior to the expiration of the offer; and
the merger agreement not having been terminated in accordance with its terms.
The offer is subject to certain other conditions set forth in the section below entitled “The Offer—Conditions of the Offer.” Subject to applicable SEC rules and regulations, the Offeror also reserves the right prior to the
expiration of the offer, in its sole discretion, at any time or from time to time to waive any condition identified as subject to waiver in “The Offer—Conditions of the Offer” by giving oral or written notice of such waiver to the exchange agent. However, certain specified conditions (including the first five conditions and the last condition in the immediately preceding list) may only be waived by Salesforce or the Offeror with the prior written consent of Tableau (which may be granted or withheld in its sole discretion).
The offer and the merger are not conditioned upon any financing arrangements or contingencies.
Withdrawal Rights (Page 62)
Tendered Tableau shares may be withdrawn at any time prior to the expiration of the offer. Additionally, if the Offeror has not agreed to accept the shares for exchange on or prior to September 1, 2019, Tableau stockholders may thereafter withdraw their shares from the offer at any time after such date until the Offeror accepts the shares for exchange. Any Tableau stockholder that validly withdraws previously tendered Tableau shares will receive shares of the same class of Tableau common stock that were tendered. Once the Offeror accepts shares for exchange pursuant to the offer, all tenders not previously withdrawn become irrevocable.
Procedure for Tendering (Page 62)
All Tableau shares are held in electronic book entry form.
To validly tender Tableau shares held of record, Tableau stockholders must deliver a properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents to the exchange agent at its address set forth elsewhere in this document, and must follow the other procedures set forth herein, prior to the expiration of the offer.
Tableau stockholders who hold shares of Tableau Class A common stock in “street name” through a bank, broker or other nominee holder, and desire to tender their shares of Tableau Class A common stock pursuant to the offer, should instruct the nominee holder to do so prior to the expiration of the offer. No shares of Tableau Class B common stock are held in “street name.”
Exchange of Shares; Delivery of Salesforce Shares (Page 61)
Upon the terms and subject to the satisfaction or waiver of the conditionsfollowing conditions:
| • | | Slack Stockholder Approval—The approval of the first merger and the adoption of the merger agreement by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of Slack common stock (which we refer to as the “Slack stockholder approval”); |
| • | | NYSE Listing—The approval of the shares of Salesforce common stock to be issued in the first merger for listing on the NYSE, subject to official notice of issuance; |
| • | | Registration Statement—The effectiveness under the Securities Act of the registration statement of which this proxy statement/prospectus forms a part of and the absence of any stop order or proceeding seeking a stop order; |
| • | | Government Consents—(i) The expiration or termination of any waiting period (or extensions thereof) applicable to the mergers under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended (which we refer to as the “HSR Act”), and (ii) the approval, expiration, termination or receipt of, as applicable, all applicable filings, registrations, waiting periods (or extensions thereof) and approvals under certain specified antitrust and foreign investment laws; and |
| • | | No Legal Prohibition—No governmental entity of competent jurisdiction has (i) enacted, issued or promulgated any law that is in effect as of immediately prior to the first effective time or the second effective time, as applicable or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the first effective time or the second effective time, as applicable, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the mergers. |
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The obligations of Salesforce, Merger Sub I and Merger Sub II to consummate the mergers will be further subject to the satisfaction or waiver of the following conditions: | • | | Accuracy of Representations and Warranties—The accuracy of representations and warranties of Slack in the merger agreement, subject to specified materiality standards discussed in the section entitled “The Merger Agreement—Conditions to the Mergers”; |
| • | | Compliance with Covenants—Performance or compliance in all material respects by Slack of the obligations, covenants and agreements required to be performed or complied with by it at or prior to the closing; |
| • | | No Material Adverse Effect—There not having occurred any material adverse effect (as defined in the section entitled “The Merger Agreement—Material Adverse Effect”) with respect to Slack since December 1, 2020, and that is continuing as of immediately prior to the closing; |
| • | | Officer Certificate—The receipt by Salesforce of a certificate, dated as of the closing date, signed by the chief executive officer or chief financial officer of Slack, certifying that the conditions set forth in the three bullet points immediately above have been satisfied; and |
| • | | Tax Opinion—The receipt by Salesforce of a written opinion from legal counsel to Salesforce, in form and substance reasonably satisfactory to Salesforce, dated as of the closing date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income tax purposes the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. |
The obligations of Slack to consummate the mergers will be further subject to the satisfaction or waiver of the following conditions: | • | | Accuracy of Representations and Warranties—The accuracy of representations and warranties of Salesforce, Merger Sub I and Merger Sub II in the merger agreement, subject to specified materiality standards discussed in the section entitled “The Merger Agreement—Conditions to the Mergers”; |
| • | | Compliance with Covenants—Performance or compliance in all material respects by Salesforce, Merger Sub I and Merger Sub II of the obligations, covenants and agreements required to be performed or complied with by it at or prior to the closing; |
| • | | Officer Certificate—The receipt by Slack of a certificate, dated as of the closing date, signed by the chief executive officer or chief financial officer of Salesforce certifying that the conditions set forth in the two bullet points immediately above have been satisfied; and |
| • | | Tax Opinion—The receipt by Slack of a written opinion from legal counsel to Slack, in form and substance reasonably satisfactory to Slack, dated as of the closing date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income tax purposes the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. |
No Solicitation of Other Offers by Slack (page 111) Under the terms of the merger agreement, subject to certain exceptions described below, Slack has agreed that, from December 1, 2020 until the earlier of the first effective time or the date (if any) on which the merger agreement is terminated, Slack will not and will cause its subsidiaries, and its and their respective officers and directors not to, and Slack will use reasonable best efforts to cause its and its subsidiaries’ other representatives to not, directly or indirectly: solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, (including, or the making, submission or announcement of -19-
| any inquiry, proposal or offer, which constitutes or would reasonably be expected to lead to an acquisition proposal (as defined in the section entitled “The Merger Agreement—No Solicitation of Other Offers by Slack”); |
participate in any negotiations regarding, or furnish to any person any information relating to Slack or any of its subsidiaries in connection with, an actual or potential acquisition proposal; adopt, approve, endorse or recommend, or propose to adopt, approve, endorse or recommend, any acquisition proposal; withdraw, change, amend, modify or qualify, or otherwise propose to withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, the Slack board’s recommendation that Slack stockholders approve the transactions, including the first merger, and adopt the merger agreement and approve the transactions contemplated thereby (which we refer to as the “Slack board recommendation”), or resolve or agree to take any such action; if an acquisition proposal has been publicly disclosed, fail to publicly recommend against any such acquisition proposal within 10 business days after the public disclosure of such acquisition proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, such rejection of such acquisition proposal) and reaffirm the Slack board recommendation within such 10-business-day period (or, if earlier, by the second business day prior to the Slack special meeting); fail to include the Slack board recommendation in this proxy statement/prospectus; approve, or authorize, or cause or permit Slack or any of its subsidiaries to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or document with respect to, or any other agreement or commitment providing for, any acquisition proposal (other than certain confidentiality agreements); call or convene a meeting of Slack stockholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or resolve or agree to do any of the foregoing. In addition, under the merger agreement, Slack has agreed that it will and will cause its subsidiaries, and its and their respective officers and directors to, and Slack will use its reasonable best efforts to cause its and its subsidiaries’ other representatives to, immediately cease any and all solicitation, encouragement, discussions or negotiations with any persons, or provision of any information to any persons, with respect to any inquiry, proposal or offer is extendedthat constitutes, or amended,would reasonably be expected to lead to, an acquisition proposal. Notwithstanding the prohibitions described above, if Slack receives, prior to the receipt of the Slack stockholder approval, an unsolicited bona fide written acquisition proposal that did not result from a breach of Slack’s non-solicitation obligations, Slack, its subsidiaries and its representatives are permitted to contact the person or any of its representatives who has made such acquisition proposal to clarify (and not to negotiate or engage in any discussions regarding or relating to) the material terms and conditions of such acquisition proposal so that Slack may inform itself about such acquisition proposal. Subject to the conditions discussed in the section entitled “The Merger Agreement—No Solicitation of Other Offers by Slack,” Slack, its subsidiaries and its representatives are permitted to furnish non-public information to such person and engage in discussions or negotiations with such person with respect to the acquisition proposal. -20-
Change of Recommendation; Match Rights (page 114) Slack Restrictions on Changes of Recommendation Subject to certain exceptions described below, the Slack board may not effect a change of recommendation (as defined in the section entitled “The Merger Agreement—Change of Recommendation; Match Rights”). Permitted Changes of Recommendation in Connection with a Superior Proposal or Intervening Event Prior to, but not after, the time the merger proposal has been approved by Slack stockholders: | • | | the Slack board may make a change of recommendation (but may not terminate the merger agreement) in response to an intervening event (as defined in the section entitled “The Merger Agreement—Changes of Recommendation; Match Rights”) if the Slack board has determined in good faith, after consultation with Slack’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law; or |
| • | | the Slack board may make a change of recommendation and cause Slack to terminate the merger agreement in order to enter into a definitive agreement providing for an unsolicited acquisition proposal received after December 1, 2020 that did not result from a breach of Slack’s non-solicitation obligations and such acquisition proposal is not withdrawn (subject to payment by Slack to Salesforce of the termination fee described under the sections entitled “The Merger Agreement—Termination Fee” and “The Merger Agreement—Expenses”), which the Slack board has determined in good faith after consultation with Slack’s outside legal counsel and financial advisors that such acquisition proposal constitutes a superior proposal, but only if the Slack board has determined in good faith, after consultation with Slack’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law. |
Prior to making a change of recommendation for any reason set forth above, Slack must provide Salesforce with four business days’ prior written notice advising Salesforce that the Slack board intends to make a change of recommendation. In each case, Slack must cause its representatives to negotiate in good faith (to the extent Salesforce desires to negotiate) any proposal by Salesforce to amend the merger agreement in a manner that would eliminate the need for the Slack board to make such change of recommendation, and the Slack board must make the required determination regarding its fiduciary duties again at the end of such four business day negotiation period (after taking into account in good faith the amendments to the merger agreement proposed by Salesforce, if any). Terminationof the Merger Agreement (page 122) Termination by Salesforce or Slack The merger agreement may be terminated at any time before the closing by mutual written consent of Salesforce and Slack. The merger agreement may also be terminated at any time before the closing by either Salesforce or Slack, if: any governmental entity of competent jurisdiction has issued a final, non-appealable order, injunction, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the merger agreement; the closing has not occurred on or before August 1, 2021, subject to (a) an automatic extension or amendment), promptly afterto November 1, 2021, if all of the conditions to closing, other than those pertaining to (i) the expiration of the offer,waiting period under the Offeror will accept for payment,HSR Act and certain other specified antitrust or foreign direct investment laws or (ii) any order or injunction prohibiting the transaction under regulatory laws (which we refer to together as the “regulatory conditions”), have been satisfied or waived and (b) another automatic extension to February 1, 2022 if on November 1, 2021 one or both of the regulatory conditions have -21-
| not been fulfilled but all other conditions to closing have been satisfied or waived (we refer to August 1, 2021, as so extended, as the “outside date”), and further subject to the exceptions discussed in the section entitled “The Merger Agreement—Termination—Termination by Salesforce or Slack”; and |
the Slack stockholder approval has not been obtained upon a vote taken thereon at the Slack special meeting. Termination by Slack The merger agreement may be terminated at any time before the closing by Slack if: | • | | the Slack board effects a change of recommendation and Slack substantially concurrently enters into a definitive agreement providing for a superior proposal, as long as (1) Slack has complied in all material respects with its obligations to provide notice and negotiate with Salesforce regarding amendments to the merger agreement, as described under the sections entitled “The Merger Agreement—No Solicitation of Other Officers by Slack” and “The Merger Agreement—Changes of Recommendation; Match Rights” and (2) substantially concurrently with or prior to (and as a condition to) such termination, Slack pays to Salesforce the $900 million termination fee described below; or |
| • | | upon a Salesforce breach termination event (as defined in the section entitled “The Merger Agreement—Termination—Termination by Slack”). |
Termination by Salesforce The merger agreement may be terminated by Salesforce: | • | | at any time before the receipt of the Slack stockholder approval, if the Slack board has effected a change of recommendation or Slack has materially breached its obligations described under the sections entitled “The Merger Agreement—No Solicitation of Other Offers by Slack” or “The Merger Agreement—Change of Recommendation; Match Rights”; or |
| • | | upon a Slack breach termination event (as defined in the section entitled “The Merger Agreement—Termination—Termination by Salesforce”). |
Termination Fee (page 124) The merger agreement provides that Slack will pay for,Salesforce a termination fee of $900 million (which we refer to as the “termination fee”) if all Tableau shares validly tendered and not validly withdrawn prior to the expiration of the offer.following occurs: (1)(a) Salesforce or Slack terminates the merger agreement as a result of (x) the closing having not occurred on or before the outside date or (y) the Slack stockholder approval having not been obtained, or (b) Salesforce terminates the merger agreement as a result of breach, failure to perform or violation of the merger agreement by Slack that (except for a breach of Slack’s non-solicitation obligations) first occurred following the making of an acquisition proposal of the type described in (2); | • | | (2) after the date of the merger agreement and prior to the date of the termination (or prior to the receipt of the Slack stockholder approval in the case of a termination as a result of the Slack stockholder approval having not been obtained), a bona fide acquisition proposal has been publicly disclosed or otherwise made known to the Slack board or management and in each case is not withdrawn (publicly, if publicly disclosed) at least three business days prior to the earlier of the Slack special meeting and such termination; and |
(3) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement providing for an acquisition proposal is entered into. -22-
In addition, the merger agreement requires Slack to pay Salesforce the termination fee if any of the following occurs: | • | | (1) Salesforce terminates the merger agreement because the Slack board has effected a change of recommendation or Slack has materially breached its obligations described under the sections entitled “The Merger Agreement—No Solicitation of Other Offers by Slack” or “The Merger Agreement—Change of Recommendation; Match Rights;” |
| • | | (2) Slack terminates the merger agreement because the closing has not occurred on or before the outside date, at a time when Salesforce would be permitted to terminate the merger agreement because the Slack board has effected a change of recommendation or Slack has materially breached its obligations described under the sections entitled “The Merger Agreement—No Solicitation of Other Offers by Slack” or “The Merger Agreement—Change of Recommendation; Match Rights;” or |
(3) Slack terminates the merger agreement in order to enter into a definitive agreement providing for a superior proposal. In no event will Slack be required to pay the termination fee on more than one occasion. HSR and Other Regulatory Approvals (Page 70) (page 117) The completion of the offermergers is subject to the expiration or termination of the applicable waiting periods under the HSR Act and the obtaining of any required pre-closing approvals, consents, waivers or clearances under the applicablecertain specified antitrust laws of Germany.and foreign investment laws. This requirement is discussed under “The Offer—“The Mergers—Regulatory Approvals.Approvals.” Interests of Tableau DirectorsFor additional information, see the section entitled “The Merger Agreement—HSR and Officers in the Offer and the Merger (Page 73)Other Regulatory Approvals.”
You should be aware that someFinancing of the officers and directors of Tableau may be deemedMergers (page 97)
Salesforce anticipates that the funds needed to have interests incomplete the offer andtransactions contemplated by the merger that are differentagreement will be derived from or in addition to, your interests as a Tableau stockholder. These interests may include, among others, agreements that certain officers have entered into with Tableau that provide for the accelerationcombination of stock options(i) available cash on hand and restricted stock units in the event the officer experiences a qualifying termination of employment within a specified period following a change of control of Tableau, payments of severance benefits under Tableau’s change in control severance agreements executive officers, agreements that certain executive officers have entered into with Salesforce that provide for grants of Salesforce equity awards following the effective time and certain indemnification obligations.(ii) third party debt financing. See “The Offer—Interests of Certain Persons in the Offer and the Merger” and “Merger Agreement—Employee Matters” below for more information. As of June 24, 2019, the directors and executive officers of Tableau and their affiliates beneficially owned approximately 10,500,460 Tableau shares, representing approximately 12.0%“The Mergers—Financing of the Tableau shares outstanding asMergers” for additional information regarding the anticipated financing of June 24, 2019.the mergers.
Salesforce’s obligation to complete the mergers is not conditioned upon the receipt of any financing. Voting and Support Agreement (page 126) Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stoltecertain Slack stockholders, including Stewart Butterfield, Eric Costello, Cal Henderson and Patrick Hanrahan,Serguei Mourachov (whom we refer to collectively as the “founders”) entered into a lettervoting and support agreement with Salesforce (which, as it may be amended from time to time, we refer to as the “voting and the Offeror, solely in their capacities as stockholders of Tableau,support agreement”), pursuant to which, they agreed, among other things, and subject to convertthe terms and conditions of the voting and support agreement, each founder agreed to vote, or cause to be voted, all of their shares of Tableau Class BSlack common stock into shares of Tableau Class A common stock, whichbeneficially owned by such founder (i) in the aggregate represent approximately 11.8%favor of the outstanding shares of Tableau common stock, prior to the expiration of the offer. The co-founders have also conveyed to both Salesforceapproval and Tableau that they intend to tender into the offer. For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and such letter agreement, which is filed as Exhibit 10.25 to this document. See also “Item 3—Past Contacts, Transactions, Negotiations and Agreements” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.
No Appraisal Rights (Page 66)
No appraisal rights are available in connection with the offer or the merger. See “The Offer—No Appraisal Rights.”
Comparative Market Price and Dividend Matters (Page 109)
Salesforce common stock is listed on the NYSE under the symbol “CRM,” and Tableau Class A common stock is listed on the NYSE under the symbol “DATA.” There is no trading market for the shares of Tableau Class B common stock, which convert, on a one-for-one basis, into shares of Tableau Class A common stock at the election of the holder or, subject to certain exceptions (none of such exceptions being applicable to the consummation of the offer), if transferred by the holder to a third party.
The parties announced the execution of the merger agreement prior the opening of trading on June 10, 2019. On June 7, 2019, the trading day prior to the public announcement of the executionadoption of the merger agreement and the releasetransactions contemplated by the merger agreement and (ii) against any acquisition proposal or any action or agreement that is in opposition to the mergers. The voting and support agreement terminates upon certain events, including the termination of media reports regarding the transaction,merger agreement in accordance with its terms.
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As of December 16, 2020, the closing price per shareshares of Tableau Class ASlack common stock on the NYSE was $125.21, and the closing price per share of Salesforce common stock on the NYSE was $161.27. On July 2, 2019, the most recent practicable trading date priorsubject to the filing of this document, the closing price per share of Tableau Class A common stock on the NYSE was $168.99,voting and the closing price per share of Salesforce common stock on the NYSE was $154.12. The market valuesupport agreement represent approximately 13.1% of the stock consideration will change as the market value of Salesforce common stock fluctuates during the offer period and thereafter. Tableau stockholders should obtain current market quotations for shares of Tableauoutstanding Slack Class A common stock and SalesforceSlack Class B common stock, or approximately 55.8% of the total aggregate voting power of the shares before deciding whetherof Slack Class A common stock and Slack Class B common stock issued and outstanding.
For more information, see the section entitled “Voting and Support Agreement” and Annex D to tenderthis proxy statement/prospectus. Appraisal Rights (page 51 and 140) Pursuant to Section 262 of the DGCL, holders of Slack common stock who hold their Tableaushares through the first effective time, do not vote their shares in the offer. See “Comparative Market Price and Dividend Matters.” Ownershipfavor of Salesforce Shares After the Offer and the Merger (Page 67)
Salesforce estimates that former Tableau stockholders will own, in the aggregate, approximately 11.0%adoption of the outstanding Salesforcemerger agreement and who comply fully with and properly demand appraisal for their shares immediately followingunder the completionapplicable requirements of Section 262 of the offerDGCL and do not otherwise withdraw or lose the merger.
For a detailed discussionright to appraisal under Delaware law, have the right to seek appraisal of the assumptions on which this estimatefair value of their shares of Slack common stock, as determined by the Delaware Court of Chancery, if the first merger is based, see “The Offer—Ownershipcompleted. The “fair value” of Salesforce Aftershares of Slack common stock as determined by the OfferDelaware Court of Chancery may be more than, less than, or equal to the value of the merger consideration that Slack stockholders would otherwise be entitled to receive under the terms of the merger agreement. Slack stockholders also should be aware that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the first merger, is not an opinion as to, and does not otherwise address, “fair value” under Section 262 of the Merger.”DGCL. Holders of Slack common stock who wish to preserve any appraisal rights they may have, must so advise Slack by submitting a written demand for appraisal prior to the vote to adopt the merger agreement and approve the transactions contemplated thereby, and must otherwise follow fully the procedures prescribed by Section 262 of the DGCL.
Comparison of Stockholders’ Rights (Page 128)
The rights of Salesforce stockholders are different in some respects from the rights of Tableau stockholders. Therefore, Tableau stockholders will have different rights as stockholders once they become Salesforce stockholders. The differences are described in more detail under “Comparison of Stockholders’ Rights.”
Material U.S. Federal Income Tax Consequences (Page 122)of the Mergers (page 128) Each of Tableau and Salesforce intends the offer and the merger,The mergers, taken together, are intended to qualify as a reorganization“reorganization” within the meaning of Section 368(a) of the Code. It is a condition to the completion of the mergers that each of Salesforce and Slack receives an opinion from its respective counsel dated as of the closing date to the effect that the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In generaladdition, in connection with the filing of the registration statement of which this proxy statement/prospectus is a part, each of Wachtell, Lipton, Rosen & Katz and subjectLatham & Watkins LLP has delivered an opinion to Salesforce and Slack, respectively, to the qualificationssame effect as the opinions described in the preceding sentence. Each of the foregoing opinions of counsel is or will be based on, among other things, certain factual representations made by Salesforce and limitationsSlack and certain assumptions, all of which must be consistent with the state of facts existing at the time of the mergers. If any of these representations and assumptions are, or become, inaccurate or incomplete, such opinions may be invalid, and the conclusions reached therein could be jeopardized. An opinion of counsel represents counsel’s best legal judgment and is not binding on the IRS or the courts, which may not agree with the conclusions set forth in such opinion.
Assuming that the section titled “Material U.S. Federal Income Tax Consequences,” if the offer and the merger,mergers, taken together, qualify as a reorganization“reorganization” within the meaning of Section 368(a) of the Code, holders of Tableau shares are not expected to recognize any gain or loss fora U.S. federal income tax purposes onHolder (as defined under the exchange of shares of Tableau common stock for shares of Salesforce common stock in the offer or merger, except with respect to any cash received in lieu of fractional shares of Salesforce common stock. Each Tableau stockholder should read the discussion under “Materialsection entitled “Material U.S. Federal Income Tax Consequences” for a more complete discussionConsequences of the U.S. federal income tax consequencesMergers”) will generally recognize gain (but not loss) in an amount equal to the lesser of: (1) the sum of the offeramount of cash consideration (other than cash in lieu of a fractional share of Salesforce common stock) and the merger (including the U.S. federal income tax consequencesfair market value of the receiptSalesforce common stock received, minus such holder’s adjusted tax basis in its shares of Slack common stock surrendered, and (2) the amount of cash consideration received (other than cash in lieu of a fractional share of Salesforce common stock). For additional information, please read the section entitled “Material U.S. Federal Income Tax matters can be complicated,Consequences of the Mergers.”
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The tax consequences to you of the mergers will depend on your particular facts and circumstances. Please consult your tax advisor as to the tax consequences of the offermergers in your particular circumstances, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. Comparison of Stockholders’ Rights (page 134) Both Salesforce and Slack are incorporated under the mergerlaws of the State of Delaware, and accordingly, the rights of the stockholders of each are currently, and will continue to a particular Tableau stockholder will depend on such stockholder’s particular factsbe governed by the DGCL. However, Salesforce stockholders and circumstances. TableauSlack stockholders should consult their own tax advisors to determine the specific consequences to them of exchanging their shares of Tableau common stock for the transaction considerationhave different rights pursuant to the offer orconstituent documents of each of Salesforce and Slack. Upon the merger.completion of the mergers, Slack stockholders will become Salesforce stockholders and will have rights different from those they currently have as Slack stockholders. Certain differences between the constituent documents of Salesforce and Slack are described in the section entitled “Comparison of Stockholders’ Rights.” Accounting Treatment (Page 83)Listing of Salesforce Common Stock; Delisting and Deregistration of Slack Common Stock (page 96)
In accordance with United States generally accepted accounting principles (which we referIf the mergers are completed, the shares of Salesforce common stock to as “GAAP”), Salesforcebe issued in the first merger will accountbe listed for trading on the acquisitionNYSE, shares of shares throughSlack common stock will be delisted from the offerNYSE and the mergerderegistered under the acquisition method of accounting for business combinations.
Questions aboutExchange Act, and Slack will no longer be required to file periodic reports with the Offer and the Merger
Questions or requests for assistance or additional copies of this document may be directedSEC pursuant to the information agent at the telephone number and addresses set forth below. Tableau stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the offer.
The Information Agent for the Offer is:
509 Madison Avenue
Suite 1206
New York, NY 10022
Shareholders Call Toll Free: (800) 662-5200
Banks & Brokers Call Collect: (203) 658-9400
E-mail: DATA@morrowsodali.comExchange Act.
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF SALESFORCE The following table sets forth summaryselected historical consolidated financial data of Salesforce.Salesforce (i) as of and for each of the five years ended January 31, 2020, 2019, 2018, 2017 and 2016 and (ii) as of and for the nine months ended October 31, 2020 and 2019. All references to “fiscal years,” unless otherwise noted, refer to the 12-month fiscal year. The consolidated statement of operations data for the fiscal years ended January 31, 2020, 2019 2018 and 2017,2018, and the consolidated balance sheet data as of January 31, 20192020 and 20182019, are derived from, and are qualified by reference to, Salesforce’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2019,2020, previously filed with the SEC on March 8, 20195, 2020, and incorporated by reference into this document. The consolidated statement of operations data for the fiscal years ended January 31, 20162017 and 20152016, and the consolidated balance sheet data as of April 30, 2018October 31, 2019, and January 31, 2018, 2017 2016, and 20152016, are derived from Salesforce’s consolidated financial statements not included or incorporated by reference into this document. The selected historical consolidated financial data as of April 30, 2019October 31, 2020, and for the threenine months ended April 30,October 31, 2020 and 2019, and 2018, are derived from Salesforce’s unaudited consolidated financial statements and related notes contained in its Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2019,October 31, 2020, previously filed with the SEC on June 5, 2019December 4, 2020, and incorporated by reference into this document. The following selected historical consolidated financial data is only a summary and is not necessarily indicative of future results. Such financial data should be read together with, and is qualified in its entirety by reference to, Salesforce’s historical consolidated financial statements and the accompanying notes and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are set forth in Salesforce’s Annual Report on Form 10-K for the fiscal year ended January 31, 2019,2020, previously filed with the SEC on March 8, 20195, 2020, and incorporated by reference into this document, and in Salesforce’s Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2019,October 31, 2020, previously filed with the SEC on June 5, 2019December 4, 2020 and incorporated by reference in tointo this document. The consolidated statement of operations data for fiscal years 2020, 2019 2018 and 20172018 and for the threenine months ended April 30,October 31, 2020 and 2019, and 2018 and the selected consolidated balance sheet data as of April 30,October 31, 2020 and 2019, and 2018 and January 31, 2020, 2019, 2018 and 2017, reflect the retrospective adoption of Accounting Standards Update (“ASU”(which we refer to as “ASU”) 2014-09, “Revenue from Contracts with Customers (“TopicCustomers” (which we refer to as “Topic 606”)”. The consolidated statement of operations data for fiscal years 2020 and 2019 and for the threenine months ended April 30, 2019October 31, 2020 and 2018 and the selected consolidated balance sheet data as of April 30, 2019 and 2018 and January 31, 2019 reflect the prospective adoption of ASU No. 2016-01, “Financial Instruments-Overall (Subtopic 825-10)” (“ASU 2016-01”). The consolidated statement of operations data for the three months ended April 30, 2019 and the selected consolidated balance sheet data as of April 30,October 31, 2020 and 2019, and January 31, 2020 and 2019, reflect the prospective adoption of ASU No. 2016-01, “Financial Instruments-Overall (Subtopic 825-10)” (which we refer to as “ASU 2016-01”). The consolidated statement of operations data for fiscal year 2020 and the nine months ended October 31, 2020 and 2019, and the selected consolidated balance sheet data as of October 31, 2020 and 2019 and January 31, 2020 reflect the prospective adoption of ASU 2016-02, “Leases (Topic 842).”. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (in millions, except per share data) | | Nine Months Ended
October 31, | | | Fiscal Year Ended January 31, | | | | 2020 | | | 2019 | | | 2020 | | | 2019 | | | 2018
(as adjusted) | | | 2017
(as adjusted) | | | 2016 | | Consolidated Statement of Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Subscription and support | | $ | 14,500 | | | $ | 11,480 | | | $ | 16,043 | | | $ | 12,413 | | | $ | 9,766 | | | $ | 7,799 | | | $ | 6,205 | | Professional services and other | | | 935 | | | | 767 | | | | 1,055 | | | | 869 | | | | 774 | | | | 638 | | | | 462 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenue | | $ | 15,435 | | | $ | 12,247 | | | $ | 17,098 | | | $ | 13,282 | | | $ | 10,540 | | | $ | 8,437 | | | $ | 6,667 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended
April 30, | | | Fiscal Year Ended January 31, | | | (in millions, except per share data) | | 2019 | | | 2018 | | | 2019 | | | 2018
(as adjusted) | | | 2017
(as adjusted) | | | 2016 | | | 2015 | | Consolidated Statement of Operations Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | Subscription and support | | $ | 3,496 | | | $ | 2,810 | | | $ | 12,413 | | | $ | 9,766 | | | $ | 7,799 | | | $ | 6,205 | | | $ | 5,014 | | Professional services and other | | | 241 | | | | 196 | | | | 869 | | | | 774 | | | | 638 | | | | 462 | | | | 360 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Revenue | | $ | 3,737 | | | $ | 3,006 | | | $ | 13,282 | | | $ | 10,540 | | | $ | 8,437 | | | $ | 6,667 | | | $ | 5,374 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Income (loss) from operations | | $ | 210 | | | $ | 191 | | | $ | 535 | | | $ | 454 | | | $ | 218 | | | $ | 115 | | | $ | (146 | ) | Net income (loss) | | $ | 392 | | | $ | 344 | | | $ | 1,110 | | | $ | 360 | | | $ | 323 | | | $ | (47 | ) | | $ | (263 | ) | Net income (loss) per share-basic and diluted: | | | | | | | | | | | | | | | | | | | | | | | | | Basic net income (loss) per share | | $ | 0.51 | | | $ | 0.47 | | | $ | 1.48 | | | $ | 0.50 | | | $ | 0.47 | | | $ | (0.07 | ) | | $ | (0.42 | ) | Diluted net income (loss) per share | | $ | 0.49 | | | $ | 0.46 | | | $ | 1.43 | | | $ | 0.49 | | | $ | 0.46 | | | $ | (0.07 | ) | | $ | (0.42 | ) | Shares used in computing basic net income (loss) per share | | | 771 | | | | 729 | | | | 751 | | | | 715 | | | | 688 | | | | 662 | | | | 624 | | Shares used in computing diluted net income (loss) per share | | | 793 | | | | 754 | | | | 775 | | | | 735 | | | | 700 | | | | 662 | | | | 624 | | | | | | | | As of April 30, | | | As of January 31, | | | (in millions) | | 2019 | | | 2018 | | | 2019 | | | 2018
(as adjusted) | | | 2017
(as adjusted) | | | 2016 | | | 2015 | | Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash, cash equivalents and marketable securities(1) | | $ | 6,379 | | | $ | 7,159 | | | $ | 4,342 | | | $ | 4,521 | | | $ | 2,209 | | | $ | 2,725 | | | $ | 1,890 | | (Negative) working capital(2) | | | (453 | ) | | | 2,256 | | | | (572 | ) | | | (483 | ) | | | (1,013 | ) | | | 90 | | | | (15 | ) | Total assets | | | 33,154 | | | | 22,963 | | | | 30,737 | | | | 21,984 | | | | 18,286 | | | | 12,763 | | | | 10,654 | | Noncurrent debt and other noncurrent liabilities | | | 6,220 | | | | 4,008 | | | | 3,877 | | | | 1,541 | | | | 2,824 | | | | 2,119 | | | | 2,254 | | Total liabilities | | | 16,708 | | | | 11,903 | | | | 15,132 | | | | 11,608 | | | | 10,056 | | | | 7,760 | | | | 6,690 | | Retained earnings (accumulated deficit) | | | 2,127 | | | | 969 | | | | 1,735 | | | | 635 | | | | 275 | | | | (653 | ) | | | (606 | ) | Total stockholders’ equity | | | 16,446 | | | | 11,060 | | | | 15,605 | | | | 10,376 | | | | 8,230 | | | | 5,003 | | | | 3,975 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (in millions, except per share data) | | Nine Months Ended
October 31, | | | Fiscal Year Ended January 31, | | | | 2020 | | | 2019 | | | 2020 | | | 2019 | | | 2018
(as adjusted) | | | 2017
(as adjusted) | | | 2016 | | Income from operations(1) | | $ | 262 | | | $ | 333 | | | $ | 297 | | | $ | 535 | | | $ | 454 | | | $ | 218 | | | | 155 | | Gains (losses) on strategic investments, net | | $ | 1,910 | | | $ | 396 | | | $ | 427 | | | $ | 542 | | | $ | 19 | | | $ | 31 | | | | (16 | ) | Net income (loss) | | $ | 3,805 | | | $ | 374 | | | $ | 126 | | | $ | 1,110 | | | $ | 360 | | | $ | 323 | | | $ | (47 | ) | Basic net income (loss) per share | | $ | 4.20 | | | $ | 0.46 | | | $ | 0.15 | | | $ | 1.48 | | | $ | 0.50 | | | $ | 0.47 | | | $ | (0.07 | ) | Diluted net income (loss) per share | | $ | 4.11 | | | $ | 0.45 | | | $ | 0.15 | | | $ | 1.43 | | | $ | 0.49 | | | $ | 0.46 | | | $ | (0.07 | ) | Shares used in computing basic net income (loss) per share | | | 905 | | | | 809 | | | | 829 | | | | 751 | | | | 715 | | | | 688 | | | | 662 | | Shares used in computing diluted net income (loss) per share | | | 926 | | | | 829 | | | | 850 | | | | 775 | | | | 735 | | | | 700 | | | | 662 | |
Footnotes
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of October 31, | | | As of January 31, | | | (in millions) | | 2020 | | | 2019 | | | 2020 | | | 2019 | | | 2018
(as adjusted) | | | 2017
(as adjusted) | | | 2016 | | Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash, cash equivalents, and marketable securities | | $ | 9,492 | | | $ | 6,529 | | | $ | 7,947 | | | $ | 4,342 | | | $ | 4,521 | | | $ | 2,209 | | | $ | 2,725 | | (Negative) working capital(2) | | | 2,712 | | | | 552 | | | | 1,118 | | | | (572 | ) | | | (483 | ) | | | (1,013 | ) | | | 90 | | Total assets | | | 59,136 | | | | 49,942 | | | | 55,126 | | | | 30,737 | | | | 21,984 | | | | 18,286 | | | | 12,763 | | Noncurrent debt and other noncurrent liabilities(3) | | | 6,592 | | | | 6,189 | | | | 6,396 | | | | 3,877 | | | | 1,541 | | | | 2,824 | | | | 2,119 | | Total liabilities | | | 18,826 | | | | 16,663 | | | | 21,241 | | | | 15,132 | | | | 11,608 | | | | 10,056 | | | | 7,760 | | Retained earnings (accumulated deficit) | | | 5,666 | | | | 2,109 | | | | 1,861 | | | | 1,735 | | | | 635 | | | | 275 | | | | (653 | ) | Total stockholders’ equity | | | 40,310 | | | | 33,279 | | | | 33,885 | | | | 15,605 | | | | 10,376 | | | | 8,230 | | | | 5,003 | |
| (1) | ExcludesFiscal year 2020 income from operations includes a $166 million one-time non-cash charge related to the restricted cash balanceaccounting for Salesforce’s business combination with Salesforce.org, in which there was the settlement of $115.0 million as of January 31, 2015.the reseller agreement between the two companies.
|
| (2) | Salesforce considers all of its marketable debt securities to be available to support current liquidity needs including those with maturity dates beyond one year, and therefore Salesforce classifies these securities within current assets on the consolidated balance sheets. For consistency in presentation, (negative) working capital in the table above as of January 31, 2016 and 2015 includes amounts previously reported in Marketablemarketable securities, noncurrent. In addition, other reclassifications were made to balances as of January 31, 2018, 2017, 2016, and 20152016 to conform to the current period presentation. |
| (3) | Amounts include noncurrent operating lease liabilities of (i) $2.4 billion as of October 31, 2020 and $2.5 billion as of October 31, 2019 and (ii) $2.4 billion as of January 31, 2020 and $0 as of January 31, 2019, 2018, 2017 and 2016, respectively. |
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF TABLEAUSLACK The following table sets forth summaryselected historical consolidated financial data of Tableau.Slack (i) as of and for each of the four years ended January 31, 2020, 2019, 2018 and 2017 and (ii) as of and for the nine months ended October 31, 2020 and 2019. All references to “fiscal years,” unless otherwise noted, refer to the 12-month fiscal year. The consolidated statement of operationsfinancial data for the fiscal years ended DecemberJanuary 31, 2020, 2019 and 2018, 2017 and 2016, and the consolidated balance sheet data as of DecemberJanuary 31, 20182020 and 2017 are2019 have been derived from, and are qualified by reference to, Tableau’sSlack’s selected financial data and audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended DecemberJanuary 31, 2018, previously filed with the SEC on February 22, 2019 and incorporated by reference into this document. The consolidated statement of operations data for the years ended December 31, 2015 and 2014 and the consolidated balance sheet data as of March 31, 2018 and December 31, 2016, 2015, and 2014 are derived from Tableau’s consolidated financial statements not included or2020, which is incorporated by reference into this document. The selected historical consolidated financial data of Slack for the year ended January 31, 2017 and as of MarchJanuary 31, 2018 and 2017 have been derived from Slack’s selected financial data and audited consolidated financial statements for such years, which have not been incorporated by reference herein. The selected historical consolidated financial data for the nine months ended October 31, 2020 and 2019 and for the three months ended Marchas of October 31, 2019 and 2018, are2020 have been derived from Tableau’sSlack’s unaudited consolidated financial statements and related notes containeddata included in its Quarterly Report on Form 10-Q for the quarterly periodquarter ended MarchOctober 31, 2019, previously filed with the SEC on May 6, 2019 and2020, which is incorporated by reference into this document. The selected balance sheet data as of October 31, 2019 has been derived from Slack’s unaudited consolidated financial statements as of October 31, 2019, which have not been incorporated by reference herein. The following selected historical consolidated financial datainformation set forth below is only a summary and is not necessarily indicative of the results of future results. Such financial dataoperations of Slack nor does it include the effects of the mergers. This summary should be read together with and is qualified in its entirety by reference to, Tableau’s historicalthe consolidated financial statements, and the accompanyingrelated notes and the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are set forthOperations” in Tableau’sSlack’s Annual Report on Form 10-K for the fiscal year ended DecemberJanuary 31, 2018, previously filed with2020 and Quarterly Report on Form 10-Q for the SEC on February 22, 2019 andquarter ended October 31, 2020, each of which is incorporated by reference into this document, andherein in Tableau’s Quarterly Report on Form 10-Q forits entirety. For additional information, see the quarterly period ended March 31, 2019, previously filed with the SEC on May 6, 2019 and incorporated by reference in to this document.section entitled “Where You Can Find More Information.” | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended
October 31, | | | Year Ended January 31, | | | | | 2020 | | | 2019 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | | | (In thousands, except per share data) | | Consolidated Statements of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | Revenue | | $ | 652,012 | | | $ | 448,519 | | | $ | 630,422 | | | $ | 400,552 | | | $ | 220,544 | | | $ | 105,153 | | Cost of revenue(1) | | | 86,517 | | | | 72,820 | | | | 97,191 | | | | 51,301 | | | | 26,364 | | | | 15,517 | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross profit | | | 565,495 | | | | 375,699 | | | | 533,231 | | | | 349,251 | | | | 194,180 | | | | 89,636 | | Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Research and development(1) | | | 281,450 | | | | 363,725 | | | | 457,364 | | | | 157,538 | | | | 141,350 | | | | 96,678 | | Sales and marketing(1) | | | 338,787 | | | | 299,440 | | | | 402,780 | | | | 233,191 | | | | 140,188 | | | | 104,006 | | General and administrative(1) | | | 155,710 | | | | 209,624 | | | | 261,365 | | | | 112,730 | | | | 56,493 | | | | 37,455 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | | | 775,947 | | | | 872,789 | | | | 1,121,509 | | | | 503,459 | | | | 338,031 | | | | 238,139 | | | | | | | | | | | | | | | | | | | | | | | | | | | Loss from operations | | | (210,452 | ) | | | (497,090 | ) | | | (588,278 | ) | | | (154,208 | ) | | | (143,851 | ) | | | (148,503 | ) | Interest income (expense) and other income, net | | | (1,832 | ) | | | 17,323 | | | | 20,510 | | | | 16,146 | | | | 4,581 | | | | 1,749 | | | | | | | | | | | | | | | | | | | | | | | | | | | Loss before income taxes | | | (212,284 | ) | | | (479,767 | ) | | | (567,768 | ) | | | (138,062 | ) | | | (139,270 | ) | | | (146,754 | ) | Benefit (provision) for income taxes | | | 1,101 | | | | 504 | | | | (589 | ) | | | (840 | ) | | | (793 | ) | | | (155 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Net loss | | | (211,183 | ) | | | (479,263 | ) | | | (568,357 | ) | | | (138,902 | ) | | | (140,063 | ) | | | (146,909 | ) |
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The consolidated statement of operations data for fiscal 2018 and for the three months ended March 31, 2019 and 2018 and the selected consolidated balance sheet data as of March 31, 2019 2018, and December 31, 2018 reflect the modified retrospective adoption of Topic 606. The consolidated statement of operations data for the three months ended March 31, 2019 and the selected consolidated balance sheet data as of March 31, 2019 reflect the prospective adoption of Topic 842.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended
October 31, | | | Year Ended January 31, | | | | | 2020 | | | 2019 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | | | (In thousands, except per share data) | | Net income (loss) attributable to noncontrolling interest(2) | | | 7,278 | | | | 2,792 | | | | 2,701 | | | | 1,781 | | | | 22 | | | | (45 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Net loss attributable to Slack | | �� | (218,461 | ) | | | (482,055 | ) | | | (571,058 | ) | | | (140,683 | ) | | | (140,085 | ) | | | (146,864 | ) | Less: Deemed dividends to preferred stockholders | | | — | | | | — | | | | — | | | | — | | | | 40,883 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Net loss attributable to Slack common stockholders | | $ | (218,461 | ) | | $ | (482,055 | ) | | $ | (571,058 | ) | | $ | (140,683 | ) | | $ | (180,968 | ) | | $ | (146,864 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Basic and diluted net loss per share: | | | | | | | | | | | | | | | | | | | | | | | | | Net loss per share attributable to Slack common stockholders, basic and diluted | | $ | (0.39 | ) | | $ | (1.38 | ) | | $ | (1.43 | ) | | $ | (1.16 | ) | | $ | (1.47 | ) | | $ | (1.28 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted-average shares used in computing net loss per share attributable to Slack common stockholders, basic and diluted | | | 564,095 | | | | 348,580 | | | | 399,461 | | | | 121,732 | | | | 122,865 | | | | 114,887 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended
March 31, | | | Year Ended December 31, | | | | | 2019 | | | 2018 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | (in thousands, except per share data) | | As
Reported
(ASC 606) | | | As
Reported
(ASC 606) | | | As
Reported
(ASC 606) | | | Without
Adoption
(ASC 605) | | | As
Reported
(ASC 605) | | | As
Reported
(ASC 605) | | | As
Reported
(ASC 605) | | | As
Reported
(ASC 605) | | Consolidated Statements of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | License | | $ | 117,552 | | | $ | 108,793 | | | $ | 555,581 | | | $ | 498,050 | | | $ | 429,204 | | | $ | 481,659 | | | $ | 423,766 | | | $ | 279,944 | | Maintenance and services | | | 164,908 | | | | 137,414 | | | | 599,771 | | | | 484,899 | | | | 447,855 | | | | 345,284 | | | | 229,821 | | | | 132,672 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenues | | | 282,460 | | | | 246,207 | | | | 1,155,352 | | | | 982,949 | | | | 877,059 | | | | 826,943 | | | | 653,587 | | | | 412,616 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income (loss) | | | (93,180 | ) | | | (50,379 | ) | | | (89,749 | ) | | | (288,831 | ) | | | (190,965 | ) | | | (139,561 | ) | | | (52,030 | ) | | | 6,324 | | Net income (loss) | | $ | (88,882 | ) | | $ | (46,472 | ) | | $ | (77,042 | ) | | $ | (277,238 | ) | | $ | (185,560 | ) | | $ | (144,449 | ) | | $ | (83,700 | ) | | $ | 5,873 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Basic | | $ | (1.04 | ) | | $ | (0.57 | ) | | $ | (0.93 | ) | | $ | (3.36 | ) | | $ | (2.35 | ) | | $ | (1.92 | ) | | $ | (1.17 | ) | | $ | 0.09 | | Diluted | | $ | (1.04 | ) | | $ | (0.57 | ) | | $ | (0.93 | ) | | $ | (3.36 | ) | | $ | (2.35 | ) | | $ | (1.92 | ) | | $ | (1.17 | ) | | $ | 0.08 | | Weighted average shares used to compute net income (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Basic | | | 85,434 | | | | 81,039 | | | | 82,632 | | | | 82,632 | | | | 78,869 | | | | 75,162 | | | | 71,701 | | | | 67,591 | | Diluted | | | 85,434 | | | | 81,039 | | | | 82,632 | | | | 82,632 | | | | 78,869 | | | | 75,162 | | | | 71,701 | | | | 74,319 | | | | | | | | As of March 31, | | | As of December 31, | | | | | 2019 | | | 2018 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | (in thousands) | | | | | | | | As
Reported
(ASC 606) | | | Without
Adoption
(ASC 605) | | | As
Reported
(ASC 605) | | | As
Reported
(ASC 605) | | | As
Reported
(ASC 605) | | | As
Reported
(ASC 605) | | Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 501,056 | | | $ | 623,994 | | | $ | 653,022 | | | $ | 653,022 | | | $ | 627,878 | | | $ | 908,717 | | | $ | 795,900 | | | $ | 680,613 | | Short-term and long-term investments | | | 558,710 | | | | 399,149 | | | | 395,633 | | | | 395,633 | | | | 375,151 | | | | 0 | | | | 0 | | | | 0 | | Property and equipment, net | | | 102,477 | | | | 101,121 | | | | 94,537 | | | | 94,537 | | | | 106,753 | | | | 106,637 | | | | 72,350 | | | | 45,627 | | Working capital | | | 869,116 | | | | 652,416 | | | | 867,143 | | | | 546,658 | | | | 526,489 | | | | 722,903 | | | | 672,138 | | | | 629,987 | | Total assets | | | 1,839,656 | | | | 1,430,656 | | | | 1,634,725 | | | | 1,481,703 | | | | 1,398,795 | | | | 1,287,199 | | | | 1,030,711 | | | | 865,662 | | Deferred revenue, including long-term portion | | | 382,185 | | | | 336,385 | | | | 394,198 | | | | 605,640 | | | | 447,484 | | | | 312,473 | | | | 198,511 | | | | 129,810 | | Total liabilities | | | 820,671 | | | | 520,783 | | | | 621,140 | | | | 830,818 | | | | 645,172 | | | | 495,351 | | | | 296,766 | | | | 193,656 | | Total stockholders’ equity | | | 1,018,985 | | | | 909,873 | | | | 1,013,585 | | | | 650,885 | | | | 753,623 | | | | 791,848 | | | | 733,945 | | | | 672,006 | |
| (1) | Includes stock-based compensation as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended
October 31, | | | Year Ended January 31, | | | | | 2020 | | | 2019 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | | | (In thousands) | | Cost of revenue | | $ | 7,543 | | | $ | 13,671 | | | $ | 16,013 | | | $ | 732 | | | $ | 491 | | | $ | 630 | | Research and development | | | 85,705 | | | | 193,117 | | | | 226,507 | | | | 9,948 | | | | 35,260 | | | | 34,546 | | Sales and marketing | | | 44,695 | | | | 82,792 | | | | 98,797 | | | | 2,677 | | | | 8,044 | | | | 9,744 | | General and administrative | | | 31,656 | | | | 73,707 | | | | 85,207 | | | | 9,775 | | | | 4,288 | | | | 5,171 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total stock-based compensation | | $ | 169,599 | | | $ | 363,287 | | | $ | 426,524 | | | $ | 23,132 | | | $ | 48,083 | | | $ | 50,091 | | | | | | | | | | | | | | | | | | | | | | | | | | |
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following selected unaudited pro forma condensed combined financial data has been prepared to reflectIn fiscal year 2020, Slack recorded cumulative stock-based compensation of $245.1 million for all outstanding RSUs as the proposed acquisitionperformance vesting condition was satisfied upon the completion of Tableau by Salesforce and the completed acquisitionSlack’s direct listing of MuleSoft, Inc (“MuleSoft”) by Salesforce on May 2, 2018.
On June 9, 2019, Salesforce and Tableau entered into the merger agreement, pursuant to which Salesforce agreed to acquire Tableau on the terms and subject to the conditions set forth therein. The transaction has not yet closed. Under the terms of the merger agreement, Salesforce is offering to exchange for each outstanding share of Tableauits Class A common stock, or the direct listing. Stock-based compensation for fiscal years 2020, 2019, 2018, and Tableau Class B2017 included compensation expense of $0, $14.8 million, $0, and $26.5 million, respectively, related to secondary sales of common stock 1.103 shares of Salesforceby certain current and former employees and $0, $0, $39.4 million, and $8.0 million, respectively, related to cash payments attributable to tender offers and repurchases for outstanding common stock, together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.stock.
The selected unaudited pro forma condensed combined statement of operations for the year ended January 31, 2019 combines the historical consolidated statements of operations of Salesforce for the year ended January 31, 2019 with the historical consolidated statements of operations of Tableau for the year ended December 31, 2018, giving effect to the completion of the offer and the merger, as if they had occurred on February 1, 2018. On May 2, 2018, Salesforce acquired MuleSoft, which was deemed a significant acquisition pursuant to Regulation S-X, Topic 2. As the historical consolidated statement of operations of Salesforce for the year ended January 31, 2019 does not reflect MuleSoft’s operations for an entire annual period, the selected unaudited pro forma condensed combined statement of operations for the year ended January 31, 2019 are adjusted for the historical consolidated statement of operations of MuleSoft for the period from February 1, 2018 through the date of acquisition on May 2, 2018, giving effect to the completion of the acquisition, as if it had occurred on February 1, 2018.
The selected unaudited pro forma condensed combined statement of operations for the three months ended April 30, 2019 combines the historical condensed consolidated statements of operations of Salesforce for the three months ended April 30, 2019 with the historical condensed consolidated statements of operations of Tableau for the three months ended March 31, 2019, giving effect to the completion of the offer and the merger, as if they had occurred on February 1, 2018. The historical condensed consolidated statements of operations of Salesforce for the three months ended April 30, 2019 include the results of MuleSoft for the full period presented, therefore no adjustments needed to be made.-29-
The selected unaudited pro forma condensed combined balance sheet as of April 30, 2019 combines the historical condensed consolidated balance sheet of Salesforce as of April 30, 2019 with the historical condensed consolidated balance sheet of Tableau as of March 31, 2019, giving effect to the completion of the offer and the merger, as if they had occurred on April 30, 2019. The historical condensed consolidated balance sheet of Salesforce as of April 30, 2019 reflects the results of MuleSoft, therefore no adjustments needed to be made.
The pro forma financial information does not give effect to the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, or any other synergies that may result from the offer and the merger, nor does it give effect to any changes in share price.
The selected unaudited pro forma condensed combined financial data has been prepared for informational purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of Salesforce would have been had the offer and the merger occurred on the dates assumed, nor is this information necessarily indicative of future consolidated results of operations or financial position. The following information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and the related notes included elsewhere in this document.
Selected Unaudited Pro Forma Condensed Combined Statement of Operations
| (2) | Slack’s consolidated financial statements include Slack’s majority-owned subsidiary, Slack Fund. The ownership interest of minority investors in Slack Fund is recorded as a non-controlling interest. |
| | | | | | | | | | | | Fiscal Year Ended
January 31, 2019 | | | Three Months Ended
April 30, 2019 | | | (in millions, except per share data) | | | | Revenue | | $ | 14,350 | | | $ | 3,972 | | Net income | | $ | 48 | | | $ | 155 | | Net income per share: | | | | | | | | | Basic | | $ | 0.06 | | | $ | 0.18 | | Diluted | | $ | 0.05 | | | $ | 0.17 | | Shares used in computing earnings per share: | | | | | | | | | Basic | | | 850 | | | | 867 | | Diluted | | | 885 | | | | 898 | |
Selected Unaudited Pro Forma Condensed Combined Balance Sheet
| | | | | | | | | | | | | | | | | | | | | | | | October 31, | | | January 31, | | | | | 2020 | | | 2019 | | | 2020 | | | 2019 | | | 2018 | | | | | (In thousands) | | Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | Cash, cash equivalents, and marketable securities | | $ | 1,575,497 | | | $ | 774,106 | | | $ | 768,592 | | | $ | 841,071 | | | $ | 548,761 | | Working capital | | | 1,197,957 | | | | 512,375 | | | | 450,463 | | | | 650,324 | | | | 440,258 | | Total assets | | | 2,311,257 | | | | 1,184,852 | | | | 1,441,706 | | | | 1,198,956 | | | | 697,780 | | Total deferred revenue | | | 401,280 | | | | 303,924 | | | | 376,714 | | | | 241,873 | | | | 125,453 | | Convertible senior notes, net | | | 640,767 | | | | — | | | | — | | | | — | | | | — | | Convertible preferred stock(1) | | | — | | | | — | | | | — | | | | 1,392,101 | | | | 965,221 | | Total stockholders’ equity | | | 877,008 | | | | 747,231 | | | | 723,899 | | | | 841,606 | | | | 519,288 | |
| | | | | | | | As of
April 30, 2019 | | | (in millions) | | | | Total assets | | $ | 49,837 | | Total liabilities | | $ | 17,786 | | Total stockholders’ equity | | $ | 32,051 | |
| (1) | Prior to the completion of the direct listing in fiscal year 2020, all of the 373.4 million shares of convertible preferred stock converted into an equivalent number of shares of Class B common stock. |
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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA (UNAUDITED)
The following table reflects historical information about basic and diluted earnings (loss) per share for the fiscal year ended January 31, 20192020 and the threenine months ended April 30, 2019, in the case of Salesforce, and for the fiscal year ended DecemberOctober 31, 2018 and the three months ended March 31, 2019, in the case of Tableau, and for the period from February 1, 2018 through May 2, 2018, in the case of MuleSoft,2020, as well as book value per share as of April 30, 2019, in the case of Salesforce, and as of MarchOctober 31, 2019, in the case of Tableau, in all cases2020, on a historical basis, and for Salesforce Tableau and MuleSoftSlack on an unaudited pro forma combined basis after giving effect to the offer and the merger.mergers as if they had been completed on February 1, 2019. The pro forma data of the combined companies assumes the acquisition of 100% of the TableauSlack Class A common stock and Slack Class B sharescommon stock by Salesforce and was derived by combining the historical consolidated financial information of Salesforce Tableau and MuleSoftSlack, as described previously in this document. For a discussion of the assumptions and adjustments made in preparing the pro forma financial information presented in this document, see “Unaudited Pro Forma Condensed Combined Financial Statements.” TableauSlack stockholders should read the information presented in the following table together with the historical financial statements of Salesforce Tableau and MuleSoft and the related notes which are incorporated herein by reference, and the “Unaudited Pro Forma Condensed Combined Financial Statements” appearing elsewhere in this document.Slack. The pro forma data is unaudited and is presented for illustrative purposes only. TableauSlack stockholders should not rely on this information as being indicative of the historical results that would have been achieved during the periods presented had the companies always been combined or the future results that the combined company will achieve after the consummation of the offer and the merger.mergers. This pro forma information is subject to risks and uncertainties, including those discussed in “Risk Factors.“Risk Factors.”
| | | | Salesforce
Historical | | MuleSoft
Historical | | Tableau
Historical | | Pro Forma
Combined | | Pro Forma
Equivalent
Tableau
Share(1) | | | Salesforce
Historical | | | Slack
Historical | | Pro Forma
Combined | | | Pro Forma
Equivalent
Slack
Share(1) | | Fiscal year ended January 31, 2019 for Salesforce, the fiscal year ended December 31, 2018 for Tableau and the period from February 1, 2018 through May 2, 2018 for MuleSoft | | | | | | | | | | | | Net income (loss) per share: | | | | | | | | | | | | Fiscal year ended January 31, 2020 for Salesforce and the fiscal year ended January 31, 2020 for Slack | | | | | | | | | | Net income (loss) per share attributable to common stockholders: | | | | | | | | | | Basic earnings (loss) per share | | $ | 1.48 | | | $ | (0.22 | ) | | $ | (0.93 | ) | | $ | 0.06 | | | $ | 0.06 | | | $ | 0.15 | | | $ | (1.43 | ) | | $ | (1.54) | | | $ | (0.12) | | Diluted earnings (loss) per share | | $ | 1.43 | | | $ | (0.22 | ) | | $ | (0.93 | ) | | $ | 0.05 | | | $ | 0.06 | | | $ | 0.15 | | | $ | (1.43 | ) | | $ | (1.54) | | | $ | (0.12) | | Cash dividends declared per share | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | | 0 | | | | 0 | | | 0 | | | | 0 | | Three months ended April 30, 2019 for Salesforce and the three months ended March 31, 2019 for Tableau: | | | | | | | | | | | | Net income (loss) per share: | | | | | | | | | | | | Nine months ended October 31, 2020 for Salesforce and the nine months ended October 31, 2020 for Slack: | | | | | | | | | | Net income (loss) per share attributable to common stockholders: | | | | | | | | | | Basic earnings (loss) per share | | $ | 0.51 | | | N/A | | | $ | (1.04 | ) | | $ | 0.18 | | | $ | 0.20 | | | $ | 4.20 | | | $ | (0.39 | ) | | $ | 2.59 | | | $ | 0.20 | | Diluted earnings (loss) per share | | $ | 0.49 | | | N/A | | | $ | (1.04 | ) | | $ | 0.17 | | | $ | 0.19 | | | $ | 4.11 | | | $ | (0.39 | ) | | $ | 2.51 | | | $ | 0.20 | | Cash dividends declared per share | | 0 | | | N/A | | | 0 | | | 0 | | | 0 | | | | 0 | | | | 0 | | | 0 | | | | 0 | | Book value per share as of April 30, 2019 for Salesforce and March 31, 2019 for Tableau | | $ | 21.22 | | | N/A | | | $ | 11.85 | | | $ | 36.80 | | | $ | 40.59 | | | Book value per share as of October 31, 2020 for Salesforce and October 31, 2020 for Slack | | | $ | 44.10 | | | $ | 1.52 | | | $ | 51.72 | | | $ | 4.01 | |
| (1) | The TableauSlack pro forma equivalent per share amounts were calculated by multiplying the pro forma combined amounts by the exchange ratio of 1.103.0.0776. |
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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION Market Prices Salesforce common stock is listed on the NYSE under the symbol “CRM,” and Slack Class A common stock is listed on the NYSE under the symbol “WORK.” The Slack Class B common stock is not publicly traded but converts, on a one-for-one basis, into Slack Class A common stock at the election of the holder. The following table sets forth the closing sale price per share of Salesforce common stock and Slack Class A common stock reported on the NYSE as of (1) November 24, 2020, the trading day prior to the release of media reports regarding the transaction, (2) November 30, 2020, the trading day before the public announcement of the execution of the merger agreement and (3) , 2021 the latest practicable trading date before the date of this proxy statement/prospectus. The table also shows the estimated implied value of the per share merger consideration for each share of Slack common stock as of the same three days. This implied value was calculated by multiplying the closing prices per share of Salesforce common stock on those dates by an exchange ratio of 0.0776 and adding the cash portion of the merger consideration of $26.79 per share, without interest. | | | | | | | | | | | | | | | | Salesforce
Common Stock | | | Slack Class A
Common Stock | | | Implied Per Share Value
of Merger Consideration | | November 24, 2020 | | $ | 260.84 | | | $ | 29.58 | | | $ | 47.03 | | November 30, 2020 | | $ | 245.80 | | | $ | 40.67 | | | $ | 45.86 | | , 2021 | | $ | | | | $ | | | | $ | | |
The market prices of Salesforce common stock and Slack Class A common stock have fluctuated since the date of the announcement of the merger agreement and will continue to fluctuate from the date of this proxy statement/prospectus to the date of the Slack special meeting and the date the mergers are completed and thereafter (in the case of Salesforce common stock). The value of the merger consideration to be received in exchange for each share of Slack common stock will fluctuate with changes in the market value of Salesforce common stock until the last trading day before the mergers are complete. The value of the merger consideration to be received in exchange for each share of Slack common stock when received by Slack stockholders after the mergers are completed could be greater than, less than or the same as shown in the table above. Accordingly, Slack stockholders are advised to obtain current market quotations for Salesforce common stock and Slack Class A common stock in deciding whether to vote in favor of the merger proposal. Dividends Salesforce has never paid any cash dividends on its common stock. The Salesforce board currently intends to retain any future earnings to support operations and to finance the growth and development of its business and does not intend to pay cash dividends on its common stock for the foreseeable future. Any future determination related to Salesforce’s dividend policy will be made at the discretion of the Salesforce board. Slack has never paid any cash dividends on its common stock. Under the terms of the merger agreement, prior to the completion of the mergers, Slack is not permitted to declare, set aside, authorize, make or pay any dividend or other distribution without the consent in writing of Salesforce. -32-
RISK FACTORS TableauIn addition to the other information contained in or incorporated by reference herein, including the matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements,” Slack stockholders should carefully read this documentconsider the following risks before deciding how to vote with respect to the merger proposal and non-binding compensation advisory proposal to be considered and voted on at the Slack special meeting, together with general investment risks and all of the other documents referred toinformation included in, or incorporated by reference into this document, includingproxy statement/prospectus. This proxy statement/prospectus also contains forward-looking statements that involve risks and uncertainties. Please read the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”
The risks described below are certain material risks, although not the only risks, relating to the transactions contemplated by the merger agreement and each of Salesforce, Slack, the surviving corporation and the surviving company in particularrelation to the mergers. The risks described below are not the only risks that Salesforce or Slack currently face or that Salesforce, the surviving corporation or the surviving company will face after the completion of the mergers. Additional risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect the business, financial condition and results of operations of Salesforce, the surviving corporation or the surviving company, or the market price of Salesforce common stock following the completion of the mergers. If any of the following risk factors,risks and uncertainties develop into actual events, these events could have a material adverse effect on the business, financial condition and results of operations of Salesforce, Slack, the surviving corporation and/or the surviving company. In addition, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in deciding whether to tender Tableau shares pursuant to the offer.future periods. Risk Factors Relating to the Offer and the MergerMergers The transactionmerger consideration is fixed and will not be adjusted. Because the market price of Salesforce common stock may fluctuate, TableauSlack stockholders cannot be sure of the market value of the stock consideration they will receive in exchange for their Tableau shares of Slack common stock in connection with the transactions. In connection with the offermergers, each share of Slack common stock issued and outstanding immediately prior to the merger, Tableau stockholdersfirst effective time (other than dissenting shares, cancelled shares or shares covered by Slack restricted share awards) will receive a fixed number of Salesforce shares for each of theirbe converted into (a) 0.0776 shares of Tableau Class ASalesforce common stock and Tableau Class B common stock (i.e., 1.103 Salesforce shares for each Tableau share).(b) the right to receive $26.79 in cash, without interest. Accordingly, the market value of the stock consideration that you will receive in the offer or merger will vary based on the price of Salesforce common stock at the time you receive the transactionmerger consideration. The market price of Salesforce common stock may decline after the date of this document, after you tenderexchange your shares and/or after the offer and the merger are completed.closing. A decline in the market price of Salesforce common stock could result from a variety of factors beyond Salesforce’s control, including, among other things, the possibility that Salesforce may not achieve the expected benefits of the acquisition of TableauSlack as rapidly or to the extent anticipated, Tableau’sSlack’s business may not perform as anticipated following the transactions,closing, the effect of Salesforce’s acquisition of TableauSlack on Salesforce’s financial results may not meet the expectations of Salesforce, financial analysts or investors, or the addition and integration of Tableau’sSlack’s business may be unsuccessful, may take longer or be more disruptive than anticipated, as well as numerous factors affecting Salesforce and its businesses that are unrelated to Tableau.Slack. BecauseIf the offermergers are completed, there will not be completed until certain conditions have been satisfied or waived in accordance witha lapse of time between each of the date of this proxy statement/prospectus, the date on which Slack stockholders vote to approve the Slack merger proposal at the Slack special meeting, and the date on which Slack stockholders entitled to receive the merger agreement,consideration actually receive the merger consideration. The market value of shares of Salesforce common stock may decline during and after
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these periods as a significant periodresult of time may pass between the commencementa variety of the offer, the time you tender your sharesfactors, and the time that the Offeror accepts your shares for payment. Therefore,consequently, at the time you tender your Tableau shares pursuantSlack stockholders must decide whether to approve the offer, youmerger proposal, they will not know the exactactual market value of any merger consideration they will receive when the mergers are completed. The actual value of any merger consideration received by Slack stockholders at the completion of the mergers will depend on the market value of the transaction considerationshares of Salesforce common stock at that will be issued if the Offeror accepts such shares for payment.time. See “Comparative Market Price and Dividend Matters.” You are urged to obtain current market quotations for shares of TableauSlack Class A common stock and for shares of Salesforce common stock.
The offer remains subject to conditions that Salesforce cannot control.
The offer is subject to conditions, including the minimum tender condition, receipt of required regulatory approvals, lack of legal prohibitions, no material adverse effect (as described in “Merger Agreement—Material Adverse Effect”) having occurred with respect to Tableau since the date of the merger agreement that is continuing as of immediately prior to the expiration of the offer, the accuracy of Tableau’s representations and warranties made in the merger agreement (subject to specified materiality standards), Tableau being in compliance in all material respects with its covenants under the merger agreement, the listing of the Salesforce shares to be issued in the offer and the merger being authorized for listing on the NYSE, subject to official notice of issuance, the registration statement on Form S-4 of which this document is a part becoming effective, and the merger agreement not having been terminated in accordance with its terms. There are no assurances that all of the conditions to the offer will be satisfied or that the conditions will be satisfied in the time frame expected. If the conditions to the offer are not met, then Salesforce may, subject to the terms and conditions of the merger agreement, allow the offer to expire, or amend or extend the offer. See “The Offer—Conditions of the Offer” for a discussion of the conditions to the offer.
If the transactionsmergers are completed, TableauSlack stockholders will receive Salesforce shares as part of the transactionmerger consideration and will accordingly become Salesforce stockholders. Salesforce common stock may be affected by different factors than Tableauthose that affect Slack common stock, is affected by, and Salesforce stockholders will have different rights than TableauSlack stockholders.
Upon consummation of the transactions, TableauSlack stockholders will receive Salesforce shares as part of the transactionmerger consideration and will accordingly become Salesforce stockholders. Salesforce’s business differs from that of Tableau,Slack, and Salesforce’s results of operations and stock price may be adversely affected by factors different from those that would affect Tableau’sSlack’s results of operations and stock price. Following the completion of the mergers, Slack will be part of a larger company, so decisions affecting Slack may be made in respect of the larger combined business as a whole rather than the Slack business individually. For a discussion of the businesses of Salesforce and Slack and of some important factors to consider in connection with those businesses, see the section entitled “Information About the Companies” and the documents incorporated by reference in the section entitled “Where You Can Find More Information,” including, in particular, in the sections entitled “Risk Factors” in each of Salesforce’s and Slack’s Annual Report on Form 10-K for the year ended January 31, 2020 and Quarterly Reports on Form 10-Q for the quarters ended April 30, 2020, July 31, 2020 and October 31, 2020. In addition, holders of shares of Salesforce common stock will have rights as Salesforce stockholders that differ from the rights they had as TableauSlack stockholders before the transactions. For example, shares of Tableau Class B common stock are generally entitled to 10 votes per share, whereas all Salesforce shares are entitled to one vote per share. For a comparison of the rights of Salesforce stockholders to the rights of TableauSlack stockholders, see “Comparisonthe section entitled “Comparison of Stockholders’ Rights.Rights.” TableauSlack stockholders who participate in the Offer will be forfeiting all rights with respect to their Tableau shares of Slack common stock other than the right to receive the transactionmerger consideration, including the right to participate directly in any earnings or future growth of Tableau.Slack.
If the offer and the mergermergers are completed, TableauSlack stockholders will cease to have any equity interest in TableauSlack and will not participate in its earnings or any future growth, except indirectly through ownership of Salesforce shares received inas part of the offer and the merger consideration. Consummation of the offer may adversely affect the liquidity of the Tableau shares not tendered in the offer.
If the offer is completed, you should expect the number of Tableau stockholders and the number of publicly traded Tableau shares to be significantly reduced. As a result, the closing of the offer can be expected to adversely affect, in a material way, the liquidity of the remaining Tableau shares held by the public pending the consummation of the merger. Although Salesforce currently expects the merger to occur on the day after the offer is completed, Salesforce cannot assure you that all conditions to the merger will be satisfied at that time, or at all.
TableauSlack directors and officers potentially have interests in the transaction that differ from, or are in addition to, the interests of the TableauSlack stockholders generally.
You should be aware that some of the officers and directors of TableauSlack may be deemed to have interests in the offer and the mergermergers that are different from, or in addition to, your interests as a TableauSlack stockholder. These interests may include, among others, agreements that certain officers have entered into with TableauSlack that provide for the acceleration of stockSlack options, Slack RSU awards and Slack restricted stock unitsshare awards in the event the officer experiences a qualifying termination of employment within a specified period following a change of control of Tableau,Slack, payments of severance benefits under Tableau’s change in controlSlack’s change-in-control severance agreements with executive officers, agreements that certain executive officers have entered into with Salesforce that provide for grants of Salesforce equity awards following the first effective time and certain indemnification obligations. See “The Offer—For additional information, see the sections entitled “The Mergers—Interests of Certain PersonsSlack Directors and Executive Officers in the OfferMergers” and the Merger” and “Merger“The Merger Agreement—Employee Matters” below for more information.Matters.” -34-
As of June 24, 2019, theDecember 16, 2020, Slack directors, and executive officers, of Tableau and their respective affiliates, as a group, beneficially owned approximately 10,500,460 Tableauheld and were entitled to vote 7,688,272 shares of Slack Class A common stock and 82,661,892 shares of Class B common stock, representing approximately 12.0%62.8% of the total Tableauvoting power of Slack common stock, including the shares outstanding ascovered by voting agreements in favor of June 24, 2019.Stewart Butterfield. Concurrently with the execution of the merger agreement, on June 9, 2019, Tableau’s co-founders, Christian Chabot, Christopher Stoltecertain Slack stockholders, including Slack’s founders, Stewart Butterfield, Eric Costello, Cal Henderson and Patrick Hanrahan,Serguei Mourachov, entered into a lettervoting and support agreement with Salesforce, and the Offeror, solely in their capacities as stockholders of Tableau, pursuant to which, they agreed, among other things, and subject to convertthe terms and conditions of the voting and support agreement, each founder agreed to vote, or cause to be voted, all of their shares of TableauSlack common stock beneficially owned by such founder, (i) in favor of the approval and adoption of the merger agreement and the transactions contemplated by the merger agreement and (ii) against any acquisition proposal or any action or agreement that is in opposition to the mergers. The voting and support agreement terminates upon certain events, including the termination of the merger agreement in accordance with its terms. As of December 16, 2020, the shares of Slack common stock subject to the voting and support agreement represent approximately 13.1% of the outstanding Slack Class A common stock and Slack Class B common stock, intoor approximately 55.8% of the total aggregate voting power of the shares of TableauSlack Class A common stock which in the aggregate represent approximately 11.8% of the outstanding shares of Tableauand Slack Class B common stock prior to the expiration of the offer. The co-founders have also conveyed to both Salesforceissued and Tableau that they intend to tender into the offer.outstanding. For more information, regardingsee the letter agreement, see “Other Transaction Agreements—Lettersection entitled “Voting and Support Agreement” and such letter agreement, which is filed as Exhibit 10.25Annex D to this document.proxy statement/prospectus.
TableauSlack stockholders will have a reduced ownership and voting interest in Salesforce as compared to their ownership and voting interest in Tableau.Slack and will exercise less influence over management.
After consummationCurrently, Slack stockholders have the right to vote in the election of the offerSlack board and the power to approve or reject any matters requiring stockholder approval under Delaware law and the Slack certificate of incorporation and bylaws. Upon completion of the first merger, Tableaueach Slack stockholder who receives shares of Salesforce common stock in the first merger will become a stockholder of Salesforce with a percentage ownership of Salesforce that is smaller than the Slack stockholder’s current percentage ownership of Slack. Based on the number of issued and outstanding shares of Salesforce common stock and shares of Slack common stock as of , 2021 and the exchange ratio of 0.0776, after the first merger Slack stockholders will ownare expected to become owners of approximately 11.0%% of the outstanding shares of Salesforce common stock, without giving effect to any shares based uponof Salesforce common stock held by Slack stockholders prior to the numbercompletion of outstanding Tableau shares as of June 24, 2019,the first merger and disregarding stock options, restricted stock units and other equity awards or rights to acquire shares that may be issued by Salesforce or TableauSlack pursuant to any employee stock plan. Additionally, whereas shares of TableauSlack Class B common stock are entitled to 10 votes per share, which generally provides such stockholders greater influence on the management and policies of Tableau,Slack, all Salesforce shares are entitled to one vote per share.
Consequently, even if all former TableauSlack stockholders will havevoted together on all matters presented to Salesforce stockholders from time to time, the former Slack stockholders would exercise significantly less influence on the management and policies of the combined company than they currently exercise over Tableau. Sales of substantial amounts of Salesforce shares in the open market by former Tableau stockholders could depress its stock price.
Other than shares held by persons who will be affiliates of Salesforce after the offercompletion of the mergers relative to their influence over Slack prior to the completion of the mergers, and thus would have a less significant impact on the approval or rejection of future Salesforce proposals submitted to a stockholder vote.
The mergers may not be accretive, and may be dilutive, to Salesforce’s earnings per share, which may negatively affect the market price of Salesforce common stock. In connection with the completion of the mergers, based on the number of issued and outstanding shares of Slack common stock as of , 2021 and the merger, Salesforce shares that are issued to Tableau stockholders, including those shares issued upon the exercisenumber of outstanding Slack equity awards currently estimated to be payable in Salesforce common stock options or restricted stock units,following the mergers, Salesforce will be freely tradable without restrictions or further registration under the Securities Act. If the offer and the merger are completed and if former Tableau stockholders and Tableau employees sell substantial amountsissue up to approximately shares of Salesforce common stock. The issuance of these new shares of Salesforce common stock incould have the public market following consummationeffect of the offer and the merger,depressing the market price of Salesforce common stock, may decrease. Holdersthrough dilution of Tableau common stock and holdersearnings per share or otherwise. Any dilution of, Salesforce common stock will not be entitled to appraisal rights in the merger.
Section 262 of the DGCL provides that stockholders have the right, in some circumstances, to dissent from certain corporate actions and to instead demand payment of the fair value of their shares. Stockholders do not have appraisal rights with respect to sharesor delay of any class or seriesaccretion to, Salesforce’s earnings per share could cause the price of stock if such shares of stock, or depositary receipts in respect thereof, are either (a) listed on a national securities exchange or (b) held of record by more than 2,000 holders, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation (or depositary receipts in respect thereof), or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash in lieu of fractional shares or fractional depositary receipts described above or any combination of the foregoing.
Therefore, because shares of Tableau common stock are listed on NYSE, and the transaction consideration consists of only shares of Salesforce common stock which are listed on NYSE, and cash in lieu of fractional shares, holders of Tableau common stock are not entitled to appraisal rights in the offerdecline or the merger with respect to their shares of Tableau common stock. In addition, because the merger is of Tableau withincrease at a subsidiary of reduced rate.
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Salesforce and holders of Salesforce common stockSlack will continue to hold their shares following completion of the merger, holders of Salesforce common stock are not entitled to appraisal rightsincur significant transaction and merger-related costs in connection with the offermergers, which may be in excess of those anticipated by Salesforce or the merger with respect to their sharesSlack. Each of Salesforce common stock. See “The Offer—No Appraisal Rights.and Slack has incurred and expects to continue to incur a number of non-recurring costs associated with negotiating and completing the mergers, combining the operations of the two companies and achieving desired synergies. These fees and costs have been, and will continue to be, substantial. The substantial majority of non-recurring expenses will consist of transaction costs related to the mergers and include, among others, employee retention costs, fees paid to financial, legal and accounting advisors, severance and benefit costs, proxy solicitation costs and filing fees. Salesforce and Slack will also incur transaction fees and costs related to formulating and implementing integration plans, including facilities and systems consolidation costs and employment-related costs. Salesforce and Slack will continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the mergers and the integration of the two companies’ businesses. Although Salesforce and Slack each expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow Salesforce and Slack to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all. For additional information, see the risk factor entitled “The integration of Slack into Salesforce may not be as successful as anticipated” below. The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results of Salesforce following the completion of the mergers. Many of these costs will be borne by Salesforce or Slack even if the mergers are not completed. Litigation relating to the offermergers, if any, could result in an injunction preventing the completion of the mergers and/or substantial costs to Salesforce and Slack. Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or other business combination agreements like the merger agreement. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Salesforce’s and Slack’s respective liquidity and financial condition. Lawsuits that may be brought against Salesforce, Slack or their respective directors could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the merger agreement already implemented and to otherwise enjoin the parties from consummating the mergers. One of the conditions to the closing of the mergers is that no injunction by any governmental entity having jurisdiction over Salesforce, Slack, Merger Sub I or Merger Sub II has been entered and continues to be in effect and no law has been adopted, in either case that prohibits the closing of the mergers. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the mergers, that injunction may delay or prevent the mergers from being completed within the expected time frame or at all, which may adversely affect Salesforce’s and Slack’s respective business, financial position and results of operations. There can be no assurance that any of the defendants will be successful in the outcome of any potential future lawsuits. The defense or settlement of any lawsuit or claim that remains unresolved at the time the mergers are completed may adversely affect Salesforce’s or Slack’s business, financial condition, results of operations and cash flows. The opinions of Slack’s financial advisors will not reflect changes in circumstances between the signing of the merger agreement and the completion of the mergers. Slack has received opinions from Qatalyst Partners and Goldman Sachs in connection with the signing of the merger agreement, but has not obtained updated opinions from either financial advisor as of the date of this -36-
proxy statement/prospectus. Changes in the operations and prospects of Salesforce or Slack, general market and economic conditions and other factors that may be beyond the control of Salesforce or Slack, and on which Slack’s financial advisors’ opinions were based, may significantly alter the value of Salesforce or Slack or the prices of the shares of Salesforce common stock or of the shares of Slack common stock by the time the mergers are completed. The opinions do not speak as of the time the mergers will be completed or as of any date other than the date of such opinions. Because Slack does not currently anticipate asking its financial advisors to update their opinions, the opinions will not address the fairness of the merger consideration or the exchange ratio, as applicable, from a financial point of view at the time the mergers are completed. The Slack board’s recommendation that Slack stockholders vote “FOR” approval of the merger proposal and the non-binding compensation advisory proposal, however, is made as of the date of this proxy statement/prospectus. For a description of the opinions that Slack received from its financial advisors, see the sections entitled “The Mergers—Opinion of Qatalyst Partners LP, Slack’s Financial Advisor” and “The Mergers—Opinion of Goldman Sachs & Co. LLC, Slack’s Financial Advisor.” A copy of the opinion of Qatalyst Partners, Slack’s financial advisor, is attached as Annex B to this proxy statement/prospectus and a copy of the opinion of Goldman Sachs, Slack’s financial advisor, is attached as Annex C to this proxy statement/prospectus, and each is incorporated by reference herein in its entirety. The merger agreement limits Slack’s ability to pursue alternatives to the mergers, may discourage certain other companies from making favorable alternative transaction proposals and, in specified circumstances, could require Slack to pay Salesforce a termination fee. The merger agreement contains provisions that may discourage a third party from submitting an acquisition proposal to incur significant costsSlack that might result in greater value to Slack’s stockholders than the mergers, or may result in a potential competing acquirer of Slack proposing to pay a lower per share price to acquire Slack than it might otherwise have proposed to pay. These provisions include a general prohibition on Slack from soliciting or, subject to certain exceptions relating to the exercise of fiduciary duties by the Slack board, entering into discussions with any third party regarding any acquisition proposal for Slack or offer for a competing transaction. Further, even if the Slack board withholds, withdraws, qualifies or modifies its recommendation with respect to the merger proposal, unless the merger agreement has been terminated in accordance with its terms, Slack will still have an obligation to submit the merger proposal to a vote by its stockholders. The merger agreement further provides that under specified circumstances, including after a change of recommendation by the Slack board and suffer management distraction,a subsequent termination of the merger agreement by the other party in accordance with its terms, Slack may be required to pay Salesforce a cash termination fee of $900 million. For additional information, see the sections entitled “The Merger Agreement—No Solicitation of Other Offers by Slack,” “The Merger Agreement—Change of Recommendation; Match Rights” and “The Merger Agreement—Termination of the Merger Agreement.” Salesforce expects to obtain financing in connection with the mergers and cannot guarantee that it will be able to obtain such financing on favorable terms or at all. Salesforce anticipates that the funds needed to complete the transactions contemplated by the merger agreement will be derived from a combination of (i) available cash on hand and (ii) third party debt financing. See “The Mergers—Financing of the Mergers” for additional information regarding the anticipated financing of the mergers. Salesforce’s ability to obtain any such new debt financing will depend on, among other factors, prevailing market conditions and other factors beyond Salesforce’s control. Salesforce cannot assure you that it will be able to obtain new debt financing on terms acceptable to it or at all, and any such failure could materially adversely affect its operations and financial condition. Salesforce’s obligation to complete the mergers is not conditioned upon the receipt of any financing. The mergers may not be completed and the merger agreement may be terminated in accordance with its terms. The mergers are subject to a number of conditions that must be satisfied or waived prior to the closing, which are described in the section entitled “The Merger Agreement—Conditions to the Mergers.” These -37-
conditions to the closing may not be satisfied or waived in a timely manner or at all, and, accordingly, the mergers may be delayed or may not be completed. In addition, if the closing has not occurred on or before the outside date, either Salesforce or Slack may choose not to proceed with the mergers by terminating the merger agreement, and the parties can mutually decide to terminate the merger agreement at any time, before or after Slack stockholder approval. In addition, Salesforce and Slack may elect to terminate the merger agreement in certain other circumstances as further detailed in the section entitled “The Merger Agreement—Termination of the Merger Agreement.” Failure to complete the mergers could negatively impact the price of shares of Salesforce common stock and the price of shares of Slack common stock, as well as to delay and/or enjoin the merger.Salesforce’s and Slack’s respective future businesses and financial results. The merger agreement contains a number of conditions that must be satisfied or waived prior to the completion of the mergers, which are described in the section entitled “The Merger Agreement—Conditions to the Mergers.” There can be no assurance that all of the conditions to the mergers will be so satisfied or waived. If these conditions are not satisfied or waived, Salesforce and Slack will be unable to complete the mergers. If the mergers are not completed for any reason, including the failure to receive the Slack stockholder approval, Salesforce’s and Slack’s respective businesses and financial results may be adversely affected, including as follows: Salesforce and TableauSlack may experience negative reactions from the financial markets, including negative impacts on the market price of Salesforce common stock and Slack common stock; the manner in which industry contacts, business partners and other third parties perceive Salesforce and Slack may be negatively impacted, which in turn could affect Salesforce’s and Slack’s marketing operations or their ability to compete for new business or obtain renewals in the marketplace more broadly; Salesforce and Slack may experience negative reactions from employees; and Salesforce and Slack will have expended time and resources that could otherwise have been spent on Salesforce’s and Slack’s existing businesses and the pursuit of other opportunities that could have been beneficial to each company, and Salesforce’s and Slack’s ongoing business and financial results may be subject to demands or litigation relatedadversely affected. In addition to the offer orabove risks, if the merger whetheragreement is terminated and either party’s board seeks an alternative transaction, such party’s stockholders cannot be certain that such party will be able to find a party willing to engage in a transaction on more attractive terms than the mergers. Completion of the mergers may trigger change-in-control or notother provisions in certain agreements to which Slack is a party. The completion of the mergermergers may trigger change-in-control or other provisions in certain agreements to which Slack is consummated. Such actionsa party. If Salesforce and Slack are unable to negotiate waivers of those provisions, the counterparties may create uncertainty relatingexercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages. Even if Salesforce and Slack are able to negotiate waivers, the offercounterparties may require a fee for such waivers or seek to renegotiate the merger, and respondingagreements on terms less favorable to such demands and defending such actions may be costly and distracting to management of both companies.Slack.
Risk Factors Relating to Salesforce and the CombinedSurviving Company Salesforce and the surviving company will be subject to risks arising from the ongoing COVID-19 pandemic. The COVID-19 pandemic and related public health measures have materially affected how Salesforce and its customers are operating their businesses, and have materially affected Salesforce’s operating results and cash -38-
flows; the duration and extent to which this will impact Salesforce’s and the surviving company’s future results remain uncertain. Salesforce’s operations have been, and the surviving company’s operations may be, negatively affected by a range of external factors related to the COVID-19 pandemic that are not within its control. Authorities throughout the world have implemented numerous preventative measures to contain or mitigate further spread of the virus, such as travel bans and restrictions, limitations on business activity, quarantines, work-from-home directives and shelter-in-place orders. These public health measures have caused, and are continuing to cause, business slowdowns or shutdowns in affected areas, both regionally and worldwide, which have impacted Salesforce’s and may impact the surviving company’s business and results of operations and cash flows. For example, these measures and related economic effects contributed to certain customers’ reluctance or inability to submit payments to Salesforce (as well as changes in billing frequency), and adversely impacted the effectiveness of outsourced service providers Salesforce uses to collect payments, and these conditions may persist or worsen. The extent and duration of these measures could also impact Salesforce’s and the surviving company’s ability to address cybersecurity incidents, have resulted in increased internet demand which could cause access issues, could affect Salesforce’s and the surviving company’s ability to develop and support products and services, and could cause issues with access to data centers. As Salesforce continues to monitor the situation and public health guidance, Salesforce may adjust its current policies and practices, and existing and new precautionary measures could negatively affect Salesforce’s and the surviving company’s operations. The extent of the impact of COVID-19 on Salesforce’s and the surviving company’s operational and financial performance will depend on certain developments, including the duration and spread of the pandemic, future spikes of COVID-19 infections resulting in additional preventative measures to contain or mitigate the spread of the virus, severity of the economic decline attributable to the pandemic and timing and nature of a potential economic recovery, impact on Salesforce’s and the surviving company’s customers and their sales cycles, Salesforce’s and the surviving company’s ability to generate new business leads, impact on Salesforce’s and the surviving company’s customer, employee and industry events, and effect on Salesforce’s and the surviving company’s vendors, all of which are uncertain and cannot be predicted. At this point, the extent to which the pandemic may impact Salesforce’s and the surviving company’s financial condition or results of operations, including Salesforce’s and the surviving company’s long-range plan, is uncertain. Due to Salesforce’s subscription-based business model, the effect of the COVID-19 pandemic may not be fully reflected in its results of operations until future periods. In addition, uncertainty regarding the impact of COVID-19 on Salesforce’s and the surviving company’s future operating results and financial condition may result in Salesforce and the surviving company taking cost-cutting measures, reducing the level of Salesforce’s and the surviving company’s capital investments and delaying or canceling the implementation of strategic initiatives, any of which may negatively impact their respective business and reputation. If the COVID-19 pandemic has a substantial impact on Salesforce’s or the surviving company’s employees’, partners’ or customers’ business and productivity, Salesforce’s and the surviving company’s results of operations and overall financial performance may be harmed. The global macroeconomic effects of the COVID-19 pandemic and related impacts on Salesforce’s and the surviving company’s customers’ business operations and their demand for their products and services may persist for an indefinite period, even after the COVID-19 pandemic has subsided. The integration of Slack into Salesforce may not be as successful as anticipated. The mergers involve numerous operational, strategic, financial, accounting, legal, tax and other risks, potential liabilities associated with the acquired businesses, and uncertainties related to design, operation and integration of Slack’s internal control over financial reporting. Difficulties in integrating Slack into Salesforce may result in Slack performing differently than expected, in operational challenges or in the failure to realize anticipated expense-related efficiencies. Salesforce’s and Slack’s existing businesses could also be negatively impacted by the mergers. Potential difficulties that may be encountered in the integration process include, among other factors: the inability to successfully integrate Slack into Salesforce in a manner that permits Salesforce to achieve the full revenue and cost savings anticipated from the mergers; complexities associated with managing the larger, more complex, integrated business; -39-
not realizing anticipated operating synergies; integrating personnel from the two companies and the loss of key employees; potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the mergers; integrating relationships with industry contacts and business partners; performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the mergers and integrating Slack’s operations into Salesforce; and the disruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies. Salesforce may fail to realize all of the anticipated benefits of the offer, and the mergermergers or those benefits may take longer to realize than expected. Salesforce believes that there are significant benefits and synergies that may be realized through leveraging the products, scale and combined enterprise customer bases of Salesforce and Tableau.Slack. However, the efforts to realize these benefits and synergies will be a complex process and may disrupt both companies’ existing operations if not implemented in a timely and efficient manner. The full benefits of the transactions contemplated by the merger agreement, including the anticipated sales or growth opportunities, may not be realized as expected or may not be achieved within the anticipated time frame, or at all. Failure to achieve the anticipated benefits of the transactionsmergers could adversely affect Salesforce’s results of operations or cash flows, cause dilution to the earnings per share of Salesforce, decrease or delay any accretive effect of the transactionsmergers and negatively impact the price of Salesforce common stock. Following completion of the mergers, Salesforce’s success will depend, in part, on its ability to manage its expansion, which poses numerous risks and uncertainties, including the need to integrate the operations and business of Slack into its existing business in an efficient and timely manner, to combine systems and management controls and to integrate relationships with industry contacts and business partners. In addition, Salesforce and TableauSlack will be required to devote significant attention and resources prior to closing to prepare for the post-closing integration and operation of the combinedsurviving company, and Salesforce will be required post-closing to devote significant attention and resources to successfully align the business practices and operations of Salesforce and Tableau.Slack. This process may disrupt the businesses and, if ineffective, would limit the anticipated benefits of the transaction.mergers. Salesforce and TableauSlack will incur direct and indirect costs as a result of the offer and the merger.mergers. Salesforce and TableauSlack will incur substantial expenses in connection with and as a result of completing the offer and the mergermergers, and, following the completion of the merger,mergers, Salesforce expects to incur additional expenses in connection with combining the businesses and operations of Salesforce and Tableau.Slack. Factors beyond Salesforce’s control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately. Moreover, diversion of management focus and resources from the day-to-day operation of the business to matters relating to the transactions could adversely affect each company’s business, regardless of whether the offer and the mergermergers are completed. Salesforce’sUncertainties associated with the mergers may cause a loss of management personnel and Tableau’s actual financial positionsother key employees, which could adversely affect the future business and resultsoperations of operations may differ materially from the unaudited pro forma financial information included in this document,combined company.
Salesforce and Slack are dependent on the experience and industry knowledge of their officers and other key employees to execute their business plans. Each company’s success until the mergers and the projected financial information of Tableau includedsurviving company’s success after the mergers will depend in this document is inherently subject to uncertainties. The pro forma financial information contained in this document is presented for illustrative purposes only and may differ materially from what Salesforce’s actual financial position or results of operations would have been hadpart upon the transactions been completed on the dates indicated. The pro forma financial information has been derived from the historical financial statementsability of Salesforce and Tableau,Slack to retain key management personnel and certain adjustmentsother key employees. Current and assumptions have been made regardingprospective employees of Salesforce and Slack
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may experience uncertainty about their roles within the combined company after givingfollowing the mergers, which may have an adverse effect on the ability of each of Salesforce and Slack to attract or retain key management and other key personnel. Accordingly, no assurance can be given that the combined company will be able to attract or retain key management personnel and other key employees of Salesforce and Slack to the transactions. The assets and liabilities of Tableau have been measured at fair value based on various preliminary estimates using assumptionssame extent that Salesforce management believes are reasonable utilizing information currently available. The process for estimating the fair valueand Slack have previously been able to attract or retain their own employees. Sales of acquired assets and assumed liabilities requires the usesubstantial amounts of judgment in determining the appropriate assumptions and estimates. These estimates may be revised as additional information becomes available and as additional analyses are performed. Differences between preliminary estimatesSalesforce shares in the pro forma financial informationopen market by former Slack stockholders could depress its stock price. Other than shares held by persons who will be affiliates of Salesforce after the closing, Salesforce shares that are issued to Slack stockholders, including those shares issued upon the exercise of outstanding stock options or restricted stock units, will be freely tradable without restrictions or further registration under the Securities Act. If the mergers are completed and if former Slack stockholders and Slack employees sell substantial amounts of Salesforce common stock in the final acquisition accounting will occur and could have a material impact on the pro forma financial information and the combined company’s financial position and future results of operations. In addition, the assumptions that were used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect Salesforce’s financial condition or results of operationspublic market following the
completionconsummation of the transactions. Any potential decline in Salesforce’s financial condition or results of operations may cause significant variations inmergers, the market price of Salesforce common stock. See “Unaudited Pro Forma Condensed Combined Financial Statements.”
While the projected financial information of Tableau (which we refer to as the “management projections”) included in this document is presented with numerical specificity, the management projections were based on numerous variables and assumptions that are inherently uncertain andstock may be beyond Tableau management’s control. Further, given that the management projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year beyond their preparation. Important factors that may affect actual results and may result in such projections not being achieved include: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the inability to complete the offer or merger, or the failure to satisfy other conditions to completion of the offer or the merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the completion of the merger, and risks and uncertainties pertaining to Tableau’s business, including the risks and uncertainties detailed in Tableau’s public periodic filings with the SEC. In addition, the ability to achieve the management projections may depend on, in part, whether or not the strategic goals, objectives and targets are reached over the applicable period. The assumptions upon which the management projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which Salesforce and Tableau operate, and the risks and uncertainties described in the section of this document titled “Forward-Looking Statements” and in and in “Item 8—Additional Information—Cautionary Statement Regarding Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document, all of which are difficult or impossible to predict accurately and many of which are beyond Tableau’s and our control. The management projections also reflect assumptions by Tableau management that are subject to change and are susceptible to multiple interpretations and periodic revisions based on actual results, revised prospects for the Tableau business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated when such projections were prepared. Accordingly, there can be no assurance that the management projections will be realized, and actual results may differ, and may differ materially, from those shown. For more information see “The Offer—Projected Financial Information.”decrease.
Salesforce has outstanding debt. Salesforce has outstanding debt and other financial obligations, each of which subjects Salesforce to certain risks, including, among others, increasing Salesforce’s vulnerability to general adverse economic and industry conditions, requiring Salesforce to dedicate a portion of its cash flow from operations to payments on its debt, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes, and potentially limiting Salesforce’s ability to borrow additional funds or to borrow funds at rates or on other terms it finds acceptable. The agreements governing Salesforce’s existing debt contain (and it is expected that any agreements governing any additional debt that Salesforce may incur or assume would contain) various operating covenantsto facilitate the mergers or otherwise would) impose restrictions on Salesforce and require Salesforce to maintain compliance with respect to Salesforce’s business.specified covenants. In addition, Salesforce’s existing credit facilities requirefacility requires it to comply with a maximum consolidated leverage ratio covenant, and its future credit facilities may also contain financial covenants. Any failure to comply with such restrictions may result in an event of default under such agreements. Such default may allow the applicable creditors to accelerate the related debt, which acceleration may trigger cross-acceleration or cross-default provisions in other debt. Furthermore, if future debt financing is not available when required or is not available on acceptable terms, Salesforce may be unable to grow its business, take advantage of business opportunities, respond to competitive pressures or refinance maturing debt, any of which could have a material adverse effect on its operating results and financial condition. Salesforce’s and Slack’s business relationships may be subject to disruption due to uncertainty associated with the mergers. Parties with which Salesforce or Slack do business may experience uncertainty associated with the mergers, including with respect to current or future business relationships with Salesforce or Slack. Salesforce’s and Slack’s business relationships may be subject to disruption as parties with which Salesforce or Slack do business may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than Salesforce or Slack. These disruptions could have an adverse effect on the businesses, financial condition, results of operations or prospects of each company, including an adverse effect on Salesforce’s ability to realize the anticipated benefits of the mergers. The risk, and adverse effect, of such disruptions could be exacerbated by a delay in completion of the mergers or termination of the merger agreement. -41-
Risks Related to Salesforce’s Business You should read and consider the risk factors specific to Salesforce’s business that will also affect the combinedsurviving company after the offer and the merger.closing. These risks are described in Salesforce’s Annual Report on Form 10-K for the fiscal year ended January 31, 20192020 and its Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2019,October 31, 2020, which are incorporated by reference into this document, and in other documents that are incorporated by reference into this document. See “Where to ObtainFor additional information, see the section entitled “Where You Can Find More Information” for the location of information incorporated by reference in this document.Information.” Risks Related to Tableau’sSlack’s Business You should read and consider the risk factors specific to Tableau’sSlack’s business that will also affect the combinedsurviving company after the offer and the merger.closing. These risks are described in Tableau’sSlack’s Annual Report on Form 10-K for the year ended DecemberJanuary 31, 20182020 and its Quarterly Report on Form 10-Q for the quarterly period ended MarchOctober 31, 2019,2020, which are incorporated by reference into this document, and in other documents that are incorporated by reference into this document. See “Where to ObtainFor additional information, see the section entitled “Where You Can Find More Information” for the location of information incorporated by reference in this document.Information.” -42-
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Information both includedThis proxy statement/prospectus, and incorporated by referencethe documents to which Slack and Salesforce refer you in this documentproxy statement/prospectus, as well as oral statements made or to be made by Slack and Salesforce, may contain forward-looking statements,include certain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. WordsForward-looking statements relate to future events and anticipated results of operations and business strategies, statements regarding the mergers, including the anticipated benefits of the mergers, the anticipated impact of the mergers on the combined company’s business and future financial and operating results, the expected amount and timing of synergies from the mergers, and the anticipated closing date for the proposed transaction and other aspects of operations or operating results. These forward-looking statements generally can be identified by phrases such as “will,” “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets,” variations“estimates” or other words or phrases of such wordssimilar import. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and similar expressionsfinancial condition of the combined company or the price of Salesforce or Slack stock. These forward-looking statements involve certain risks and uncertainties, many of which are intendedbeyond the parties’ control, that could cause actual results to identifydiffer materially from those indicated in such forward-looking statements, which may consist of, among other things, trend analyses and statements regarding future events, future financial performance, anticipated growth and industry prospects. These forward-looking statements are based on current expectations, estimates and forecasts, as well as the beliefs and assumptions of Salesforce’s management, and are subject to risks and uncertainties that are difficult to predict, including:including but not limited to:
the impact of public health crises, such as pandemics (including COVID-19) and epidemics and any related company or government policies and actions to protect the health and safety of individuals or government policies or actions to maintain the functioning of national or global economies and markets; the effect of the announcement of the mergers on the ability of Salesforce or Slack to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom Salesforce or Slack do business, or on Salesforce’s or Slack’s operating results and business generally; risks that the mergers disrupt current plans and operations and the potential difficulties in employee retention as a result of the mergers; the outcome of any legal proceedings related to the mergers; the ability of the parties to consummate the proposed transactionmergers on a timely basis or at all; the satisfaction of the conditions precedent to consummation of the proposed transaction,mergers, including having a sufficient number of Tableau’s shares being validly tendered into the offer to meet the minimum tender condition; the parties’ ability to secure regulatory approvals on the terms expected, at all or in a timely manner or at all;manner;
Salesforce’sthe ability of Salesforce to successfully integrate Tableau’s operations and employees;Slack’s operations;
Salesforce’sthe ability of Salesforce to implement Salesforce’sits plans, forecasts and other expectations with respect to Tableau’sSalesforce’s business after the completion of the transactionmergers and to realize expected synergies;
Salesforce’sbusiness disruption following the mergers;
the ability to realize the anticipated benefits of the transaction,mergers, including the possibility that the expected benefits from the transactionmergers will not be realized or will not be realized within the expected time period; the impact of Tableau’s business model on Salesforce’s ability to forecast revenue results; disruption from the transaction making it more difficult to maintain business and operational relationships;
the negative effects of the announcement or the consummation of the transaction on the market price of Salesforce common stock or on Salesforce’s operating results;
the amount of the costs, fees, expenses and charges related to the offer and the merger;mergers;
the risk of litigation or regulatory actions related to the transaction;
the effect of the announcement or pendency of the transaction on Tableau’s business relationships, operating results, and business generally;
the occurrence of any event, change or other circumstancescircumstance that could give rise to the termination of the merger agreement; the effect of general economic and market conditions; the impact of foreign currency exchange rate and interest rate fluctuations on Salesforce’s or Slack’s results; Salesforce’s business strategy and plan to build its business, including its strategy to be the leading provider of enterprise cloud computing applications and platforms; -43-
the pace of change and innovation in enterprise cloud computing services; the seasonal nature of Salesforce’s sales cyclescycles; the competitive nature of the market in which the parties participate; Salesforce’s or Slack’s international expansion strategy; Salesforce’s or Slack’s service performance and security, including the resources and costs required to avoid unanticipated downtime and prevent, detect and remediate potential security breaches; the expenses associated with new data centers and third-party infrastructure providers; additional data center capacity; real estate and office facilities space; Salesforce’s operating results and cash flows; new services and product features; Salesforce’s or Slack’s strategy of acquiring or making investments in complementary businesses, joint ventures, services, technologies and intellectual property rights; the performance and fair value of Salesforce’s investments in complementary businesses through Salesforce’s strategic investment portfolio; Salesforce’s or Slack’s ability to realize the benefits from strategic partnerships and investments; the impact of future gains or losses from Salesforce’s strategic investment portfolio, including gains or losses from overall market conditions that may affect the publicly traded companies within Salesforce’s strategic investment portfolio; Salesforce’s or Slack’s ability to execute its business plans; Salesforce’s ability to successfully integrate acquired businesses and technologies; Salesforce’s ability to continue to grow unearned revenue and remaining performance obligation;obligations; Salesforce’s or Slack’s ability to protect its intellectual property rights; Salesforce’s or Slack’s ability to develop its brands; Salesforce’s or Slack’s reliance on third-party hardware, software and platform providers; Salesforce’s dependency on the development and maintenance of the infrastructure of the Internet; the effect of evolving domestic and foreign government regulations, including those related to the provision of services on the Internet, those related to accessing the Internet, and those addressing data privacy, cross-border data transfers and import and export controls; the valuation of Salesforce’s deferred tax assets; the potential availability of additional tax assets in the future; the impact of new accounting pronouncements and tax laws; uncertainties affecting Salesforce’s ability to estimate its tax rate; the impact of expensing stock options and other equity awards; the sufficiency of Salesforce’s capital resources; factors related to Salesforce’s senior notes due 2023 and 2028, revolving credit facility, term loan due 2021 and loan associated with 50 Fremont Street in San Francisco, California;
compliance with Salesforce’s or Slack’s debt covenants and lease obligations; current and potential litigation involving Salesforce or Tableau;Slack; and the impact of climate change; andchange. -44-
other risksAll of the forward-looking statements Salesforce and Slack make in this proxy statement/prospectus are qualified by the information contained or incorporated by reference herein, including the information contained in this section and the information detailed in Salesforce’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 and Salesforce’s Quarterly Reports on Form 10-Q for the quarterly periods ended April 30, 2020, July 31, 2020 and October 31, 2020, Current Reports on Form 8-K and other filings Salesforce makes with the SEC, (see “Where to Obtain More Information”).
Thesewhich are incorporated herein by reference, and in Slack’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 and Slack’s Quarterly Reports on Form 10-Q for the quarterly periods ended April 30, 2020, July 31, 2020 and October 31, 2020, Current Reports on Form 8-K and other risksfilings Slack makes with the SEC, which are incorporated herein by reference. For additional information, see the sections entitled “Risk Factors” and uncertainties may cause Salesforce’s actual results to differ materially and adversely from those expressed in any forward-looking statements. Readers are directed to risks and uncertainties identified above under “Risk Factors” and elsewhere in this document for additional detail regarding factors that may cause actual results to be different from those expressed in Salesforce’s forward-looking statements. “Where You Can Find More Information.”
Except as required by law, neither Salesforce nor Slack undertakes noor assumes any obligation to revise or update publicly any forward-looking statements, for any reason. Allwhether as a result of new information or to reflect subsequent events or circumstances or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. All subsequent written and oral forward-looking statements attributable to Salesforce or any person acting on Salesforce’s behalf are qualified by the cautionary statements in this section.hereof. -45-
INFORMATION ABOUT THE COMPANIES Salesforce salesforce.com, inc. Salesforce Tower 415 Mission Street, 3rd Floor San Francisco, California 94105 Phone: (415) 901-7000 Salesforce, a Delaware corporation, is a global leader in customer relationship management, or CRM, technology that brings companies and customers together. Founded in 1999, Salesforce enables companies to improve their relationships and interactions with customers. Salesforce introduced its first CRM solution in 2000, and has since expanded its service offerings into new areas and industries with new editions, features and platform capabilities. Salesforce’s core mission is to empower its customers of every size and industry to connect with their customers in new ways through existing and emerging technologies, including cloud, mobile, social, Internet of Thingsblockchain, voice and artificial intelligence.intelligence, to transform their businesses. Salesforce’s Customer Success Platform—including360 is an integrated platform that unites sales, force automation, customer service, marketing, commerce, integration, analytics and support, marketing automation, digital commerce, community management, industry-specific solutions, analytics, integration solutions, application development, Internetmore to give companies a single source of Things integration, collaborative productivitytruth about their customers. Salesforce’s service offerings are designed to be intuitive and easy to use. They can generally be deployed quickly, configured easily and integrated with other platforms and enterprise applications. Salesforce sells to businesses worldwide primarily on a subscription basis, through direct sales efforts and also indirectly through partners. Through Salesforce’s platform and other developer tools, its AppExchange,Salesforce also enables third parties to develop additional functionality and new applications, or apps that run on Salesforce’s platform, which is its enterprise cloud marketplace, and its professional cloud services—provides the tools customers need to succeedare sold separately from—or in a digital world.conjunction with—Salesforce’s service offerings. Merger Sub I Skyline Strategies I Inc. c/o salesforce.com, inc. Salesforce common stock is traded on the NYSE under the ticker symbol “CRM.”Tower The address of Salesforce’s principal executive offices is Salesforce Tower, 415 Mission Street, 3rd Floor
San Francisco, California 94105. Salesforce’s telephone number is94105 Phone: (415) 901-7000. Salesforce also maintains an Internet site at www.salesforce.com. Salesforce’s website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.901-7000 The Offeror
The Offeror,Merger Sub I, a Delaware corporation, is an indirecta wholly owned subsidiary of Salesforce. The OfferorMerger Sub I is newly formed, and was organized for the purpose of makingentering into the offermerger agreement and consummatingeffecting the first merger. The OfferorMerger Sub I has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the offer and the merger. The Offeror’s address is mergers.
Merger Sub II Skyline Strategies II LLC c/o salesforce.com, inc., Salesforce Tower 415 Mission Street, 3rdFloor San Francisco, California 94105 telephone number Phone: (415) 901-7000.901-7000 Merger Sub II, a Delaware limited liability corporation, is a wholly owned subsidiary of Salesforce. Merger Sub II is newly formed, and was organized for the purpose of entering into the merger agreement and effecting the second merger. Merger Sub II has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the mergers. -46-
Slack Slack Technologies, Inc. 500 Howard Street San Francisco, California 94105 Phone: (415) 630-7943 Slack, whose legal name is Slack Technologies, Inc., has transformed business communication. It’s the leading channel-based messaging platform, used by millions to align their teams, unify their systems, and drive their businesses forward. Only Slack offers a secure, enterprise-grade environment that can scale with the largest companies in the world. It is a new layer of the business technology stack where people can work together more effectively, connect all their other software tools and services, and find the information they need to do their best work. Slack is where work happens. Slack was originally incorporated in Delaware in 2009 as Tiny Speck, Inc. In 2014, the company changed its name to Slack Technologies, Inc. and publicly launched its current offering. Slack is headquartered in San Francisco, California. -47-
TableauSPECIAL MEETING OF SLACK STOCKHOLDERS
Tableau,Date, Time and Place
The Slack special meeting will be held virtually via the Internet on , 2021 at , Pacific Time. The Slack special meeting will be held solely via live webcast and there will not be a Delaware corporation, putsphysical meeting location. Slack stockholders will be able to attend the powerSlack special meeting online and vote their shares electronically during the meeting by visiting the Slack special meeting website at www.virtualshareholdermeeting.com/WORK2021SM. Slack stockholders will need the 16-digit control number found on their proxy card in order to access the Slack special meeting website. Purpose of data into the handsSlack Special Meeting The purpose of everyday people with its software products, allowing a broad populationthe Slack special meeting is to consider and vote on: the non-binding compensation advisory proposal. Slack will transact no other business at the Slack special meeting. Recommendation of the Slack Board The Slack board unanimously recommends that Slack stockholders vote: “FOR” the merger proposal; and “FOR” the non-binding compensation advisory proposal. For additional information on the recommendation of the Slack board, see the section entitled “The Mergers—Recommendation of the Slack Board and Reasons for the Mergers.” Record Date and Outstanding Shares of Slack Common Stock Only holders of record of issued and outstanding shares of either class of Slack common stock as of the close of business userson , 2021, the record date for the Slack special meeting, are entitled to engage with their data, ask questions, solve problemsnotice of, and create value. Basedto vote at, the Slack special meeting via the Slack special meeting website or any adjournment or postponement of the Slack special meeting. As of the close of business on core technologies originally developedthe record date, there were shares of Slack Class A common stock and shares of Slack Class B common stock outstanding and entitled to vote at Stanford University, Tableau’s products reduce the complexity, inflexibility and expense associated with traditional business intelligence applications. Tableau currently offers five key products: Tableau Desktop, a self-service, powerful analytics product for anyone with data; Tableau Server, a business intelligence platform for organizations; Tableau Online, a hosted software-as-a-service (“SaaS”) versionSlack special meeting. Each share of Tableau Server; Tableau Prep, a data preparation product for combining, shaping and cleaning data; and Tableau Public, a free cloud-based platform for analyzing and sharing public data. Tableau Class A common stock is listedentitled to one vote on the NYSE under the ticker symbol “DATA.” The Tableaueach proposal and each share of Class B common stock is entitled to 10 votes on each proposal.
A complete list of Slack stockholders entitled to vote at the Slack special meeting will be available for inspection at Slack’s principal place of business during regular business hours for a period of no less than 10 days before the Slack special meeting at 500 Howard Street, San Francisco, California 94105. If Slack’s headquarters are closed for health and safety reasons related to the COVID-19 pandemic during such period, the list of Slack stockholders will be made available for inspection upon request to Slack’s corporate secretary at 500 Howard Street, San Francisco, California 94105, subject to the satisfactory verification of stockholder status. The list of Slack stockholders entitled to vote at the Slack special meeting will also be made available for inspection during the Slack special meeting via the Slack special meeting website at www.virtualshareholdermeeting.com/WORK2021SM. -48-
Quorum; Abstentions and Broker Non-Votes A quorum of Slack stockholders is necessary to hold a valid meeting. The presence at the Slack special meeting, in person (including via the Slack special meeting website) or by proxy, of the holders of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote at the Slack special meeting constitutes a quorum. Abstentions, withhold votes, and broker non-votes are counted as shares present and entitled to vote for the purposes of determining a quorum. Required Vote Approval of the merger proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” the proposal. Failure to vote on the merger proposal will have the same effect as a vote “AGAINST” the merger proposal. Approval of the non-binding compensation advisory proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock present via the Slack special meeting website or represented by proxy at the Slack special meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal, and broker non-votes will have no effect on the outcome of the vote. The merger proposal and non-binding compensation advisory proposal are described in the section entitled “Slack Proposals.” Methods of Voting Slack stockholders of record may vote their shares in four ways: by Internet at www.proxyvote.com 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on , 2021 (have your Notice or proxy card in hand when you visit the website); by toll-free telephone at 1-800-690-6903, until 11:59 p.m. Eastern Time on , 2021 (have your Notice or proxy card in hand when you visit the website); by completing and mailing your proxy card; or by Internet during the Annual Meeting. Instructions on how to attend and vote at the Annual Meeting are described at www.virtualshareholdermeeting.com/WORK2021SM. In order to be counted, proxies submitted by telephone or Internet must be received by 11:59 p.m. Eastern Time on , 2021. Proxies submitted by U.S. mail must be received before the start of the Slack special meeting. If you are a street name stockholder, please follow the instructions from your broker, bank, or other nominee to vote by Internet, telephone, or mail before the meeting, or by Internet during the Slack special meeting, in each case by using the 16-digit control number, which is in the instructions accompanying your proxy materials, if your broker, bank, or nominee makes those instructions available. Voting via the Slack Special Meeting Website Shares held directly in your name as stockholder of record may be voted at the Slack special meeting via the Slack special meeting website. If you choose to virtually attend the Slack special meeting website and vote your shares at the meeting via the Slack special meeting website, you will need the 16-digit control number included on your proxy card. -49-
If you are a beneficial holder, you will need to obtain a specific control number from your broker, bank or other nominee holder of record giving you the right to vote the shares. Even if you plan to virtually attend the Slack special meeting, the Slack board recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not publicly traded but converts,to attend the Slack special meeting. Voting by Proxy You may direct your vote by proxy without virtually attending the Slack special meeting. You can vote by proxy by phone, the Internet or mail by following the instructions provided in the enclosed proxy card. If you are a street name stockholder, please follow the instructions from your broker, bank, or other nominee to vote by Internet, telephone, or mail before the meeting, or by Internet during the Slack special meeting, in each case by using the 16-digit control number, which is in the instructions accompanying your proxy materials, if your broker, bank, or nominee makes those instructions available. Questions About Voting If you have any questions about how to vote or direct a vote in respect of your shares of Slack common stock, you may contact MacKenzie Partners, Inc., Slack’s proxy solicitor, toll-free at (800) 322-2885, or for brokers and banks, collect at (212) 929-5500 or via email at proxy@mackenziepartners.com. Adjournment In accordance with the Slack bylaws, whether or not a quorum is present, the chairman of the Slack special meeting will have the power to adjourn the Slack special meeting from time to time, without notice other than announcement at the meeting. If the Slack special meeting is adjourned, Slack stockholders who have already submitted their proxies will be able to revoke them at any time prior to their use. At any subsequent reconvening of the Slack special meeting, all proxies will be voted in the same manner as the manner in which such proxies would have been voted at the original convening of the Slack special meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent meeting. In addition, the merger agreement provides that Slack may adjourn or postpone the Slack special meeting (i) after consultation with Salesforce, to the extent necessary to ensure that any supplement or amendment to this proxy statement/prospectus that is required by applicable law is provided to the Slack stockholders within a reasonable amount of time in advance of the Slack special meeting or (ii) if, as of the time the Slack special meeting is scheduled, there are not sufficient affirmative votes in person or proxy at the Slack special meeting to constitute a quorum or to obtain the approval of the merger proposal; provided that Slack will only be permitted to effect one such adjournment or postponement under the circumstances described in clause (ii). If requested by Salesforce under the circumstances described in clause (ii), Slack will be required to adjourn or postpone the special meeting once for a period of up to 10 business days. However, the Slack special meeting will not be adjourned or postponed if it would require a change in the record date. Revocability of Proxies If you are a stockholder of record, you can change your vote or revoke your proxy by: notifying Slack’s Corporate Secretary, in writing, at Slack Technologies, Inc., 500 Howard Street, San Francisco, California 94105. Such notice must be received at the above location before 11:59 p.m. Eastern Time on , 2021; voting again using the telephone or Internet before 11:59 p.m. Eastern Time on , 2021 (your latest telephone or Internet proxy is the one that will be counted); or -50-
attending and voting during the Slack special meeting. Simply logging into the Slack special meeting will not, by itself, revoke your proxy. In light of shelter-in-place restrictions currently in place due to COVID-19, stockholders are encouraged to change their vote by voting again using the telephone or Internet. If you are a one-for-one basis,street name stockholder, you may revoke any prior voting instructions by contacting your broker, bank or other nominee or by attending the Slack special meeting and voting by Internet during the meeting by using the 16-digit control number, which is in the instructions accompanying your proxy materials, if your broker, bank, or nominee makes those instructions available. Proxy Solicitation Costs The enclosed proxy card is being solicited by Slack and the Slack board. In addition to solicitation by mail, Slack’s directors, officers and employees may solicit proxies in person, by phone or by electronic means. These persons will not be specifically compensated for conducting such solicitation. Slack has retained MacKenzie Partners to assist in the solicitation process. Slack will pay MacKenzie Partners a fee of approximately $20,000, as well as reasonable and customary documented expenses. Slack also has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Slack will ask brokers, banks and other nominees to forward the proxy solicitation materials to the beneficial owners of shares of Slack common stock held of record by such nominee holders. Slack will reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners. Appraisal Rights Pursuant to Section 262 of the DGCL, holders of Slack common stock who hold their shares through the first effective time, do not vote their shares in favor of adoption of the merger agreement and who comply fully with and properly demand appraisal for their shares under the applicable requirements of Section 262 of the DGCL and do not otherwise withdraw or lose the right to appraisal under Delaware law, have the right to seek appraisal of the fair value of their shares of Slack common stock, as determined by the Delaware Court of Chancery, if the first merger is completed. The “fair value” of shares of Slack common stock as determined by the Delaware Court of Chancery may be more than, less than, or equal to the value of the merger consideration that Slack stockholders would otherwise be entitled to receive under the terms of the merger agreement. Slack stockholders also should be aware that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the first merger, is not an opinion as to, and does not otherwise address, “fair value” under Section 262 of the DGCL. Holders of Slack common stock who wish to preserve any appraisal rights they may have, must so advise Slack by submitting a written demand for appraisal prior to the vote to adopt the merger agreement and approve the transactions contemplated thereby, and must otherwise follow fully the procedures prescribed by Section 262 of the DGCL. Other Information The matters to be considered at the Slack special meeting are of great importance to the Slack stockholders. Accordingly, you are urged to read and carefully consider the information contained in or incorporated by reference into Tableauthis proxy statement/prospectus and submit your proxy by phone or the Internet or complete, date, sign and promptly return the enclosed proxy card in the enclosed postage-paid envelope. If you submit your proxy by phone or the Internet, you do not need to return the enclosed proxy card. -51-
Assistance If you need assistance in completing your proxy card or have questions regarding the Slack special meeting, contact:
MacKenzie Partners, Inc. 1407 Broadway, 27th Floor New York, New York 10018 (800) 322-2885 Banks and Brokers: (212) 929-5500 Email: proxy@mackenziepartners.com Vote of Slack’s Directors and Executive Officers As of December 16, 2020, Slack directors, executive officers, and their respective affiliates, as a group, beneficially held and were entitled to vote 7,688,272 shares of Slack Class A common stock and 82,661,892 shares of Class B common stock, representing 62.8% of the voting power of Slack common stock, including the shares covered by voting agreements in favor of Stewart Butterfield. Slack currently expects that all of its directors and executive officers will vote their shares “FOR” the merger proposal and “FOR” the non-binding compensation advisory proposal. Attending the Slack Special Meeting Virtually You are entitled to attend the Slack special meeting only if you were a stockholder of record of Slack at the electionclose of business on the record date or you held your shares of Slack beneficially in the name of a broker, bank or other nominee as of the holderrecord date, or you hold a valid proxy for the Slack special meeting. If you were a stockholder of record of Slack at the close of business on the record date and in some cases automatically upon certain transfers as provided in Tableau’s certificatewish to attend the Slack special meeting, you will need the 16-digit control number located on your proxy card. If a broker, bank or other nominee is the record owner of incorporation.your shares of Slack common stock, you will need to obtain your specific control number and further instructions from your bank, broker or other nominee. The addressResults of Tableau’s principal executive offices is 1621 North 34th Street, Seattle, Washington 98103. Tableau’s telephone number is (206) 633-3400. Tableau also maintainsthe Slack Special Meeting
Within four business days following the Slack special meeting, Slack intends to file the final voting results with the SEC on a Current Report on Form 8-K. If the final voting results have not been certified within that four-business day period, Slack will report the preliminary voting results on a Current Report on Form 8-K at that time and will file an Internet site at www.tableau.com. Tableau’s website andamendment to the information contained therein or connected thereto shall not be deemedCurrent Report on Form 8-K to be incorporated herein, and you should not rely on any such information in making an investment decision.report the final voting results within four days of the date that the final results are certified. SLACK STOCKHOLDERS SHOULD CAREFULLY READ THIS PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER PROPOSAL AND THE NON-BINDING COMPENSATION ADVISORY PROPOSAL. -52-
SLACK PROPOSALS Merger Proposal It is a condition to the completion of the mergers that Slack stockholders approve the merger proposal. In the first merger, each Slack stockholder will receive, for each eligible share of Slack common stock that is issued and outstanding as of immediately prior to the first effective time, the merger consideration of 0.0776 shares of Salesforce common stock and $26.79 in cash, without interest, further described in the sections entitled “The Mergers—Consideration to Slack Stockholders” and “The Merger Agreement—Merger Consideration.” The approval by such stockholders of this proposal is required by Section 251 of the DGCL and is a condition to the completion of the mergers. Approval of the merger proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” the merger proposal. Failure to vote on the merger proposal will have the same effect as a vote “AGAINST” the merger proposal. The Slack board unanimously recommends a vote “FOR” the merger proposal. Non-Binding Compensation Advisory Proposal As required by Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, which were enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, Slack is required to provide its stockholders the opportunity to vote to approve, on a non-binding, advisory basis, certain compensation that may be paid or become payable to Slack’s named executive officers that is based on or otherwise relates to the mergers, as described in the section entitled “The Mergers—Merger-Related Compensation.” Accordingly, Slack stockholders are being provided the opportunity to cast an advisory vote on such payments. As an advisory vote, this proposal is not binding upon Slack or the Slack board or Salesforce or the Salesforce board, and approval of this proposal is not a condition to completion of the mergers and is a vote separate and apart from the merger proposal. Accordingly, you may vote to approve the merger proposal and vote not to approve the non-binding compensation advisory proposal and vice versa. Because the merger-related executive compensation to be paid in connection with the mergers is based on the terms of the merger agreement as well as the contractual arrangements with Slack’s named executive officers, such compensation will be payable, regardless of the outcome of this advisory vote, if the merger proposal is approved (subject only to the contractual conditions applicable thereto). However, Slack seeks the support of its stockholders and believes that stockholder support is appropriate as the executive compensation programs are designed to incentivize executives to successfully execute a transaction such as that contemplated by the merger proposal from its early stages until consummation. Accordingly, holders of shares of Slack common stock are being asked to vote on the following resolution: RESOLVED, that the stockholders of Slack Technologies, Inc. approve, on an advisory, non-binding basis, certain compensation that may be paid or become payable to the named executive officers of Slack Technologies, Inc. that is based on or otherwise relates to the mergers, as disclosed pursuant to Item 402(t) of Regulation S-K under the section entitled “The Mergers—Merger-Related Compensation.” Approval of the non-binding compensation advisory proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock present via the Slack special meeting website or represented by proxy at the Slack special meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal, and broker non-votes will have no effect on the outcome of the vote. The Slack board unanimously recommends a vote “FOR” the non-binding compensation advisory proposal. -53-
THE OFFERMERGERS This discussion of the mergers is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement/prospectus as Annex A and incorporated by reference herein in its entirety. You should read the entire merger agreement carefully as it is the legal document that governs the mergers. GeneralTransaction Structure
Salesforce, throughThe merger agreement provides for two mergers: (a) Merger Sub I will be merged with and into Slack, with Slack continuing as the Offeror, which is an indirectsurviving corporation in the first merger and as a wholly owned subsidiary of Salesforce is offeringand (b) immediately following the first merger, Slack, as the surviving corporation in the first merger, will be merged with and into either: (i) if a revised structure notice has not been delivered by Salesforce before the closing, Merger Sub II, with Merger Sub II continuing as a wholly owned subsidiary of Salesforce, or (ii) if a revised structure notice has been delivered by Salesforce before the closing, Salesforce, with Salesforce surviving the second merger.
Pursuant to exchange forthe merger agreement, Salesforce may elect the alternative transaction structure upon delivering a revised structure notice to Slack in the event that 10 business days before the closing, Salesforce and the trustee under the convertible notes indenture have not each outstandingexecuted a supplemental indenture to the convertible notes indenture amending the terms thereof to permit the consummation of the second merger with Merger Sub II at the second effective time without giving rise to a breach of, or any default under, any provision of the convertible notes indenture. Upon delivery of the revised structure notice, the structure of the second merger will be modified to consist of Slack, as the surviving corporation in the first merger, merging with and into Salesforce, with Salesforce continuing as the surviving company. Consideration to Slack Stockholders As a result of the first merger, each eligible share of Tableau Class ASlack common stock issued and Tableau Class B common stock validly tenderedoutstanding immediately prior to the first effective time will be automatically cancelled and not validly withdrawn inconverted into the offer, 1.103right to receive (a) 0.0776 shares of Salesforce common stock, with cash in lieu of any fractional shares of Salesforce common stock, and (b) the right to receive $26.79 in cash, without interest and subject to reduction for any applicable withholding taxes.interest. Tableau stockholdersSalesforce will not receive anyissue fractional shares of Salesforce common stock in the offer or the merger, andfirst merger. Instead, each Tableau stockholderholder of Slack common stock who otherwise would be entitled to receive a fraction of a sharefractional shares of Salesforce common stock pursuant to the offer or the merger(after aggregating all shares of such holder) will be paidentitled to an amount in cash, (without interest)without interest, equal to such fractional partfraction of a share of Salesforce common stock multiplied by the volume weighted average closing sale price of one share of Salesforce common stock as reported on the NYSE for the ten consecutive trading days ending on and including the trading day immediately preceding the acceptance of tendered Tableau shares in the offer,$260.50, rounded to the nearest whole cent. See “Merger Agreement—Fractional Shares.”
The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares, and the merger is the second step in such plan. If the offer is completed, validly tendered (and not validly withdrawn) Tableau shares will be exchanged for the transaction consideration, and if the merger is completed, any remaining Tableau shares that were not tendered into the offer (other than certain converted or cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. If the offer is completed, Salesforce intends to promptly consummate the merger as the second step in such plan. The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer. Upon consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former Tableau stockholders will no longer have any direct ownership interest in the surviving corporation.
Background of the Offer and the MergerMergers The Schedule 14D-9 includes additional information onSlack board, together with Slack’s senior management, regularly reviews and assesses Slack’s performance, share price, risks, opportunities and strategy in light of the background, deliberationscurrent business and economic environment, as well as evolving industry dynamics, as they may affect Slack’s long-term strategic goals and plans. As a matter of practice, the Slack board and Slack’s senior management, together with their professional advisors, regularly review and evaluate a wide range of strategic opportunities for business combinations, acquisitions and other activities involving Tableau (see the section titled “Backgroundfinancial and strategic alternatives for Slack, including continuing as a standalone company, with a view to maximizing stockholder value. The Salesforce board of the Offer and the Merger” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableaudirectors, together with this document). You are encouraged to read that section in its entirety. Membersmembers of Salesforce’s management team, regularly consider and pursue opportunities to enhance Salesforce’s product suite, improve customer satisfaction and unlock stockholder value. In this regard, members of Salesforce’s management team have reviewed and discussed business, operational and strategic plans to enhance and complement Salesforce’s existing product
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suite in light of the current business and economic environment, as well as evolving industry dynamics. As part of Salesforce’s ongoing evaluation of such opportunities, Salesforce’s senior management identified Slack as a potential candidate for a strategic transaction with Salesforce. Over the past several years, as part of Slack’s and Salesforce’s existing commercial relationships, Mr. Stewart Butterfield, Slack’s Chief Executive Officer, and other representatives of Slack, on the one hand, and Mr. Bret Taylor, Salesforce’s President and Chief Operating Officer, and other representatives of Salesforce, on the other hand, have had discussions from time to address the needs articulated by Salesforce customers, includingtime to better leverage data (regardlessunderstand each other’s respective businesses, platforms and products, and to explore various ways in which they could collaborate in order to advance their shared business objectives. Prior to August 2020, none of where it resides) to make smarterthe discussions between representatives of Slack and faster decisions and create differentiated connected customer experiences.Salesforce involved the possibility of an acquisition of Slack. In early December 2018,furtherance of Slack’s strategic priorities, in March 2020, Mr. Butterfield met with Mr. Taylor and indicated that Slack was interested in acquiring Quip from Salesforce. Slack’s indication of interest did not progress into negotiations between the parties, and there were no further developments with respect to Slack’s interest in acquiring Quip through August 27, 2020. On August 27, 2020, in connection with Salesforce’s regular and ongoing consideration and evaluation of strategic opportunities, Mr. Taylor contacted Mr. Butterfield by phone and indicated that, while Salesforce was not interested in selling Quip, Salesforce had been contemplating possible ways in which the companies could work together in the future. During this conversation and two subsequent phone calls on September 1, 2020 and September 3, 2020, Mr. Taylor raised the possibility of a potential acquisition of Slack. No purchase price or other material terms were discussed by Mr. Taylor and Mr. Butterfield during these conversations. Subsequent to such discussions, senior executives at Salesforce had numerous internal discussions regarding a potential acquisition of Slack. On September 7, 2020, Mr. Butterfield reported his conversation with Mr. Taylor to members of the Slack board. Following discussion, the Slack board authorized Mr. Butterfield to further pursue discussions with Salesforce regarding a potential acquisition of Slack, including the provision of high priority diligence information subject to entry into a customary confidentiality agreement. On September 9, 2020, Ms. Amy Weaver, Salesforce’s President and Chief Legal Officer, and Mr. John Somorjai, Salesforce’s Executive Vice President, Corporate Development & Salesforce Ventures, contacted Adam Selipsky,Mr. David Schellhase, Slack’s General Counsel, by email to circulate a draft confidentiality agreement in connection with continuing the discussion of a potential acquisition of Slack. On September 10, 2020, Slack and Salesforce entered into a confidentiality agreement to explore a business opportunity of mutual interest. Also on September 10, 2020, Mr. Butterfield spoke with Mr. Taylor about Salesforce’s interest in a potential acquisition of Slack. No purchase price or other material terms were discussed by Mr. Taylor and Mr. Butterfield. On September 11, 2020, Mr. Butterfield spoke with Mr. Marc Benioff, Salesforce’s Chair and Chief Executive Officer, about Salesforce’s interest in a potential acquisition of Tableau,Slack. No offer to arrange a meeting. acquire Slack was made by Mr. Benioff, and no purchase price or other material terms were discussed by Mr. Benioff and Mr. Butterfield. On December 6, 2018,September 14, 2020, Salesforce provided Slack with an initial list of high priority diligence requests related to Slack’s business, and Mr. SelipskyButterfield, Mr. Schellhase and Jay Peir, Executive Vice President, Corporate Development & Strategy of Tableau,Mr. Allen Shim, Slack’s Chief Financial Officer, met with Mr. Taylor, Mr. Somorjai, Bret Taylor, Chief Product OfficerMs. Weaver and a representative of Salesforce, and Alex Dayon, President and Chief Strategy Officer of Salesforce. At this meeting, representatives of Salesforce and Tableau discussedBofA Securities, Inc., -55-
Salesforce’s financial advisor in connection with the changing technology landscape and the data analytics industry generally. As part of these discussions, representatives of Tableau and Salesforce explored, at a high level, possible ways that the companies could work together in the future. In the course of those discussions, representatives of Tableau gave Salesforce’s representatives an overview of Tableau’s businesses and products. However, they did not exchange any non-public information orpotential transaction (which we refer to as “BofA Securities”), to discuss a potential strategic transaction.acquisition of Slack, including the agenda for a preliminary due diligence meeting the following day. Also on September 14, 2020, the Slack board convened for a special meeting via videoconference, and Mr. Butterfield provided an update to the Slack board on the possible acquisition of Slack by Salesforce. On December 10, 2018,September 15, 2020, members of Slack senior management held preliminary due diligence discussions in which high-level diligence information was exchanged with members of Salesforce senior management and representatives of BofA Securities. On September 16, 2020, the Mergers and Acquisitions Committee of the Salesforce board of directors (which we refer to as the “M“Salesforce M&A Committee”) held a regularly scheduled meeting via videoconference to discuss and review, among other things, the possible acquisition of Tableau and recommended that management briefSlack. After discussions, the Salesforce board of directors on a potential transaction. On December 11, 2018, at a regularly scheduledmeeting of the Salesforce board of directors,Marc Benioff, the Chairman and Co-Chief Executive Officer of Salesforce, and Keith Block, the Co-Chief Executive Officer of Salesforce, provided an update to the Salesforce board of directors regarding Salesforce’s merger and acquisitions strategy, including a potential acquisition of Tableau.
On December 18, 2018, Mr. Benioff and Mr. Selipsky met to discuss various matters in the technology industry generally and, as a follow up to the December 6 meeting, discussed possible ways that the companies could work together in the future. During this meeting, Mr. Selipsky described Tableau’s culture and products, but did not provide any non-public information. During the course of the conversations, Mr. Benioff raised the possibility of a strategic transaction between Tableau and Salesforce, expressing that a transaction could present a potentially compelling opportunity for the two companies. Mr. Selipsky told Mr. Benioff that he would convey Salesforce’s interest to the Tableau board of directors.
In early January 2019, Mr. Benioff contacted Mr. Selipsky to indicate that Salesforce would like to discuss a potential strategic combination with Tableau in more detail. Mr. Selipsky told Mr. Benioff that he would convey Salesforce’s interest to the Tableau Board.
On February 12, 2019, the M&A committee met to discuss and review the business, prospects and potential for an acquisition of Tableau andCommittee authorized management to continue to pursue negotiations with TableauSlack and to submit a non-bindingproposal to acquire Tableau.Slack for a price of $35.00 per share, with 40% of the consideration to be Salesforce common stock and 60% of the consideration to be cash. At the invitation of the Salesforce M&A Committee, members of Salesforce management, and representatives of BofA Securities Inc. (“BofA Merrill Lynch”), Salesforce’s exclusive financial advisor in connection with the potential transaction, and representatives of Wachtell, Lipton, Rosen & Katz (“Wachtell(which we refer to as “Wachtell Lipton”), Salesforce’s outside legal counsel in connection with the potential transaction, attended the meeting.
On February 12, 2019, Salesforce submittedSeptember 16, 2020, Mr. Taylor and Mr. Somorjai delivered to TableauMr. Butterfield a non-binding written proposal offering to acquire allSlack at a price per share of the outstanding Tableau securities for $157 per share. The proposal indicated a preference for 100%$35.00, with 40% of the consideration to be Salesforce common stock althoughand 60% of the consideration to be cash (although Salesforce indicated an openness to discussing a different mix of cash and stock if preferred by the TableauSlack board). Later that same day, the Slack board of directors. Thediscussed the proposal indicatedwith senior management. Following discussion, the Slack board unanimously concluded that the exchange ratio for consideration would be fixed, based onprice per share in the unaffected trailing five-day volume weighted average trading share price of theSeptember 16 offer was not compelling enough to warrant further engagement with Salesforce common stock (the “5-day VWAP”).or a change in Slack’s plans to continue to operate as a standalone company. The proposal also noted Salesforce’s expectation that Tableau’s founders would agreeSlack board instructed senior management to support the transaction, and that the offer would not be subject to a vote ofinform Salesforce stockholders in connection with the proposed transaction. The proposal also indicated that Salesforce viewed the Tableau management team as important to the success of the combination and, at the appropriate time and with the consent of the Tableau board of directors, Salesforce would like to engage in discussions with the management team related to their retention and reporting structures. On February 15, 2019, Mr. Selipsky conveyed to Mr. Benioff the position of the Tableau board of directors that any offer for a strategic combination would need to be significantly higher to warrant further engagement, and they agreed that further discussion between the companies’ representatives and advisors would be helpful.engagement.
On February 18, 2019,September 17, 2020, at a regularly scheduled meeting of the Salesforce board of directors held via videoconference, with members of Salesforce management also in attendance, Mr. Taylor and Mr. Somorjai provided an update to the Salesforce board of directors regarding Salesforce’s merger and acquisition strategy, including a potential acquisition of Slack. At the invitation of the Salesforce board of directors, representatives of BofA Merrill Lynch contactedSecurities attended the meeting. On September 17, 2020, Mr. Butterfield called Mr. Taylor to convey the Slack board’s position. On September 21, 2020, Mr. Taylor called Mr. Butterfield to discuss Salesforce’s proposal and conveyed Salesforce’s continued interest in a potential acquisition of Slack. On September 26, 2020, the Slack board held a special meeting via videoconference with senior management and representatives of Qatalyst Partners LP (which we refer to as “Qatalyst Partners”) present at the invitation of the Slack board. Mr. Butterfield updated the Slack board on his conversations with Salesforce executives about a possible acquisition. Representatives of Qatalyst Partners led a discussion regarding Slack’s current valuation, prospects for growth and for improved valuation, certain market and financial perspectives, Salesforce’s prior acquisition activity, how a negotiation with Salesforce was likely to unfold, other potential acquirers and related matters. After discussion, the Slack board concluded that Slack should continue discussions with Salesforce and determined to have Mike McNamara, John O’Farrell and Graham Smith, all of whom are nonexecutive, independent directors, constitute a special strategic transaction committee of Slack’s board (which we refer to as the “Slack committee”) and be available to assist Mr. Butterfield and the Slack board on matters associated with a possible strategic transaction, and to select financial advisors and negotiate the terms of the financial advisor engagements. -56-
On September 27, 2020, the Slack board held a special meeting via videoconference with senior management and representatives of Goldman Sachs & Co. LLC (which we refer to discussas “Goldman Sachs”) present at the invitation of the Slack board. At the direction of the Slack board, representatives of Goldman Sachs led a discussion regarding Slack’s current valuation, prospects for growth and improved valuation, certain market and financial perspectives, Salesforce’s prior acquisition activity, how a negotiation with Salesforce was likely to unfold, other potential acquirers and related matters. On September 28, 2020, the Slack committee held a meeting via videoconference with senior management and a representative of Goodwin Procter LLP, Slack’s outside legal counsel (which we refer to as “Goodwin”) present. The Slack committee reviewed and discussed potential financial advisor choices, relevant qualifications (including previous sell-side engagements opposite Salesforce and the merits of retaining two financial advisors), senior management’s recommendation following the meetings with the potential financial advisors and the absence of any potential conflicts with Salesforce. Following these discussions, the Slack committee approved the engagement of Qatalyst Partners and Goldman Sachs as financial advisors in connection with the exploration of Slack’s strategic options, including the possible acquisition of Slack by Salesforce. The Slack committee discussed economic and other material terms attendant to engagement of financial advisors and authorized management to finalize its engagement with each of Qatalyst Partners and Goldman Sachs within specified parameters. On September 30, 2020, Mr. Shim, with the approval of the Slack committee, executed an engagement letter formalizing Qatalyst Partners’ engagement to act as financial advisor to the Slack board in connection with a potential transaction. On October 2, 2020, at the direction of the Slack committee, representatives of Qatalyst Partners and Goldman Sachs discussed the recent Salesforce proposal andwith representatives of BofA Securities. During this discussion, representatives of Qatalyst Partners and Goldman Sachs reiterated the position of the TableauSlack board that any offer for a strategic combination would need to be significantly higher to warrant further engagement. Also on October 2, 2020, Mr. Schellhase, with the approval of directors. On February 21, 2019, Salesforce submittedthe Slack board, executed an engagement letter formalizing Goldman Sachs’ engagement to Tableau an updated proposalact as financial advisor to the Slack board in connection with a revised offer at $170 per share, all-stock consideration (although Salesforce indicated an opennesspotential transaction. In addition, Goldman Sachs provided a letter to discussing a mixSlack confirming that in the two years preceding the date of cash and stock if preferred by the Tableau board of directors) and an exchange ratio to be fixed based onletter, the 5-day VWAP.
On February 26, 2019, representativesInvestment Banking Division of Goldman Sachs had not been engaged by Salesforce to provide financial advisory or underwriting services for which Goldman Sachs had recognized compensation and disclosing Slack’s entry into capped call transactions (which are referred to in this proxy statement/prospectus as instructed by representativesthe “capped call transactions”) with Goldman Sachs with respect to Slack’s 0.50% Convertible Senior Notes due 2025 (which are referred to in this proxy statement/prospectus as the “convertible notes”). The section “—Opinion of Tableau management, contacted representativesGoldman Sachs & Co. LLC, Slack’s Financial Advisor” of BofA Merrill Lynchthis proxy statement/prospectus describes certain financial advisory and/or underwriting services Goldman Sachs has provided to facilitate limited diligence discussions.Slack and its affiliates for the two years preceding December 1, 2020. The Slack board considered the letter, together with certain disclosures regarding Goldman Sachs’ involvement with the capped call transactions, and confirmed that nothing would limit Goldman Sachs’ ability to fulfill its potential responsibilities as financial advisor to the Slack board in connection with the potential transaction.
On February 27, 2019,October 4, 2020, Mr. Butterfield and Mr. Taylor discussed the Slack and Salesforce negotiatedpositions regarding the September 16 offer. Later on October 4, 2020, Mr. Butterfield spoke again with Mr. Taylor and entered intoindicated that the Slack board’s position was firm that the price per share in the September 16 offer was not compelling enough to warrant further engagement with Salesforce or a confidentiality agreement with Tableau. The confidentiality agreement includedchange in Slack’s plans to continue to operate as a 12-month standstill provision, which did not restrictstandalone company. On October 15, 2020, Mr. Taylor contacted Mr. Butterfield to arrange a conversation about Salesforce’s interest in a potential acquisition of Slack and timing of a potential revised non-binding written proposal to acquire Slack. -57-
On October 17, 2020, Mr. Butterfield and Mr. Taylor spoke by phone, and Mr. Taylor indicated that Salesforce from making confidential proposals to, or requestingwas contemplating delivering a waiverrevised non-binding written proposal following a special meeting of the standstill from, the Tableau board of directors. On February 28, 2019, theSalesforce M&A Committee meton October 21, 2020.
On October 21, 2020, the Salesforce M&A Committee held a special meeting via videoconference to discuss and review the status of, and negotiations with respect to, the potential acquisition of Tableau. Mr. Somorjai updatedSlack. After discussions, the Salesforce M&A Committee regarding recent communicationsauthorized management to continue to pursue negotiations with TableauSlack and its financial advisors, and potential next steps.to submit a revised proposal to acquire Slack. At the invitation of the Salesforce M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting. From March 4 through March 11, 2019, high-level diligence information was exchanged and in-person and telephonic diligence meetings were conducted with executives and advisors of the respective companies.
On March 11, 2019, Mr. Benioff, Mr. Block and members of the Salesforce management team met in person in San Francisco with Mr. Selipsky and other members of the Tableau management team to discuss the products and business operations of Tableau and synergy opportunities between the companies.
On March 12, 2019, the M&A Committee met to discuss and review the status of, and negotiations with respect to, the potential acquisition of Tableau. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.
From March 12 through March 27, 2019, the parties continued diligence information exchange and related meetings.
On March 13, 2019, at a regularly scheduledmeeting of the Salesforce board of directors, Salesforce management discussed the status of negotiations with respect to the potential acquisition of Tableau and the progress that had been made conducting substantial diligence. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill LynchSecurities and Wachtell Lipton attended the meeting.
On March 14, 2019,October 21, 2020, following the authorization by the Salesforce M&A Committee, Mr. Somorjai delivered to Mr. Butterfield a revised non-binding written proposal to acquire Slack at a price per share of $42.50, with 50% of the consideration to be Salesforce common stock and 50% of the consideration to be cash (although Salesforce indicated an openness to discussing a different mix of cash and stock if preferred by the Slack board). The proposal was promptly distributed to the Slack board for review. The Slack committee met that same day via videoconference with senior management and representatives of Goodwin, Qatalyst Partners and Goldman Sachs. Mr. Butterfield updated the Slack committee on the status of discussions with Salesforce and the latest proposal received from Salesforce. The Slack committee discussed whether there was any merit to reaching out to any other potential acquirers. Based on discussions between Mr. Butterfield and Mr. Taylor to date, the Slack committee concluded that to optimize the negotiations with Salesforce, they should continue negotiating directly with Salesforce. On October 22, 2020, the Slack committee again met via videoconference with senior management and representatives of Goodwin, Qatalyst Partners and Goldman Sachs. After discussion, the Slack committee instructed Mr. Butterfield to communicate a counter-proposal of $53.50 per share to Salesforce. Also on October 22, 2020, Mr. Butterfield spoke with Mr. Taylor about arranging a meeting with Mr. Benioff to discuss strategy and potential synergies in connection with a possible transaction. On October 23, 2020, at the direction of the Slack committee, representatives of Qatalyst Partners and Goldman Sachs held a telephonic discussion with BofA Securities during which representatives of Qatalyst Partners and representatives of Goldman Sachs communicatedstated that Salesforce’s October 21 proposal to representativesacquire Slack for $42.50 per share was insufficient and made a counter-proposal of BofA Merrill Lynch the position of the Tableau board of directors that additional engagement would not be warranted if Salesforce would not pay more than $170$53.50 per share. Representatives of BofA Merrill Lynch confirmed to representativesLater on October 23, 2020, Mr. Benioff contacted a representative of Goldman Sachs that Salesforce had an ongoing interest in continuing discussions, but only toby phone, and the extent Tableau would convey a bona fide counterproposal regarding valuation. On March 18, 2019, representatives of Salesforce and Tableau discussed high-level diligence regarding Salesforce’s quarterly financial information.
On March 20, 2019, representativesrepresentative of Goldman Sachs reaffirmed Slack’s position that the price to be offered by Salesforce was insufficient.
On October 26, 2020, Mr. Taylor contacted representativesMr. Butterfield by phone to discuss the latest proposals of BofA Merrill Lyncheach party. Mr. Taylor indicated that Salesforce would be willing to relayincrease its offer to acquire Slack to a counterproposal fromprice per share of $46.50 per share. Mr. Butterfield indicated that a proposal to acquire Slack for $46.50 per share was insufficient based on his prior discussions with the TableauSlack board and made a counter-proposal of directors of $190$48.00 per share. Later on October 26, 2020, Mr. Taylor called Mr. Butterfield by phone again and indicated that day, representativesSalesforce would be willing to increase its offer to acquire Slack to a price per share of BofA Merrill Lynch, as previously authorized by$47.50. Later during the Salesforce board of directors, contacted representatives of Goldman Sachssame evening, Mr. Somorjai delivered to communicateMr. Butterfield a revised written proposal of $177 per share, which(which had been authorized by the Salesforce M&A Committee in its previous meetings,meetings) from Salesforce proposing the acquisition of all of the outstanding shares of Slack for a purchase price of $47.50 per share of Slack class A common stock and class B common stock, with material termsthe consideration consisting of 50% Salesforce common stock (to be based on a fixed exchange ratio determined prior to signing) and 50% cash. The revised proposal also included a draft exclusivity agreement, which provided that Slack would engage in lineexclusive discussions with those previously presentedSalesforce until November 24, 2020, with the possibility of automatic extension for an additional five business days thereafter, unless a party had terminated discussions. On October 26, 2020, the closing trading price of a share of Salesforce common stock was $241.98 and the closing trading price of a share of Slack Class A common stock was $27.75. -58-
On October 27, 2020, the Slack board held a special meeting via videoconference with representatives of Goodwin, Qatalyst Partners and Goldman Sachs present. At the direction of the Slack board, representatives of Qatalyst Partners discussed the proposal received from Salesforce. The Slack board directed representatives of Qatalyst Partners and Goldman Sachs to discuss with Salesforce the possibility of consideration to be in the priorform of 60% cash and 40% Salesforce offercommon stock. A representative of Goodwin reviewed the Slack board’s fiduciary duties in considering a potential change-in-control transaction and a request for exclusivity and a commitmentan agreement to enter into anexclusivity regarding such a transaction. After further discussion of the likelihood that another strategic buyer would make a superior offer to acquire Slack, the Slack board authorized Mr. Butterfield to enter into the exclusivity agreement by April 2. On March 21, 2019, representatives of Goldman Sachs contacted representatives of BofA Merrill Lynch to provide a counterproposal from the Tableau board of directors of $186 per share without any exclusivity agreement.
On March 22, 2019, representatives of BofA Merrill Lynch,with Salesforce on behalf of Salesforce, reaffirmed Salesforce’s willingnessSlack and to pay $177 per share in response to the counterproposal of the Tableau board of directors.
Between March 22 and March 28, 2019, representatives of the two companies discussed further the potential transaction, although no agreement was reached on price.
On March 26, 2019, representatives of Tableau reached out to representatives of Salesforce to explore benchmarking for apotential transaction value at a price in the range of the low $180s price per share of Tableau common stock.
Over the course of April 2 through April 4, 2019, the parties exchanged additional diligence information and held additional in-person diligence meetings. During the course of these meetings, executives of Salesforce and Tableau discussed the potential transaction, though no additional proposals regarding value were made.
On April 4, 2019, Mr. Benioff, Mr. Block and Mr. Hawkins held in person meetings in Seattle with Mr. Selipsky and Mr. Fletcher.
On April 8, 2019, representatives of Goldman Sachs contacted representatives of BofA Merrill Lynch to relay the position of the Tableau board of directors. The representatives discussed facilitating the parties’ exchange of financial diligence information regarding Tableau’s first quarter financial results.
Between April 9 and May 3, 2019, executives of the two companies held additionalcontinue discussions regarding the potential transaction at a price of $47.50 per share. Later on October 27, 2020, Mr. Schellhase, Ms. Weaver and their respective businessesMr. Somorjai exchanged drafts of an exclusivity agreement, and exchanged additional diligence materials. During this period, the companies and their financial advisors continued to discuss perspectives on valuation and possible methods for agreeing onMr. Somorjai delivered a fixed exchange ratio for a potential transaction.
On May 8, 2019, senior executive officers of Tableau and Salesforce discussed their previously described positions on value and agreed that a discussion between advisors would be a productive next step.
On May 9, 2019, Goldman Sachs, at Tableau senior management’s direction, contacted BofA Merrill Lynch to discuss possible valuation alternatives to assist the parties with bridging the then-current valuation gap.
On May 9, 2019, Salesforce presented to Tableau an updatedrevised non-binding written proposal to acquire all of the outstanding securities of Tableau forSlack at a price per share of $171. Consistent$47.50 per share with previous proposals,40% of the transaction consideration wouldto be all-stockSalesforce common stock and 60% of the exchange ratio wouldconsideration to be fixed at the 5-day VWAP.cash.
On May 12, 2019,October 28, 2020, representatives of Slack and Salesforce was contacted by Mr. Selipsky, who communicated the position of the Transaction Committee of the Tableau board of directors (which we refer to as the “Transaction Committee”) that a fixed exchange ratio could be used for the transaction, but would, in all cases, be subject to a floor of $175 per share. On May 14, 2019, Salesforce presented to Tableau an updated written proposal to acquire all of the outstanding securities of Tableau for a price per share of $173 on terms similar to those previously conveyed.
On May 15, 2019, Mr. Benioff contacted Mr. Selipsky to discuss the revised proposal on value in light of recent stock price volatility. Mr. Selipsky reiterated the commitment to value of the Tableau Board but agreed to revisit the discussion after consultation with the Transaction Committee.
On May 16, 2019, Salesforce submitted to Tableau a revised written proposal outliningfinalized the terms of a potentialthe exclusivity agreement, which the parties executed. The executed exclusivity agreement provided that exclusivity would automatically expire in the event that Salesforce voluntarily proposed any reduction in price or change in mix of the per share consideration to be paid to Slack stockholders in connection with the transaction between(as outlined in the latest Salesforce proposal).
On November 1, 2020, Slack granted Salesforce and Tableau. Salesforce proposedits advisors access to acquire alldue diligence information provided in a virtual data room. From November 1, 2020 until the execution and delivery of the outstanding securities of Tableau for a price per share between $175.00merger agreement, Salesforce and $180.00. Consistentits representatives conducted due diligence on Slack and participated in multiple due diligence discussions with previous proposals,Slack’s management and Slack’s representatives. On November 3, 2020, the transaction consideration would be all-stockSlack committee met with senior management and the exchange ratio would be based on the 5-day VWAP as determined prior to signing and a 39.9% premium to the 5-day VWAP of Class A common stock subject to a lower and upper bound of $175 and $180 per share. The revised proposal was also subject to a commitment from Tableau to work towards announcing a transaction on June 4, 2019. In order to achieve that target, Salesforce requested that the parties enter into an exclusivity agreement, with an exclusivity period lasting through June 4, 2019. On May 17, 2019, a representative of Goodwin. At the direction of the Slack committee, representatives of Goldman Sachs also attended to lead a discussion regarding the mechanics and economics of unwinding Slack’s outstanding convertible notes and capped call transactions in the event of a strategic transaction. Mr. Shim reviewed Slack’s Initial Three-Year Plan (as defined below) and provided an update on discussions with Salesforce. After discussion, the Slack committee authorized Slack senior management to provide the Initial Three-Year Plan to Salesforce.
On November 4, 2020, Salesforce sentwas provided additional access to substantial materials regarding Slack’s business, financials, material contracts and other matters in a representativevirtual data room. On November 5, 2020, Salesforce was provided with a copy of Tableau a draft exclusivity agreement.Slack’s Initial Three-Year Plan. On the same day, representatives of Salesforce’s and Slack’s respective management teams and their respective advisor teams held a videoconference meeting at which Slack’s management presented an overview of various aspects of Slack’s business in order to facilitate Salesforce’s due diligence. On November 6, 2020, representatives of Wachtell Lipton furnished initial drafts of the merger agreement and the voting and support agreement to Latham & Watkins LLP, Slack’s outside legal counsel in connection with the potential transaction (which we refer to as “Latham”). The initial draft merger agreement contemplated a “no-shop” provision restricting Slack from soliciting alternative acquisition proposals and without any ability for the Slack board to terminate the merger agreement with Salesforce in favor of an unsolicited superior proposal. The draft voting and support agreement also informed representativescontemplated that the Slack founders, who collectively controlled a majority of Cooleythe outstanding voting power, would be obligated to vote in favor of the transaction with Salesforce, ensuring the approval of the transaction with Salesforce for so long as there is no change of board recommendation, and that upon a change of board recommendation (including as a conditionresult of an unsolicited superior proposal), shares representing 33.3% of the outstanding voting power would be required to Salesforce announcing abe voted in favor of the transaction Salesforce would require certain employees of Tableau, including Tableau’s executive team,with Salesforce. From November 6, 2020 to sign offer letters concurrently with the entry into the merger agreement. On May 18, 2019, Salesforce was informed that the Tableau board of directors had authorized Tableau to discuss and negotiate Salesforce’s proposal and enter into an exclusivity agreement with an exclusivity period lasting through June 4, 2019. RepresentativesDecember 1, 2020, representatives of Salesforce and Tableau then finalizedSlack, with the assistance of Wachtell Lipton and Latham and other professional advisors, negotiated the terms of the Exclusivity Agreement, whichmerger agreement, the voting and support agreement and related documents.
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Additional due diligence sessions involving the Salesforce and Tableau then executed. Over the course of the exclusivity period, representatives of SalesforceSlack management teams and Tableau, including their respective legal and financial advisors engaged in reciprocal in-personoccurred on November 9 and telephonic due diligence investigations. In addition, Tableau provided a virtual data room to Salesforce and its advisors, which contained substantial materials regarding Tableau’s business, financials, material contracts and other matters. Salesforce continued to conduct due diligence on Tableau throughout the negotiation period.November 10, 2020 by videoconference.
On May 23, 2019, representativesNovember 12, 2020, the Salesforce board of Wachtell Lipton sent representatives of Cooleydirectors held a draft merger agreement and draft tender agreement. On May 24, 2019, the M&A Committee metspecial meeting via videoconference to discuss and review the status of negotiations with respect to the potential acquisition of Tableau and the progress that had been made conducting substantial diligence. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.
On May 27, 2019, representatives of Cooley sent representatives of Wachtell Lipton a revised draft of the merger agreement that among other things removed all of the provisions related to the tender agreements.
On May 29, 2019, representatives of Wachtell Lipton spoke to representatives of Cooley about Salesforce’s proposal to have the founders sign tender agreements in connection with the proposed transaction. Representatives of Wachtell Lipton also reiterated that Salesforce would be unlikely to proceed with a transaction that did not include founder support for the transaction. Later that day, representatives of Wachtell Lipton provided representatives of Cooley with a revised draft of the merger agreement.
In the evening on May 30, 2019, Mr. Selipsky spoke to Mr. Benioff about a personal matter that had arisen and would require Mr. Selipsky to travel out of state for a number of days. Mr. Benioff informed Mr. Selipsky that he believed it would be appropriate to delay the timeline by a few days.
On May 31, 2019, Mr. Somorjai spoke to Mr. Peir about the open issues in the transaction agreements. In addition, Mr. Somorjai requested that Tableau extend the exclusivity period for a period of one week to among other things give Salesforce additional time to complete its due diligence investigations. Mr. Somorjai suggested that the parties target an announcement on June 11, 2019.
On May 31, 2019, the M&A Committee met to discuss and review the status of negotiations with respect to the potential acquisition of Tableau, including the status of the merger agreement and the contemplated tender agreements. At the invitation of the M&A Committee, members of Salesforce management and representatives of BofA Merrill Lynch and Wachtell Lipton attended the meeting.
On June 4, 2019, Salesforce and Tableau executed an amendment to the Exclusivity Agreement, which extended the exclusivity period to June 11, 2019.
In addition, on June 4, 2019, representatives of Cooley provided representatives of Wachtell Lipton with a revised draft of a merger agreement that among other matters contemplated that the founders would enter into a conditional conversion letter agreement in lieu of tender agreements.
On June 5, 2019, the M&A Committee met to discuss and review the status of due diligence regarding the potential acquisition of Tableau,Slack, including preliminary due diligence findings developed over the course of the substantial diligence performed to date. At the invitation of the Salesforce board, members of Salesforce management and representatives of BofA Securities and Wachtell Lipton attended the meeting.
On November 12, 2020, the Slack committee met via videoconference with members of senior management and representatives of Latham, Goodwin, Qatalyst Partners and Goldman Sachs. At the direction of the Slack committee, representatives of senior management, Qatalyst Partners and Goldman Sachs led a discussion on the status of the transaction, and representatives of Latham reviewed the principal terms of the merger agreement that were subject to ongoing negotiation between the parties. The Slack committee instructed senior management and Latham to reject the voting and support agreement construct proposed by Salesforce and to negotiate for a fiduciary termination right in connection with a superior proposal under the merger agreement, with as low a termination fee as possible. On November 13, 2020, representatives of Latham furnished revised drafts of the merger agreement and the voting and support agreement to Wachtell Lipton. The revised merger agreement included a fiduciary termination right and a termination fee of 2.5% of Slack’s equity value. The revised voting and support agreement removed the construct proposed by Salesforce that, upon a change of board recommendation (including as a result of an unsolicited superior proposal), shares representing 33.3% of the outstanding voting power would be required to be voted in favor of the transaction with Salesforce. On November 17, 2020, representatives of Wachtell Lipton furnished revised drafts of the merger agreement and the voting and support agreement to Latham. The revised merger agreement provided for a termination fee of 3.6% of Slack’s equity value and noted that the fiduciary termination right remained an open point. On November 20, 2020, representatives of Latham furnished a revised draft of the merger agreement to Wachtell Lipton, which provided for a termination fee of 2.75% of Slack’s equity value and a fiduciary termination right. On November 21, 2020, Slack and representatives of Qatalyst Partners, Goldman Sachs, Goodwin and Latham held reverse due diligence discussions with members of Salesforce senior management regarding several topics, including finance and legal matters. It was agreed that a follow-up reverse due diligence discussion would be scheduled once Salesforce’s quarterly actual results and expected guidance for the next quarter and fiscal year were closer to finalization. On November 22, 2020, representatives of Wachtell Lipton furnished a revised draft of the merger agreement to Latham. Representatives of Wachtell Lipton conveyed to representatives of Latham that Salesforce would be willing to accept a fiduciary termination right in exchange for a termination fee of 3.3% of Slack’s equity value instead of the 2.75% of Slack’s equity value proposed by Slack. On November 23, 2020, the Salesforce M&A Committee held a special meeting via videoconference to discuss and review the status of the potential acquisition of Slack, including the due diligence findings developed over the course of the substantial diligence undertaken to date, the expected costs of operating Slack’s business after closing and recent changes in market conditions. Following discussions, the Salesforce M&A Committee remained supportive of the potential transaction, but directed Salesforce management to submit a revised proposal to Slack reflecting these considerations. At the invitation of the Salesforce M&A Committee, members of Salesforce management and representatives of BofA Merrill LynchSecurities and Wachtell Lipton attended the meeting. -60-
On June 6, 2019, executivesNovember 23, 2020, the Slack committee met via videoconference with members of Salesforcesenior management and Tableau discussedrepresentatives of Latham, Goodwin, Qatalyst Partners and Goldman Sachs. At the framework fordirection of the Slack committee, representatives of senior management, Qatalyst Partners and Goldman Sachs led a discussion on the status of the transaction and the open issuesstatus and results of the reverse due diligence investigations. Representatives of Latham and Goodwin reviewed the principal terms of the merger agreement that were subject to ongoing negotiation between the parties, expected timing for regulatory approvals and Salesforce’s process around financing for the transaction. Mr. Schellhase and Mr. Shim discussed the transaction’s potential to provide a greater potential distribution of the Slack product and allow Slack (as part of the combined company) to more effectively compete. As part of the discussion of transaction terms, representatives of Latham informed the Slack committee that Salesforce had agreed to include a fiduciary termination right, but that, in exchange, Salesforce had requested a termination fee of 3.3% of Slack’s equity value instead of the 2.75% of Slack’s equity value proposed by Slack. The Slack committee instructed management and Latham to negotiate a termination fee as close to 3.0% of Slack’s equity value as possible. The Slack committee also approved the Updated Three-Year Plan (as defined below) and authorized Slack senior management to provide the Updated Three-Year Plan to Salesforce. Later on November 23, 2020, Salesforce was provided with a copy of the Updated Three-Year Plan. On November 24, 2020, Mr. Taylor contacted Mr. Butterfield and, in connection with the completion of due diligence and in consideration of expected costs of operating Slack’s business after closing and recent changes in market conditions, proposed a reduced price per share of Slack common stock in the transaction agreements.of $45.50 per share, which caused exclusivity with Salesforce expressed concernsto automatically expire. On November 24, 2020, the closing trading price of a share of Salesforce common stock was $260.84 and the closing trading price of a share of Slack Class A common stock was $29.58. On November 25, 2020, a representative of BofA Securities contacted a representative of Qatalyst Partners via phone to provide additional context around the recentdecision to propose a reduced price per share of Slack common stock in the transaction. The representative of Qatalyst Partners indicated that he was confident that the Slack board would have an extremely negative reaction to the proposed reduction. During market volatilityhours on November 25, 2020, the Wall Street Journal reported that Salesforce was in advanced talks to acquire Slack. Slack and Salesforce did not comment with respect to the market rumors. The closing trading price of a share of Salesforce common stock was $246.82 and the executivesclosing trading price of both companies discusseda share of Slack Class A common stock was $40.70. Later that same day, the possibilitySlack committee met via videoconference with members of announcing the transactionsenior management and representatives of Latham, Qatalyst Partners and Goldman Sachs. Representatives of senior management, Qatalyst Partners and Goldman Sachs led a discussion on Monday, June 10. In addition, on June 6, 2019, the Salesforce board of directors met to discuss and review the status of the potential acquisitiontransaction and discussions with Salesforce. The Slack committee discussed the revised proposal received from Salesforce. Following discussion, the Slack committee authorized Mr. Butterfield to contact Mr. Taylor and convey that the revised offer would need to be higher to warrant further engagement. The Slack committee also instructed Goldman Sachs to contact Mr. Benioff and convey that the revised proposal from Salesforce was unacceptable and could result in termination of Tableau, includingdiscussions.
Following the statusSlack committee meeting, a representative of Qatalyst Partners contacted Mr. Butterfield via phone. In light of the negotiations around pricingdecline in the Salesforce share price following the publication of the Wall Street Journal article and the recent volatilityresulting decrease in the market. Thevalue of the stock portion of the deal consideration when measured based on the current Salesforce boardstock price (as opposed to the unaffected average daily volume weighted average price for a trailing five-day period that would likely be used to determine the exchange ratio), it was agreed that Mr. Butterfield would provide a counter-proposal to Mr. Taylor of directors authorized Salesforce management to submitapproximately $47.00 per share. Subsequently, Mr. Butterfield contacted Mr. Taylor via phone and made the counter-proposal. Separately, at the direction of the Slack committee, a representative of Goldman Sachs had discussions with Mr. Benioff and Mr. Taylor regarding the revised proposal to Tableau reflecting these considerations.from Salesforce. -61-
Later that day,on November 25, 2020, at the direction of the Slack board, representatives of Wachtell Lipton then sentQatalyst Partners and BofA Securities formalized the revised purchase price terms and reached agreement to fix the per share consideration to be paid to Slack stockholders at a per share price of $26.79 in cash and 0.0776 shares of Salesforce common stock, which represented a per share price of approximately $47.00 per share of Slack class A common stock based on the five-day trailing volume weighted average price of a share of Salesforce common stock ending on November 24, 2020. Separately, representatives of CooleyLatham furnished a revised draft of the merger agreement to Wachtell Lipton, which provided for a merger agreement.termination fee of 3.0% of Slack’s equity value and a fiduciary termination right. LaterAlso on June 6, 2019, Salesforce sent Mr. Selipsky a revised written proposal that offered to acquire Tableau based on a fixed exchange ratio of 1.0671, implying a price of $170 per share at the one-day closing price of Salesforce’s common stock. The revised proposal noted that the counterproposal took into account the changes in market conditions since May 16 and the competitive landscape.
During the course of June 7, 2019,November 25, 2020, representatives of eachSlack held a follow-up reverse due diligence discussion with members of TableauSalesforce senior management to review the latest quarterly actual results of Salesforce and Salesforce discussed Salesforce’s revised proposal. Among other matters, the representatives of Tableau objected to the revised offer being outside the price range (when calculated based on a 5-day VWAP) that formed the basisanticipated guidance for the transaction discussionsnext quarter and exclusivity period.fiscal year (which guidance was made public by Salesforce on December 1, 2020).
Following further discussion,On November 27, 2020, Slack and Salesforce agreed to revise its most recent proposal to reflect an offer pricereinstate the terms of $175 per share of Tableau common stock, but maintained that the resulting exchange ratio should be based on one-day closing spot prices, whileexclusivity agreement and extend the representatives of Tableau maintained that the Tableau Board expected the exchange ratio to be based on the 5-day VWAP because of, among other things, the recent volatility in the market.
Later on June 7, 2019, representatives of each of Tableau and Salesforce, along with representatives of BofA Merrill Lynch and representatives of Goldman Sachs, discussed various constructs to close the valuation gap. Among these constructs, representatives of each of Tableau and Salesforce, along with representatives of Goldman Sachs and representatives of BofA Merrill Lynch discussed a proposal to fix the transaction exchange ratio based on the trailing three-day volume weighted average trading share price of Salesforce common stock. Based upon a $175 per share price for each outstanding share of Tableau common stock and Salesforce’s three-day volume weighted average share price of $158.64, the parties agreed on an exchange ratio of 1.103, subject to final approval by each party’s respective board of directors.
On June 7 and June 8, Mr. Somorjai and Mr. Peir also had several discussions to resolve the outstanding open business and legal points.exclusivity period through December 1, 2020.
Over the course of June 7November 27 to June 9, 2019,November 30, representatives of CooleyLatham and Wachtell Lipton exchanged several revised versions of the draft merger agreement and the voting and support agreement reflecting the parties’ discussions.discussions, with the final terms of the merger agreement (pending approval by each of the Slack board and the Salesforce board) reflecting a termination fee of $900 million (approximately 3.1% of Slack’s equity value) and a fiduciary termination right. On June 9, 2019,November 29, 2020, the Slack board met with representatives of senior management and representatives of Latham, Qatalyst Partners and Goldman Sachs. Representatives of Qatalyst Partners reviewed and discussed Qatalyst Partners’ financial analyses regarding the proposed merger consideration contemplated by the proposal received from Salesforce based on the Management Projections (as defined below). Representatives of Latham reviewed the status of the merger agreement and discussed the key provisions including, without limitation, the structure of the transaction, treatment of securities and other equity instruments, provisions related to required regulatory approvals, closing conditions, non-solicitation covenants, the termination fee and termination rights. Thereafter, representatives of Latham reviewed the Slack board’s fiduciary duties in considering a potential sale of Slack. Representatives of Goldman Sachs reviewed and discussed their financial analyses regarding the proposed merger consideration contemplated by the proposal received from Salesforce based on the Management Projections. During the meeting, Mr. Butterfield also informed the Slack board that he had received informal messages from representatives of two large publicly traded U.S. technology companies, each of whom expressed a desire to discuss the market rumors that Salesforce was in advanced talks to acquire Slack on November 25, 2020. However, the Slack board discussed the fact that neither of those parties (nor any other potential acquirers) had made any offers, despite the November 25, 2020 market rumors, and that any potential engagement with additional parties would jeopardize the potential transaction with Salesforce. Following discussion, the Slack board determined that it was unlikely that any other potential acquirer would make a superior proposal to acquire Slack and that it was not in the best interests of Slack or its stockholders to delay the process with Salesforce so that Slack could engage with other parties. On November 30, 2020, the Salesforce board of directors held a special meeting via videoconference to consider and discuss the terms of the proposed acquisition of TableauSlack by Salesforce. At the invitation of the Salesforce board of directors, members of Salesforce management, representatives of BofA Merrill LynchSecurities and representatives of Wachtell Lipton attended the meeting. The Salesforce board of directors reviewed the material terms and conditions of the proposed transaction. Representatives of BofA Merrill LynchSecurities discussed with the directors variouscertain financial analysesaspects of the proposed transaction. Salesforce’s management reviewed the proposed per share consideration to be paid to Slack stockholders at a per share price of $26.79 in cash and 0.0776 shares of Salesforce common stock, which represented (i) $45.86 per share of Slack Class A common stock based on -62-
performed by BofA Merrill Lynch with respect to the proposed transaction.Salesforce’s closing stock price on November 30, 2020 and (ii) approximately $46.01 per share of Slack class A common stock based on Salesforce’s closing stock price on November 27, 2020. The Salesforce board of directors then engaged in discussion and deliberations, following which the Salesforce board of directors approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the offer and the mergermergers and the issuance of Salesforce shares in connection therewith, were advisable and fair to, and in the best interests of, Salesforce and its stockholders.
AfterOn December 1, 2020, the Slack board met, together with representatives of senior management and representatives of Latham, Qatalyst Partners and Goldman Sachs. Representatives of Latham reviewed with the Slack board its fiduciary duties in connection with a decision to sell Slack. Representatives of Qatalyst Partners and Goldman Sachs reviewed and discussed their respective meetingsfinancial analyses regarding the proposed merger consideration contemplated by the proposal received from Salesforce based on the Management Projections. Thereafter, at the request of the parties’ boardsSlack board, Qatalyst Partners rendered its oral opinion, which was subsequently confirmed by delivery of directors, Salesforce, Tableau,a written opinion, dated December 1, 2020, to the foundersSlack board that, as of December 1, 2020, based upon and certain employeessubject to the procedures followed and assumptions, qualifications and limitations considered in connection with the preparation of Tableau executedthe opinion, the merger consideration to be received pursuant to, and in accordance with, the terms of the merger agreement, by the conditional conversion letter agreement and the other transaction agreements, as applicable.
On June 10, 2019, prior to the openingholders of trading of Salesforce’ common stock and Tableau’sSlack Class A common stock, on the NYSE, Salesforce and Tableau issuedin their capacity as such holders, was fair, from a joint press release announcing the executionfinancial point of the merger agreement and the other transaction agreements.
Tableau’s Reasons for the Offer and the Merger; Recommendation of the Tableau Board of Directors
In evaluating the merger agreement and the transactions the Tableau board of directors consulted with Tableau management, its financial advisor and its outside legal counsel. In recommending that the Tableau stockholders accept the offer and tender their shares of Tableau common stockview, to Offerorsuch holders, as further described in the offer, the Tableau boardsection “—Opinion of directors carefully considered a numberQatalyst Partners LP, Slack’s Financial Advisor.” Representatives of factors, including the following material factors that, in the view of the Tableau board of directors, weighed in favor of the transactions (which factors are not necessarily presented in order of relative importance):
The current and historical market prices of the shares of Class A common stock, including the market performance of such shares relative to those of other participants in Tableau’s industry and general market indices, and certain premiums observed over various periods by the Tableau board of directors (based on the implied price per share to be paid to Tableau stockholders based on the exchange ratio and the closing price per share of Salesforce common stock on June 7, 2019, the last trading day before the date of the merger agreement) which represented, in the Board’s view, a compelling premium to the standalone present value of Tableau to its stockholders and the historical market prices of the shares of Class A common stock, including a (i) 42.1% premium based on the $125.21 closing price per share of Class A common stock on June 7, 2019, the last trading day before the date of the merger agreement, (ii) a 49.7% premium based on the average closing trading price of $118.80 per share of Class A common stock during the 30-day period prior to June 7, 2019 and (iii) a 43.2% premium based on the average closing trading price of $124.19 per share of Class A common stock during the 90-day period prior to June 7, 2019.
The fact that the transaction consideration to be paid to the Tableau stockholders would be in the form of shares of Salesforce common stock, and, as such, would offer the Tableau stockholders the ability (i) to participate in the future growth of Salesforce and, indirectly, Tableau, including any potential appreciation that may be reflected in the value of the combined company (including any resulting synergies), and (ii) to attain liquidity should any such Tableau stockholder choose not to retain its shares of Salesforce common stock.
The current and historical financial condition, results of operations, business, competitive position and prospects of Tableau, including:
its belief that the transactions would provide Tableau with substantial resources with which to expand its product offerings along with the potential to build and leverage Salesforce’s sales infrastructure to drive growth across domestic and international markets;
the ability to leverage the scale and financial capabilities of the combined company to make additional investments in innovation and technology and the potential to enhance existing products with Tableau’s data analytic capabilities to drive future growth and success of the combined company;
the business challenges that Tableau was facing, including the operational and business challenges and risks of continuing to build, scale and operate the business globally as an independent company, the current competitive environment in Tableau’s industry as well as general uncertainty surrounding forecasted economic conditions over the near and long terms;
Salesforce’s strong track record of successfully integrating prior acquisitions, including MuleSoft, Inc., which continues to have strong revenue growth following its acquisition by Salesforce;
the complementary nature of the cultures of the two companies, including with respect to corporate purpose and focus on customer success and innovation and vibrant user communities;
the expectation that Tableau’s management team will continue to play an important role in the combined company overseeing Tableau’s mission, products and services; and
the combined company’s business, operations, financial condition, product offerings, earnings, and prospects.
The fact that the transaction consideration Salesforce proposed reflected extensive negotiations between Tableau and Salesforce and their respective advisors, and the belief of the Tableau board of directors that the exchange ratio represents the best proposal and economic value available to Tableau’s stockholders, based upon an overall assessment, among other things, of the net present value of the risk-adjusted returns that are likely to accrue to the Tableau stockholders over the long term.
The oral opinion delivered by Goldman Sachs to the Tableau board of directors on June 9, 2019,then rendered Goldman Sachs’ oral opinion, subsequently confirmed in writing, that, as of June 9, 2019,the date of such opinion and based upon and subject to the factors and assumptions set forth therein, the transactionmerger consideration to be paid to the holders of shares of Tableau common stock (other than Salesforce and its affiliates), of shares of Slack common stock, taken in the aggregate, pursuant to the merger agreement was fair, from a financial point of view, to such holders (Seeas further described in the section “—Opinion of Tableau’sGoldman Sachs & Co. LLC, Slack’s Financial Advisor”).Advisor.”
The fact thatAfter discussion and taking into account the transactions are intended to qualify as a “reorganization” withinfactors described below in greater detail in the meaning of Section 368(a)section “—Recommendation of the Internal Revenue Code of 1986, as amended,Slack Board and as such generally no gain or loss should be recognized byReasons for the Tableau stockholders for U.S. federal income tax purposes in connection withMergers,” the exchange of Tableau common stock for shares of Salesforce common stock pursuant to the offer or the merger.
The likelihood of completion of the transactions, particularly in light ofSlack board unanimously (i) determined the terms of the merger agreement and transactions contemplated thereby, including the closing conditionsmergers, to be fair to and in the best interests of Slack and its stockholders, (ii) determined that it is in the best interests of Slack and its stockholders, and declared it advisable, to enter into the merger agreement, (iii) approved the execution and delivery by Slack of the merger agreement, the performance by Slack of its covenants and agreements contained therein and the consummation of the Mergers and the other transactions contemplated by the merger agreement upon the terms and subject to the offerconditions contained therein and (iv) directed that the merger agreement be submitted for consideration at a meeting of Slack’s stockholders and recommending that the holders of Slack’s common stock approve the transactions contemplated by the merger agreement, including the first merger, and adopt the merger agreement, subject to Section 5.3 of the merger agreement.
On December 1, 2020, after market close, Slack, Salesforce, Merger Sub I and Merger Sub II executed the merger agreement and related transaction documents. Shortly following the execution of the merger agreement, Slack and Salesforce published a joint press release announcing the transaction. Recommendation of the Slack Board and Reasons for the Mergers By unanimous vote, the Slack board, at a special meeting held on December 1, 2020, determined that the merger agreement and the transactions contemplated by the merger including:agreement, including the mergers, are fair to, and in the best interests of Slack and its stockholders; approved and declared advisable the merger agreement and the transactions contemplated thereby, including the mergers; and resolved to recommend that Slack stockholders approve the transactions contemplated by the merger agreement, including the first merger, and adopt the merger agreement. The Slack board unanimously recommends that you vote “FOR” the merger proposal and “FOR” the non-binding compensation advisory proposal. -63-
In evaluating the mergers, the Slack board consulted with Slack’s senior management team, as well as Slack’s outside legal and financial advisors, and, in reaching its decision to approve the merger agreement and declare its advisability and to recommend that Slack’s stockholders vote in favor of the adoption of the merger agreement, the Slack board considered a number of factors, including, but not limited to, the following: | • | | Premium to Current Equity Price. The default merger consideration to be paid by Salesforce of 0.0776 shares of Salesforce common stock and $26.79 in cash, which implied (i) an equity value of $45.86 per share of Slack common stock, based on Salesforce’s closing stock price on November 30, 2020, the last full trading day before the date of the merger agreement, and would provide Slack’s stockholders with the opportunity to receive approximately (1) a 55% premium over the unaffected closing price of $29.58 per share of Slack Class A common stock on November 24, 2020, the last full trading day before the first published rumor regarding a potential merger transaction, (2) a 62% premium over the 90-day unaffected volume weighted average price of $28.34 and (3) a 15% premium over the unaffected all-time high closing price of $39.90and (ii) an equity value of $47.03 per share of Slack common stock based on the unaffected closing price of Salesforce common stock as of November 24, 2020, the last full trading day before the first published rumor regarding a potential merger transaction, and would provide Slack’s stockholders with the opportunity to receive approximately (1) a 59% premium over the unaffected closing price of $29.58 per share of Slack Class A common stock on November 24, 2020, (2) a 66% premium over the 90-day unaffected volume weighted average price of $28.34 and (3) an 18% premium over the unaffected all-time high closing price of $39.90. |
| • | | Liquidity and Certainty of Value. The merger consideration to be paid to Slack’s stockholders will consist of cash, which provides immediate liquidity and certainty of value to Slack’s stockholders, and freely tradable Salesforce common stock. |
| • | | Future Appreciation. The aggregate consideration to be received by Slack’s stockholders in the first merger consists, as of the unaffected date, of 43% Salesforce common stock, which allows Slack’s stockholders to participate in the future growth of Salesforce and, indirectly, Slack, including any potential appreciation that may be reflected in the value of the combined company (including any resulting synergies) and to attain liquidity should any Slack stockholder choose not to retain its shares of Salesforce common stock. |
| • | | Salesforce’s Business Condition and Prospects. The Slack board considered information with respect to Salesforce’s financial condition, results of operations, business, competitive position and business prospects and risks, both on a historical and prospective basis, as well as current industry, economic and market conditions and trends. In considering Salesforce’s condition and prospects, Slack’s board reviewed information regarding Salesforce’s historical performance and received reports from Slack’s senior management team regarding its due diligence review of Salesforce’s business and legal affairs and Salesforce’s management. |
| • | | Strategic Benefits. The transaction would leverage Slack’s proven business collaboration technology offerings across Salesforce’s broader platform. The combined company would facilitate a diversity of service offerings, client relationships, geographies and end markets and allow Slack (as part of the combined company) to more effectively compete against third parties. Slack and Salesforce also have similar cultures, including with respect to corporate purpose, focus on customer success and innovation and vibrant user communities. |
| • | | Extensive Negotiations. The Slack board considered the fact that the merger consideration reflected extensive negotiations between Slack and Salesforce and their respective advisors, and the belief of the Slack board that the merger consideration represents the best proposal and economic value available to Slack’s stockholders. |
| • | | Tax Treatment. The Slack board considered the fact that the transaction is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. |
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| • | | Terms of the Merger Agreement. The Slack board, with the assistance of legal advisors, reviewed the terms of the merger agreement, including: |
the conditionsability of Slack’s board, subject to the offerspecified limitations, to respond to and engage in discussions or negotiations regarding unsolicited third-party acquisition proposals under certain circumstances and, ultimately, to terminate the merger are limited and customary;agreement in order to accept a superior proposal under specified circumstances; the fact that Salesforce’s obligations pursuantSlack’s board has the right, after complying with specified covenants and prior to the Slack stockholder approval being obtained, to change its recommendation to the Slack stockholders that they vote in favor of the adoption of the merger agreement are not subjectif Slack’s board determines in good faith after consultation with Slack’s outside legal counsel and financial advisors, that as a result of a superior proposal or certain intervening events the failure to any financing condition or similar contingency that is based on Salesforce’s abilitychange its recommendation would be reasonably likely to obtain financing; the ability of Tableauviolate its fiduciary duties to specifically enforce the merger agreement, including Salesforce’s obligation to consummate the offer and the merger, subject to the terms and conditions therein;
the obligation of the parties to use reasonable best efforts to obtain approvals or clearances fromSlack’s stockholders under applicable antitrust and competition authorities, including a commitment by Salesforce during the pendency of the offer not to undertake certain acquisitions if doing so would reasonably be expected to prevent Salesforce from obtaining any such approvals or clearances prior to the outside date;law; and
the fact that the founders (i) have agreed to convert the shares of Class B common stock beneficially owned by such holders into shares of Class A common stock representing in the aggregate approximately 11.8% of the outstanding shares of Class A common stock in accordance with, and subject to, the terms and conditions of the Letter Agreement and (ii) have conveyed to
| the Tableau board of directors that the founders intend to tender their shares of Tableau common stock into the offer.
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The terms of the merger agreement permitting Tableau to receive unsolicited alternative proposals, and the other terms and conditions of the merger agreement, including:
Tableau’s ability, under certain circumstances, to furnish information to, and conduct negotiations with, third parties regarding unsolicited acquisition proposals;
the ability of the Tableau board of directors under the merger agreement to withdraw or modify its recommendation that the Tableau stockholders tender their shares of Tableau common stock to Offeror pursuant to the offer in certain circumstances, including in connection with a superior offer or an intervening event; and
the provision of the merger agreement allowing the Tableau board of directorsSlack’s right to terminate the merger agreement under certain circumstances, including in order to accept and enter into a definitive agreement with respect to an unsolicited superior offer in certain circumstances, subject to providing Salesforce an opportunity to match such proposal prior to taking such action, and payment to Salesforce of a termination fee of $552$900 million if the merger agreement is so terminated, which amount the TableauSlack board of directors believes to be reasonable under the circumstances and taking into account the range of such termination fees in similar transactions.
The Tableau
| • | | Likelihood of Completion. The likelihood that the mergers will be consummated, based on, among other things, the limited number of conditions to the mergers, the absence of a financing condition or similar contingency that is based on Salesforce’s ability to obtain financing, the relative likelihood of obtaining required regulatory approvals, the remedies available under the merger agreement to Slack in the event of various breaches by Salesforce, and Salesforce’s reputation in the business technology industry, its financial capacity to complete an acquisition of this size and its prior track record of successfully completing acquisitions, which the Slack board believed supported the conclusion that a transaction with Salesforce could be completed relatively quickly and in an orderly manner. |
| • | | Regulatory Matters. The Slack board considered the regulatory clearances that would be required as a condition to the mergers and the prospects and anticipated timing of obtaining those clearances. |
| • | | Opinions of Financial Advisors. |
| • | | The Slack board considered the opinion of Qatalyst Partners to the effect that, as of December 1, 2020, and based upon and subject to the assumptions, qualifications, limitations and other matters set forth in such opinion, the merger consideration to be received pursuant to, and in accordance with, the merger agreement by the holders of shares of Slack Class A common stock, in their capacity as such holders of Slack Class A common stock (other than Salesforce or any of its affiliates), was fair, from a financial point of view, to such holders, as more fully described below under the section entitled “—Opinion of Qatalyst Partners LP, Slack’s Financial Advisor” and the full text of the written opinion is attached as Annex B to this proxy statement/prospectus. |
| • | | The Slack board also considered the opinion, dated December 1, 2020, of Goldman Sachs to the Slack board that as of such date and subject to the factors and assumptions set forth therein, the merger consideration to be paid to the holders (other than Salesforce and its affiliates) of shares of Slack common stock, taken in the aggregate, pursuant to the merger agreement was fair from a financial point of view to such holders as more fully described below in the section entitled “—Opinion of Goldman Sachs & Co. LLC, Slack’s Financial Advisor” and the full text of the written opinion is attached as Annex C to this proxy statement/prospectus. |
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Slack’s board of directors also considered a varietynumber of risks and other potentially adversenegative factors in determining whether to approveits deliberations concerning the merger agreement and the transactions, including the following material factors (which factors are not necessarily presented in order of relative importance):mergers, including: The potential risk of diverting Tableau management attention and resources from the operation of Tableau’s business and towards completion of the offer and the merger.
The uncertainty about the effect of the proposed transactions, regardless of whether the transactions are completed, on Tableau’s employees, customers and other parties, which may impair Tableau’s ability to attract, retain and motivate key personnel, and could cause customers, suppliers and others to seek to change existing business relationships with Tableau.
The fact that no cash consideration is being paid in connection with the offer and the merger and that the exchange ratio is fixed, which could result in the Tableau stockholders being adversely affected by a decrease in the trading price of Salesforce common stock during the pendency of the offer.
The restrictions in the merger agreement on the conduct of Tableau’s business prior to the consummation of the merger, which may delay or prevent Tableau from undertaking business or other opportunities that may arise prior to the consummation of the transactions (see “Merger Agreement—Conduct of Business Before Completion of the Merger—Restrictions on Tableau’s Operations”).
The risk that the conditions to the offer may not be satisfied and that, therefore, the offer and the merger may not be consummated.
The possibility that, under certain circumstances, Tableau may be required to pay Salesforce a termination fee of $552 million (see “Merger Agreement—Termination Fee and Expenses”).
The fact that Tableau’s executive officers and directors have financial interests in the transactions that are not shared by all Tableau Stockholders (see “Interests of Certain Persons in the Transaction” and “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements between Salesforce, the Offeror and the Current Executive Officers, Directors and Affiliates of Tableau” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document).
The costs to be incurred in connection with the transactions, regardless of whether the transactions are completed and the risks and contingencies relating to the announcement and pendency of the
| | • | | transactionsRisk Associated with Failure to Consummate the Mergers. The possibility that the mergers might not be completed on a timely basis or at all as a result of the failure to receive the required regulatory clearances or satisfy other closing conditions, which could divert Slack management attention and resources from the operation of Slack’s business and increase expenses from an unsuccessful attempt to complete the mergers.
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| • | | Incurred Costs. The costs to be incurred in connection with the mergers, regardless of whether the mergers are completed and the risks and contingencies relating to the announcement and pendency of the mergers and the risks and costs to TableauSlack if the transactions are not completed on a timely basis or at all. |
| • | | Impact of Announcement.The uncertainty about the effect of the proposed mergers, regardless of whether the mergers are completed, on Slack’s employees, customers and other parties, may impair Slack’s ability to attract, retain and motivate key personnel, and could cause customers, suppliers and others to seek to change existing business relationships with Slack. |
The challenges of combining the businesses, operations
| • | | Risk of Failure to Consummate the Mergers. The risk that adverse changes to the business, assets, liabilities, condition (financial or otherwise) or operating results of Slack or Salesforce could result in a failure to complete the mergers. |
| • | | Difficulties of Integrating the Businesses. The potential difficulties of integrating the businesses of Salesforce and Slack and workforces of Salesforce and Tableau and the risk that anticipated strategic and other benefits to Salesforce and Tableau following completion of the merger, including any expected synergies, would not be realized or would take longer to realize than expected. The regulatory and other approvals required in connection with the offer and the merger and the risk that such regulatory approvals will not be received in a timely manner or at all or may impose unacceptable conditions.
Various other risks associated with the transactions and the business of Tableau and the combined company described in the “Forward-Looking Statements” and in “Item 8—Additional Information—Cautionary Statement Regarding Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document, and as detailed in Tableau’s and Salesforce’s filings with the SEC (see “—Where to Obtain More Information”).
At a meeting held on June 9, 2019, after careful consideration, the Tableau board of directors, among other things, unanimously:
determined that the merger agreement and the transactions contemplated thereby, including the offer and the merger are fair to, and in the best interests of, Tableau and the Tableau stockholders;
determined that it is in the best interests of Tableau and its stockholders and declared it advisable to enter into the merger agreement;
approved the execution and delivery by Tableau of the merger agreement, the performance by Tableau of its covenants and agreements contained in the merger agreement and the consummation of the offer, the merger and the other transactions contemplated by the merger agreement upon the terms and subject to the conditions contained in the merger agreement; and
resolved to recommend, and recommended, that the Tableau stockholders accept the offer and tender their shares of Tableau common stock to the Offeror pursuant to the offer.
Accordingly, the Tableau Board unanimously recommends that the Tableau stockholders tender their shares of Tableau common stock pursuant to the offer.
The foregoing discussion of reasons of the Tableau board of directors for its recommendation to accept the offer is not meant to be exhaustive, but addresses the material information and factors considered by the Tableau board of directors in connection with its recommendation. In view of the wide variety of reasons considered by the Tableau board of directors in connection with the evaluation of the offer and the complexity of these matters, the Tableau board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific reasons considered in reaching its determination and recommendation. Rather, the Tableau board of directors made its determinations and recommendations based on the totality of the information presented to them, and the judgments of individual members of the Tableau board of directors may have been influenced to a greater or lesser degree by different reasons. In arriving at their respective recommendations, the members of the Tableau board of directors considered the interests of our executive officers and directors (see “Interests of Certain Persons in the Transaction” and “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements between Salesforce, the Offeror and the Current Executive Officers, Directors and Affiliates of Tableau” in the Schedule 14D-9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document).
The foregoing description of the consideration by the Tableau board of directors of the reasons supporting the merger agreement and the transactions is forward-looking in nature. This information should be read in light of
the factors discussed in “Forward-Looking Statements” and in “Item 8—Additional Information—Cautionary Statement Regarding Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document.
Salesforce’s Reasons for the Offer and the Merger
In reaching its decision to approve the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement, the Salesforce board of directors consulted with Salesforce’s management, as well as Salesforce’s legal and financial advisors, and considered a number of factors, including the following factors which it viewed as supporting its decision to approve the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement (not in any relative order of importance):
the view that Tableau is a premier analytics platform, which will allow Salesforce to play a greater role in driving digital transformation;
the view that Tableau’s products will enhance Salesforce’s value to its customers by helping customers to better visualize and analyze data to make smarter and faster decisions;
the view that Tableau’s products, when integrated with Salesforce’s products, presents an opportunity to improve customer satisfaction and lower attrition;
the view that Tableau addresses a multi-billion dollar market opportunity that is growing at a fast rate;
Tableau’s large enterprise customer base, which also includes many of Salesforce’s largest customers;
the view of Salesforce’s customers that data analytics and visualization tools are an important part of the broader digital transformation initiative and a high priority;
Tableau’s demonstrated ability to meaningfully scale its business with attractive growth prospects;
the expectation that the combined company would create additional growth opportunities by leveraging the respective strengths of each business, which is expected to create long-term stockholder value;
the strength of Tableau’s management team and engineering team, and the cultural synergies between the two companies;
the view that the terms and conditions of the merger agreement and the transactions contemplated therein, including the representations, warranties, covenants, closing conditions and termination provisions, are comprehensive and favorable to completing the proposed transactions;
the fact that the merger agreement places limitations on Tableau’s ability to seek an alternative proposal and requires Tableau to pay Salesforce a termination fee of $552 million if Salesforce or Tableau terminates the merger agreement under certain circumstances, including if Tableau consummates or enters into an agreement with respect to a competing acquisition proposal within a certain time period;
the anticipated short time period from announcement to completion achievable through the exchange offer structure and the expectation that the conditions to the consummation of the offer and the merger will be satisfied on a timely basis;
the amount and form of consideration to be paid in the transaction, including the fact that the exchange ratio is fixed;
current financial market conditions and the current and historical market prices and volatility of, and trading information with respect to, shares of Salesforce common stock and Tableau Class A common stock;
the Salesforce board of directors’ and Salesforce’s management’s familiarity with the business operations, strategy, earnings and prospects of each of Salesforce and Tableau and the scope and results of the due diligence investigation of Tableau conducted by Salesforce;
the entry into the letter agreement by Tableau’s co-founders, Christian Chabot, Christopher Stolte and Patrick Hanrahan, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock prior to the expiration of the offer, subject to certain terms and conditions, and
Tableau’s management’s recommendation in favor of the offer and the merger.
The Salesforce board of directors also considered a variety of uncertainties and risks and other potentially negative factors concerning the transactions, including the following (not in any relative order of importance):
the risk that all or some portion of the potential benefits of the mergers might not be realized or might take longer to realize than expected. |
| • | | Restrictions on Conducting Business. The fact that, under the terms of the merger agreement, prior to the completion of the mergers or termination of the merger agreement, Slack is required to conduct its business only in the ordinary course and is subject to specified restrictions on its ability to conduct its business, including in respect of entering into or terminating material contracts, commencing or settling litigation or increasing the compensation of its employees. |
| • | | Inability to Solicit Other Takeover Proposals and Termination Fee. Slack’s inability to solicit competing acquisition proposals and the possibility that the termination fee payable by Slack upon termination of the merger agreement could discourage other potential acquirers from making a competing offer to purchase Slack and cause significant cash flow difficulties for Slack if it were required to pay the termination fee of $900 million to Salesforce. |
| • | | Salesforce Common Stock as Merger Consideration. The fact that the value of the merger consideration will fluctuate depending on the performance of Salesforce common stock prior to closing of the first merger, and that the merger agreement does not provide termination or walk-away rights to Slack in the event of a decline in the price of Salesforce common stock. |
| • | | Risk to Salesforce Common Stock Price Post-Mergers. The risk of significant selling pressure on the price of Salesforce common stock immediately following the closing of the first merger if a significant number of Slack stockholders seek to sell the Salesforce common stock they received as merger consideration. |
In the judgment of Slack’s board, however, these potential risks were more than offset by the potential benefits of the acquisition may not be fully or even partially achieved, or may not be achieved within the expected time frame; costs associated with the transactions;
the risk that the transactions may not be consummated despite the parties’ efforts or that the closing of the transactions may be unduly delayed;
the risks associated with the occurrence of events which may materially and adversely affect the operations or financial condition of Tableau and its subsidiaries, which may not entitle Salesforce to terminate the merger agreement;
the challenges and difficulties relating to combining the operations of Salesforce and Tableau;
the risk of diverting Salesforce’s management’s focus and resources from other strategic opportunities and from operational matters while working to implement the acquisition of Tableau, and other potential disruptions associated with combining the two companies;
the effects of general competitive, economic, political and market conditions and fluctuations on Salesforce, Tableau or the combined company; and
various other risks associated with the acquisition and the businesses of Salesforce, Tableau and the combined company, some of which are described under “Risk Factors.”
The Salesforce board of directors concluded that the potential negative factors associated with the acquisition were outweighed by the potential benefits of completing the offer and the merger. Accordingly, the Salesforce board of directors approved the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement.mergers discussed above.
The foregoing discussion of the information and factors considered by the SalesforceSlack board of directors is not intended to be exhaustive, but includes the material positivefactors that the Slack board considered. In reaching its decision to approve the merger agreement, the mergers, and negative factors consideredthe other transactions contemplated by the Salesforcemerger agreement, the Slack board of directors. In view of the variety of factors considered in connection with its evaluation of the acquisition, the Salesforce board of directors did not find it practicable to, and did not quantify or otherwise assign any relative weights to the specific factors considered, in reaching its determination. In addition,and individual directors may have given different weights to different factors. The SalesforceSlack board of directors did not undertakeconsidered all these factors as a whole, and overall -66-
considered the factors to make any specific determination asbe favorable to, whether any factor, or any particular aspect of any factor, supported or did notand to support, its ultimate determination. The SalesforceSlack board of directors based its determination on the totalityconducted an overall review of the information presented.factors described above, and reached the consensus that the mergers are fair to, advisable to, and in the best interests of, Slack and Slack’s stockholders. In considering the recommendation of Slack’s board to adopt the merger agreement, Slack’s stockholders should be aware that the executive officers and directors of Slack have certain interests in the mergers that may be different from, or in addition to, the interests of Slack stockholders generally, as more fully described below under the section captioned “—Interests of Slack Directors and Executive Officers in the Mergers.” The Slack board was aware of these interests and considered them when adopting the merger agreement and recommending that Slack stockholders vote to adopt the merger agreement. Projected Financial Information Although TableauSlack has publicly issued limited short-term guidance concerning certain aspects of its expected financial performance, it does not, as a matter of course, make public disclosure of detailed forecasts or projections of its expected financial performance for extended periods due to, among other things, the inherent difficulty of accurately predicting future periods and the likelihood that the underlying assumptions and estimates may prove incorrect. However, in connection with the transaction with Salesforce, Tableau’sSlack’s senior management prepared and approved for use certain unaudited prospective financial information which was provided to and considered by the TableauSlack board of directors and Salesforce, and which was provided to each of Qatalyst Partners and Goldman Sachs, in each case as set forth herein. Tableau’sSlack’s management initially prepared certain non-public,nonpublic, unaudited prospective financial information for calendarfiscal years 20192021 through 20232024 in February 2019October and November 2020 and such non-public, unaudited prospective financial information was discussed with, and approved for use by, the Tableau board of directorsSlack committee on February 25, 2019November 3, 2020 (which we refer to as the “Initial Five-YearThree-Year Plan”) in connection with the evaluation of the strategic transaction with Salesforce. The Initial Three-Year Plan was shared with representatives of Salesforce on November 5, 2020 in connection with their due diligence review.
In March,November 2020, the Initial Three-Year Plan was subsequently adjusted to reflect Slack’s actual operating results for its fiscal quarter ended October 31, 2020 (which we refer to as the “Updated Three-Year Plan”). The Updated Three-Year Plan (except for the calculations of “Unlevered Free Cash Flow” and “Unlevered Free Cash Flow Less Stock-Based Compensation” and the related “% Margins”) was shared with representatives of Salesforce on November 23, 2020 in connection with their due diligence review. Slack’s senior management subsequently made certain unaudited prospective extrapolations based on the Initial Five-YearUpdated Three-Year Plan for the calendarfiscal years 20242025 through 2033, which were provided to Goldman Sachs. In May, the Initial Five-Year Plan was subsequently adjusted to reflect Tableau’s actual operating results for the first quarter of 2019 and Tableau’s revised estimated results for the second quarter of 2019 (which we refer to as the “Updated Five-Year Plan”). As compared to the Initial Five-Year Plan,2031. The Slack board approved the Updated Five-YearThree-Year Plan reflected, with respectand such extrapolations on November 23, 2020. Such extrapolations were not provided to the year-ended December 31, 2019, (i) lower revenue based on the actual operating results for the first quarter of 2019 and lower estimated revenue outlook for the second quarter of 2019 and (ii) decreased operating income and cash flows as a result of such reduced revenue performance and outlook and the timing of certain expenses during the balance of calendar year 2019. The Updated Five-Year Plan (excluding the impact of stock-based compensation and any related extrapolations) was shared with representatives of Salesforce on May 19, 2019 in connection with their due diligence review. Senior management also approvedthe transaction. In connection with such approval, the Slack board directed Qatalyst Partners and Goldman Sachs to use the Updated Five-YearThree-Year Plan and the related extrapolations for calendarfiscal years 20242025 through 2033 for use by Goldman Sachs on May 30, 2019 and directed Goldman Sachs to use the Updated Five-Year Plan and the related extrapolations for calendar years 2024 through 20332031, or a subset thereof, in connection with performing itstheir financial analyses in connection with its opinion,their respective opinions, as described in more detail in the sectionsections “Opinion of this document titled “OpinionQatalyst Partners LP, Slack’s Financial Advisor” and “Opinion of Tableau’sGoldman Sachs & Co. LLC, Slack’s Financial Advisor”Advisor” below. In November 2020, management prepared certain non-public, unaudited prospective financial information related to the expected utilization by Slack of certain federal net operating loss carryforwards and research and development tax credits of Slack for fiscal years 2022 through 2032 (which we refer to as the “NOL Schedule”) in connection with the evaluation of the strategic transaction with Salesforce. The NOL Schedule was provided to Qatalyst Partners and Goldman Sachs for use in performing their financial analyses in connection with their respective opinions, as described in more detail in the sections “Opinion of Qatalyst Partners LP, Slack’s Financial Advisor” and “Opinion of Goldman Sachs & Co. LLC, Slack’s Financial Advisor” below. The NOL Schedule was not provided to representatives of Salesforce in connection with the transaction. -67-
We refer to any of the Initial Five-YearThree-Year Plan, the Updated Five-YearThree-Year Plan and related extrapolated projections for calendarfiscal years 20242025 through 20332031 and the NOL Schedule as the “management projections.“Management Projections.” The management projectionsManagement Projections were prepared by TableauSlack on a stand-alone basis and do not take into account the transaction,transactions, including any costs incurred in connection with the offermergers or the other transactions contemplated thereby or any changes to Tableau’sSlack’s operations or strategy that may be implemented after the completion of the merger.mergers. As a result, actual results likely will differ, and may differ materially, from those contained in the management projections.Management Projections. The information and tables set forth below are included solely to give TableauSlack stockholders access to relevant portions of the management projectionsManagement Projections and are not included in this documentproxy statement/prospectus to influence any TableauSlack stockholder to tendervote their shares of TableauSlack common stock in favor of the mergers or for any other purpose. Initial Five-YearThree-Year Plan | | | | | | | | | | | | | | | | | FYE Jan | $ in millions | | FQ4’21E | | | 2022E | | | 2023E | | | 2024E | | Revenue | | $ | 245 | | | $ | 1,188 | | | $ | 1,562 | | | $ | 2,012 | | % Growth | | | 35 | % | | | 33 | % | | | 31 | % | | | 29 | % | Non-GAAP Gross Profit | | $ | 214 | | | $ | 1,045 | | | $ | 1,388 | | | $ | 1,812 | | % Margin | | | 87 | % | | | 88 | % | | | 89 | % | | | 90 | % | Non-GAAP Operating Income (Loss)1 | | $ | (9 | ) | | $ | 10 | | | $ | 155 | | | $ | 322 | | % Margin | | | (4 | )% | | | 1 | % | | | 10 | % | | | 16 | % |
| (1) | Excludes the impact of stock-based compensation. |
Updated Three-Year Plan and Related Extrapolations ($ in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FYE December 31, | | 2019E | | | 2020E | | | 2021E | | | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | | 2032E | | | 2033E | | Revenue | | $ | 1,418 | | | $ | 1,773 | | | $ | 2,180 | | | $ | 2,677 | | | $ | 3,297 | | | $ | 4,023 | | | $ | 4,827 | | | $ | 5,696 | | | $ | 6,607 | | | $ | 7,532 | | | $ | 8,436 | | | $ | 9,280 | | | $ | 10,022 | | | $ | 10,724 | | | $ | 11,367 | | Gross Profit (non-GAAP)(1) | | $ | 1,275 | | | $ | 1,598 | | | $ | 1,961 | | | $ | 2,409 | | | $ | 2,975 | | | $ | 3,610 | | | $ | 4,307 | | | $ | 5,054 | | | $ | 5,830 | | | $ | 6,608 | | | $ | 7,359 | | | $ | 8,049 | | | $ | 8,642 | | | $ | 9,194 | | | $ | 9,689 | | EBIT (non-GAAP)(2) | | $ | 192 | | | $ | 315 | | | $ | 459 | | | $ | 644 | | | $ | 889 | | | $ | 1,080 | | | $ | 1,311 | | | $ | 1,564 | | | $ | 1,834 | | | $ | 2,113 | | | $ | 2,392 | | | $ | 2,659 | | | $ | 2,901 | | | $ | 3,137 | | | $ | 3,359 | | (-) Stock-Based Compensation | | $ | (269 | ) | | $ | (307 | ) | | $ | (351 | ) | | $ | (387 | ) | | $ | (423 | ) | | $ | (484 | ) | | $ | (537 | ) | | $ | (594 | ) | | $ | (658 | ) | | $ | (727 | ) | | $ | (803 | ) | | $ | (886 | ) | | $ | (978 | ) | | $ | (1,032 | ) | | $ | (1,078 | ) | EBIT (non-GAAP)(3) | | $ | (77 | ) | | $ | 8 | | | $ | 108 | | | $ | 257 | | | $ | 466 | | | $ | 596 | | | $ | 774 | | | $ | 969 | | | $
|
1,176 |
| | $
|
1,386 |
| | $
|
1,588 |
| | $
|
1,772 |
| | $ | 1,923 | | | $ | 2,105 | | | $ | 2,281 | | (-) Cash Taxes | | $ | (14 | ) | | $ | (25 | ) | | $ | (48 | ) | | $ | (48 | ) | | $ | (52 | ) | | $ | (89 | ) | | $ | (116 | ) | | $ | (145 | ) | | $ | (176 | ) | | $ | (208 | ) | | $ | (238 | ) | | $ | (266 | ) | | $ | (337 | ) | | $ | (421 | ) | | $ | (502 | ) | (+) Depreciation & Amortization | | $ | 32 | | | $ | 36 | | | $ | 44 | | | $ | 54 | | | $ | 66 | | | $ | 70 | | | $ | 72 | | | $ | 71 | | | $ | 83 | | | $ | 94 | | | $ | 105 | | | $ | 116 | | | $ | 125 | | | $ | 134 | | | $ | 142 | | (-) CapEx | | $ | (60 | ) | | $ | (40 | ) | | $ | (40 | ) | | $ | (40 | ) | | $ | (40 | ) | | $ | (50 | ) | | $ | (60 | ) | | $ | (71 | ) | | $ | (83 | ) | | $ | (94 | ) | | $ | (105 | ) | | $ | (116 | ) | | $ | (125 | ) | | $ | (134 | ) | | $ | (142 | ) | (+) (Inc.) / Dec. in Working Capital and Deferred Revenue | | $ | (24 | ) | | $ | (59 | ) | | $ | (23 | ) | | $ | (28 | ) | | $ | (55 | ) | | $ | (107 | ) | | $ | (171 | ) | | $ | (255 | ) | | $ | (322 | ) | | $ | (363 | ) | | $ | (314 | ) | | $ | (292 | ) | | $ | (159 | ) | | $ | (87 | ) | | $ | (61 | ) | Unlevered Free Cash Flow(4) | | $ | (143 | ) | | $ | (80 | ) | | $ | 40 | | | $ | 194 | | | $ | 385 | | | $ | 419 | | | $ | 499 | | | $ | 569 | | | $ | 678 | | | $ | 815 | | | $ | 1,036 | | | $ | 1,214 | | | $ | 1,428 | | | $ | 1,597 | | | $ | 1,718 | | % Margin | | | (10 | )% | | | (5 | )% | | | 2 | % | | | 7 | % | | | 12 | % | | | 10 | % | | | 10 | % | | | 10 | % | | | 10 | % | | | 11 | % | | | 12 | % | | | 13 | % | | | 14 | % | | | 15 | % | | | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FYE Jan | $ in millions | | FQ4’21E | | | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | Revenue | | $ | 245 | | | $ | 1,188 | | | $ | 1,562 | | | $ | 2,012 | | | $ | 2,516 | | | $ | 3,082 | | | $ | 3,698 | | | $ | 4,363 | | | $ | 5,105 | | | $ | 5,922 | | | $ | 6,810 | | % Growth | | | 35 | % | | | 32 | % | | | 31 | % | | | 29 | % | | | 25 | % | | | 23 | % | | | 20 | % | | | 18 | % | | | 17 | % | | | 16 | % | | | 15 | % | Non-GAAP Gross Profit | | $ | 214 | | | $ | 1,045 | | | $ | 1,388 | | | $ | 1,812 | | | $ | 2,265 | | | $ | 2,775 | | | $ | 3,330 | | | $ | 3,929 | | | $ | 4,597 | | | $ | 5,333 | | | $ | 6,133 | | % Margin | | | 87 | % | | | 88 | % | | | 89 | % | | | 90 | % | | | 90 | % | | | 90 | % | | | 90 | % | | | 90 | % | | | 90 | % | | | 90 | % | | | 90 | % | Non-GAAP Operating Income (Loss)1 | | $ | (9 | ) | | $ | 10 | | | $ | 155 | | | $ | 322 | | | $ | 503 | | | $ | 740 | | | $ | 998 | | | $ | 1,294 | | | $ | 1,532 | | | $ | 1,777 | | | $ | 2,043 | | % Margin | | | (4 | )% | | | 1 | % | | | 10 | % | | | 16 | % | | | 20 | % | | | 24 | % | | | 27 | % | | | 30 | % | | | 30 | % | | | 30 | % | | | 30 | % | Unlevered Free Cash Flow1 2 | | $ | 19 | | | $ | 71 | | | $ | 166 | | | $ | 349 | | | $ | 557 | | | $ | 843 | | | $ | 1,101 | | | $ | 1,374 | | | $ | 1,606 | | | $ | 1,843 | | | $ | 2,127 | | % Margin | | | 8 | % | | | 6 | % | | | 11 | % | | | 17 | % | | | 22 | % | | | 27 | % | | | 30 | % | | | 31 | % | | | 31 | % | | | 31 | % | | | 31 | % | Unlevered Free Cash Flow Less Stock-Based Compensation3 | | $ | (43 | ) | | $ | (231 | ) | | $ | (235 | ) | | $ | (149 | ) | | $ | (15 | ) | | $ | 205 | | | $ | 408 | | | $ | 644 | | | $ | 854 | | | $ | 1,089 | | | $ | 1,397 | | % Margin | | | (17 | )% | | | (19 | )% | | | (15 | )% | | | (7 | )% | | | (1 | )% | | | 7 | % | | | 11 | % | | | 15 | % | | | 17 | % | | | 18 | % | | | 21 | % |
| (1) | Excludes the impact of stock-based compensation. |
| (2) | EBITUnlevered free cash flow is calculated as netnon-GAAP operating income before interest and(loss), subtracting the impact of cash taxes, and is presented beforeadding or subtracting (as applicable) the net impact of depreciation and amortization, capital expenditures, changes in net working capital, amortization of deferred costs, non-cash operating lease expense and payroll taxes related to stock-based compensation. Unlevered free cash flow excludes the impact of stock-based compensation. Unlevered free cash flow was used by Qatalyst Partners in performing its financial analysis in connection with its opinion as described in more detail in the section “—Opinion of Qatalyst Partners LP, Slack’s Financial Advisor.”
|
| (3) | EBIT calculatedUnlevered free cash flow less stock-based compensation was used by Goldman Sachs in performing its financial analysis in connection with its opinion as net income before interest and taxes and is presented afterdescribed in more detail in the impactsection “—Opinion of stock-based compensation.
|
(4) | Includes the impact of stock-based compensation.Goldman Sachs & Co. LLC, Slack’s Financial Advisor.”
|
Updated Five-Year Plan and Related Extrapolations
($ in millions)-68-
NOL Schedule | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FYE December 31, | | 9mos
Ended
12/31/19 | | | 2020E | | | 2021E | | | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | | 2032E | | | 2033E | | Revenue | | $ | 1,116 | | | $ | 1,773 | | | $ | 2,180 | | | $ | 2,677 | | | $ | 3,297 | | | $ | 4,023 | | | $ | 4,827 | | | $ | 5,696 | | | $ | 6,607 | | | $ | 7,532 | | | $ | 8,436 | | | $ | 9,280 | | | $ | 10,022 | | | $ | 10,724 | | | $ | 11,367 | | Gross Profit(non-GAAP)(1) | | $ | 1,012 | | | $ | 1,598 | | | $ | 1,961 | | | $ | 2,409 | | | $ | 2,975 | | | $ | 3,610 | | | $ | 4,307 | | | $ | 5,054 | | | $ | 5,830 | | | $ | 6,608 | | | $ | 7,359 | | | $ | 8,049 | | | $ | 8,642 | | | $ | 9,194 | | | $ | 9,689 | | EBIT (non-GAAP)(2) | | $ | 183 | | | $ | 315 | | | $ | 459 | | | $ | 644 | | | $ | 889 | | | $ | 1,080 | | | $ | 1,311 | | | $ | 1,564 | | | $ | 1,834 | | | $ | 2,113 | | | $ | 2,392 | | | $ | 2,659 | | | $ | 2,901 | | | $ | 3,137 | | | $ | 3,359 | | (-) Stock-Based Compensation | | $ | (204 | ) | | $ | (307 | ) | | $ | (351 | ) | | $ | (387 | ) | | $ | (423 | ) | | $ | (484 | ) | | $ | (537 | ) | | $ | (594 | ) | | $ | (658 | ) | | $ | (727 | ) | | $ | (803 | ) | | $ | (886 | ) | | $ | (978 | ) | | $ | (1,032 | ) | | $ | (1,078 | ) | EBIT (non-GAAP)(3) | | $ | (21 | ) | | $ | 8 | | | $ | 108 | | | $ | 257 | | | $ | 466 | | | $ | 596 | | | $ | 774 | | | $ | 969 | | | $ | 1,176 | | | $ | 1,386 | | | $ | 1,588 | | | $ | 1,772 | | | $ | 1,923 | | | $ | 2,105 | | | $ | 2,281 | | (-) Cash Taxes | | $ | (10 | ) | | $ | (25 | ) | | $ | (48 | ) | | $ | (48 | ) | | $ | (52 | ) | | $ | (89 | ) | | $ | (116 | ) | | $ | (145 | ) | | $ | (176 | ) | | $ | (208 | ) | | $ | (238 | ) | | $ | (266 | ) | | $ | (337 | ) | | $ | (421 | ) | | $ | (502 | ) | (+) Depreciation & Amortization | | $ | 47 | | | $ | 67 | | | $ | 77 | | | $ | 87 | | | $ | 100 | | | $ | 104 | | | $ | 106 | | | $ | 105 | | | $ | 118 | | | $ | 129 | | | $ | 140 | | | $ | 152 | | | $ | 162 | | | $ | 171 | | | $ | 179 | | (-) CapEx | | $ | (43 | ) | | $ | (40 | ) | | $ | (40 | ) | | $ | (40 | ) | | $ | (40 | ) | | $ | (50 | ) | | $ | (60 | ) | | $ | (71 | ) | | $ | (83 | ) | | $ | (94 | ) | | $ | (105 | ) | | $ | (116 | ) | | $ | (125 | ) | | $ | (134 | ) | | $ | (142 | ) | (+) (Inc.) / Dec. in Working Capital (ex-Deferred Revenue) | | $ | (161 | ) | | $ | (185 | ) | | $ | (190 | ) | | $ | (224 | ) | | $ | (249 | ) | | $ | (316 | ) | | $ | (396 | ) | | $ | (490 | ) | | $ | (564 | ) | | $ | (600 | ) | | $ | (541 | ) | | $ | (500 | ) | | $ | (337 | ) | | $ | (251 | ) | | $ | (208 | ) | (+) Inc. / (Dec.) in Deferred Revenue | | $ | 66 | | | $ | 95 | | | $ | 134 | | | $ | 163 | | | $ | 159 | | | $ | 174 | | | $ | 191 | | | $ | 200 | | | $ | 207 | | | $ | 202 | | | $ | 192 | | | $ | 172 | | | $ | 142 | | | $ | 128 | | | $ | 109 | | Unlevered Free Cash Flow(4) | | $ | (121 | ) | | $ | (80 | ) | | $ | 40 | | | $ | 194 | | | $ | 385 | | | $ | 419 | | | $ | 499 | | | $ | 569 | | | $ | 678 | | | $ | 815 | | | $ | 1,036 | | | $ | 1,214 | | | $ | 1,428 | | | $ | 1,597 | | | $ | 1,718 | | % Margin | | | (11 | )% | | | (5 | )% | | | 2 | % | | | 7 | % | | | 12 | % | | | 10 | % | | | 10 | % | | | 10 | % | | | 10 | % | | | 11 | % | | | 12 | % | | | 13 | % | | | 14 | % | | | 15 | % | | | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FYE Jan | $ in millions | | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | | 2032E | | Federal NOLs and R&D Tax Credits Gained (Used) | | $ | 356 | | | $ | 309 | | | $ | 242 | | | $ | 141 | | | $ | (21 | ) | | $ | (184 | ) | | $ | (392 | ) | | $ | (564 | ) | | $ | (758 | ) | | $ | (991 | ) | | $ | (184 | ) | Federal Tax Savings1 | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 4 | | | $ | 37 | | | $ | 78 | | | $ | 113 | | | $ | 152 | | | $ | 198 | | | $ | 37 | |
| (1) | Excludes the impactAssumes an effective tax rate of stock-based compensation.20%.
|
(2) | EBIT calculated as net income before interest and taxes and is presented before the impact of stock-based compensation.
|
(3) | EBIT calculated as net income before interest and taxes and is presented after the impact of stock-based compensation.
|
(4) | Includes the impact of stock-based compensation.
|
Important Information About the Management Projections The management projectionsManagement Projections were not prepared with a view toward public disclosure or toward complying with GAAP,U.S. generally accepted accounting principles (which we refer to as “GAAP”), nor were they prepared with a view toward compliance with the published guidelines of the SEC, or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of projections of prospective financial information. The non-GAAP financial measures used in the Updated Five-Year Plan and the related extrapolations for calendar years 2024 through 2033Management Projections were approved by TableauSlack for Goldman Sachs’the use by its financial advisors in connection with its opiniontheir respective opinions and were relied upon by the TableauSlack board of directors in connection with its consideration of the offer, the mergermergers and the transaction consideration. The SEC rules, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure, do not apply to non-GAAP financial measures provided to Qatalyst Partners, Goldman Sachs or to the TableauSlack board of directors in connection with a proposed business combination like the mergermergers if the disclosure is included in a document like this document.proxy statement/prospectus. In addition, reconciliations of non-GAAP financial measures to a GAAP financial measure were not relied upon by Qatalyst Partners or Goldman Sachs for purposes of its opinion or by the TableauSlack board of directors in connection with its consideration of the merger agreement, the offer, the mergermergers and the transaction consideration. Accordingly, TableauSlack has not provided a reconciliation of the financial measures included in the management projectionsManagement Projections to the relevant GAAP financial measures. In addition, the management projectionsManagement Projections were not prepared with a view towards complying with GAAP. The management projectionsManagement Projections may differ from published analyst estimates and forecasts and do not take into account any events or circumstances after the date they were prepared, including the announcement of the merger.mergers. While the management projectionsManagement Projections are presented with numerical specificity, the management projectionsManagement Projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond TableauSlack management’s control. Further, given that the management projectionsManagement Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year beyond their preparation. Important factors that may affect actual results and may result in such projections not being achieved include: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the inability to complete the offer or merger,mergers, or the failure to satisfy other conditions to completion of the offer or the merger,mergers, including that a governmental entity may prohibit, delay or refuse to grant approval for the completion of the merger,mergers, and risks and uncertainties pertaining to Tableau’sour business, including the risks and uncertainties detailed in Tableau’sour public periodic filings with the SEC. In addition, the ability to achieve the management projectionsManagement Projections may depend on, in part, whether or not the strategic goals, objectives and targets are reached over the applicable period. The assumptions upon which the management projectionsManagement Projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which TableauSlack operates, and the risks and uncertainties described in the section of this document titled “Forward-Looking Statements” and in “Item 8—Additional Information—“Cautionary StatementStatements Regarding Forward-Looking Statements” in the Schedule 14D9, which has been filed with the SEC and is being mailed to you and other stockholders of Tableau together with this document,Statements,” all of which are difficult or impossible to predict accurately and many of which are beyond Tableau’s and our control. The management projectionsManagement Projections also reflect assumptions by TableauSlack management that are subject to change and are susceptible to multiple interpretations and periodic revisions based on actual results, revised prospects for the TableauSlack business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated when such projections were prepared. -69-
Accordingly, there can be no assurance that the management projectionsManagement Projections will be realized, and actual results may differ, and may differ materially, from those shown. The inclusion of the management projectionsManagement Projections in this documentproxy statement/prospectus should not be regarded as an indication that any of Tableau,Slack, Qatalyst Partners, Goldman Sachs, Salesforce the Offeror or any of their respective affiliates, officers, directors, advisors or other representatives considered or consider the management projectionsManagement Projections necessarily predictive of actual future events, and the management projectionsManagement Projections should not be relied upon as such. None of Tableau,Slack, Qatalyst Partners, Goldman Sachs, Salesforce the Offeror or any of their respective affiliates, officers, directors, advisors or other representatives can give any assurance that actual results will not differ from the management projections.Management Projections. None of Tableau,Slack, Qatalyst Partners, Goldman Sachs, Salesforce the Offeror or any of their respective affiliates, officers, directors, advisors or other representatives has made or makes any representation to any stockholder or other person regarding the ultimate performance of TableauSlack compared to the information contained in the management projectionsManagement Projections or that forecasted results will be achieved. In addition, the management projectionsManagement Projections have not been updated or revised to reflect information or results after the date they were prepared or as of the date of this document,proxy statement/prospectus, and except as required by applicable securities laws, TableauSlack does not intend to update or otherwise revise the management projectionsManagement Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the underlying assumptions are shown to be in error. The management projectionsManagement Projections were prepared by, and are the responsibility of, Tableau’sSlack’s management. PricewaterhouseCoopers LLP hasThe Management Projections have not audited, reviewed,been audited. Neither the independent registered public accounting firm of Slack nor the independent registered public accounting firm of Salesforce or any other independent accountants, have compiled, examined compiled nor applied agreed-uponor performed any procedures with respect to the management projections and, accordingly, PricewaterhouseCoopers LLP does not express anManagement Projections contained herein, nor have they expressed any opinion or any other form of assurance on such information or their achievability, and the independent accounting firms of Slack and Salesforce assume no responsibility for, and disclaim any association with, respect thereto. The PricewaterhouseCoopers LLP report incorporation by reference relates to Tableau’s previously issued financial statements. It does not extend to the management projections and should not be read to do so.Management Projections. Opinion of Tableau’sQatalyst Partners LP, Slack’s Financial Advisor Goldman SachsSlack retained Qatalyst Partners to act as financial advisor to the Slack board in connection with a potential transaction such as the mergers and to evaluate whether the merger consideration to be received pursuant to, and in accordance with, the terms of the merger agreement by the holders of shares of Slack Class A common stock, in their capacity as holders of Slack Class A common stock (other than Salesforce or any of its affiliates), was fair, from a financial point of view, to such holders. Slack selected Qatalyst Partners to act as its financial advisor based on Qatalyst Partners’ qualifications, expertise, reputation and knowledge of the business and affairs of Slack and the industry in which it operates. Qatalyst Partners has provided its written consent to the reproduction of the Qatalyst Partners’ opinion in this proxy statement/prospectus. At the meeting of the Slack board on December 1, 2020, Qatalyst Partners rendered its oral opinion, subsequently confirmed in writing, that, as of such date and based upon and subject to the considerations, limitations and other matters set forth therein, the consideration of $26.79 in cash and 0.0776 shares of Salesforce common stock per share of Slack Class A common stock to be received pursuant to, and in accordance with, the terms of the merger agreement by the holders of shares of Slack Class A common stock, in their capacity as holders of Slack Class A common stock (other than Salesforce or any of its affiliates), was fair, from a financial point of view, to such holders. Qatalyst Partners delivered its written opinion, dated December 1, 2020, to the Slack board following the meeting of the Slack board.
The full text of Qatalyst Partners’ written opinion, dated December 1, 2020, to the Slack board is attached as Annex B to this proxy statement/prospectus and is incorporated by reference herein. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Qatalyst Partners in rendering its opinion. Slack stockholders should read the opinion carefully and in its entirety. Qatalyst Partners’ opinion was provided to the Slack board and addresses only, as of the date of the opinion, the fairness, from a financial point of view, of the consideration of $26.79 in cash and 0.0776 shares of -70-
Salesforce common stock per share of Slack Class A common stock to be received pursuant to, and in accordance with, the terms of the merger agreement by the holders of shares of Slack Class A common stock, other than Salesforce or any of its affiliates, and it does not address any other aspect of the mergers. It does not constitute a recommendation as to how any Slack stockholder should vote with respect to the merger proposal or any other matter and does not in any manner address the price at which the shares of Slack Class A common stock or shares of Salesforce common stock will trade at any time. The summary of Qatalyst Partners’ opinion set forth herein is qualified in its entirety by reference to the full text of the opinion attached as Annex B to this proxy statement/prospectus. In arriving at its opinion, Qatalyst Partners reviewed the merger agreement, certain related documents, and certain publicly available financial statements and other business and financial information of Slack and Salesforce. Qatalyst Partners also reviewed certain forward-looking information relating to Slack prepared by the management of Slack, including financial projections and operating data of Slack, which are described above in the section entitled “—Projected Financial Information.” Additionally, Qatalyst Partners discussed the past and current operations and financial condition and the prospects of Slack and Salesforce, with senior management of Slack and Salesforce, respectively. Qatalyst Partners also reviewed the historical market prices and trading activity for the shares of Slack Class A common stock and shares of Salesforce common stock, and compared the financial performance of Slack and Salesforce and the prices and trading activity of Slack Class A common stock and Salesforce common stock with that of certain other selected publicly traded companies and their securities. In addition, Qatalyst Partners reviewed the financial terms, to the extent publicly available, of selected acquisition transactions and performed such other analyses, reviewed such other information and considered such other factors as Qatalyst Partners deemed appropriate. In arriving at its opinion, Qatalyst Partners assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to, or discussed with, Qatalyst Partners by Slack and Salesforce. With respect to the Management Projections, Qatalyst Partners was advised by management of Slack, and Qatalyst Partners assumed, that such projections had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Slack of the future financial performance of Slack and other matters covered thereby. Qatalyst Partners assumed that the mergers will be consummated in accordance with the terms set forth in the merger agreement, without any modification, waiver or delay and that the mergers will have the tax consequences as set forth in the merger agreement and as described in discussions with representatives of Slack. In addition, Qatalyst Partners assumed that, in connection with the receipt of all the necessary approvals of the proposed mergers, no delays, limitations, conditions or restrictions will be imposed that could have an adverse effect on Slack, Salesforce or the contemplated benefits expected to be derived in the proposed mergers. Qatalyst Partners did not make any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Slack or Salesforce or their respective affiliates, nor was Qatalyst Partners furnished with any such evaluation or appraisal. In arriving at its opinion, Qatalyst Partners was not authorized to solicit, and did not solicit, interest from any party with respect to an acquisition, business combination or other extraordinary transaction involving Slack. In addition, Qatalyst Partners relied, without independent verification, upon the assessment of the management of Slack as to the existing and future technology and products of Slack and the risks associated with such technology and products. Qatalyst Partners’ opinion has been approved by Qatalyst Partners’ opinion committee in accordance with its customary practice. Qatalyst Partners’ opinion does not constitute a recommendation as to how to vote with respect to the mergers or any other matter and does not in any manner address what the value of shares of Salesforce common stock actually will be when issued pursuant to the mergers or the price at which Slack Class A common stock or Salesforce common stock will trade or otherwise be transferable at any time. Qatalyst Partners’ opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it as of, the date of the opinion. Events occurring after the date of the opinion may affect Qatalyst Partners’ opinion and the assumptions used in preparing it, and Qatalyst Partners has not assumed any obligation to update, revise or reaffirm its opinion. Qatalyst Partners’ opinion does -71-
not address the underlying business decision of Slack to engage in the mergers, or the relative merits of the mergers as compared to any strategic alternatives that may be available to Slack. Qatalyst Partners’ opinion is limited to the fairness, from a financial point of view, of the consideration of $26.79 in cash and 0.0776 shares of Salesforce common stock per share of Slack Class A common stock to be received pursuant to, and in accordance with, the terms of the merger agreement by Slack stockholders, other than Salesforce or any affiliates of Salesforce, and Qatalyst Partners expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of the officers, directors or employees of Salesforce or Slack or any of their respective affiliates, or any class of such persons, relative to such consideration. Qatalyst Partners expressed no opinion regarding the consideration to be received by any holder of Slack Class B common stock under the merger agreement in such holder’s capacity as a holder of Slack Class B common stock. The following is a brief summary of the material analyses performed by Qatalyst Partners in connection with its opinion dated December 1, 2020. The analyses and factors described below must be considered as a whole; considering any portion of such analyses or factors, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Qatalyst Partners’ opinion. For purposes of its analyses, Qatalyst Partners utilized both the consensus of third-party research analysts’ projections of the future financial performance of Slack as of November 30, 2020 (which we refer to as the “analyst projections”) and the Management Projections. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by Qatalyst Partners, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Qatalyst Partners’ financial analyses. Illustrative Discounted Cash Flow Analysis Qatalyst Partners performed an illustrative discounted cash flow (which we refer to as “DCF”) analysis, which is designed to imply a range of estimated potential, present values per share for Slack Class A common stock as of October 31, 2020 by: the implied net present value of the estimated future unlevered free cash flows excluding the impact of stock-based compensation (which we refer to as “UFCF”) of Slack, based on the Management Projections, for fourth quarter of fiscal year 2021 through fiscal year 2026 (which implied present value was calculated by using a range of discount rates of 8.25% to 9.75%, based on an estimated weighted average cost of capital for Slack); the implied net present value of a corresponding terminal value of Slack, calculated by multiplying Slack’s estimated UFCF in fiscal year 2027 of approximately $918 million, based on the Management Projections (but assuming an effective tax rate of 20%, as provided by Slack’s management, and which tax rate excludes the effect of Slack’s estimated remaining federal net operating losses and research and development tax credits for fiscal year 2027, as such tax attributes were separately valued, as described in the second succeeding bullet point below), by a range of fully diluted enterprise value to next-12-month’s estimated UFCF multiples of 30.0x to 45.0x, and discounted to present value using the same range of discount rates used in the calculation of the implied net present value of the estimated future UFCF of Slack described above; the cash and cash equivalents of Slack as of October 31, 2020, as provided by Slack’s management; and -72-
the implied net present value of Slack’s estimated federal tax savings due to its net operating loss balance and research and development tax credits for the fiscal years 2027 and beyond (as provided by Slack’s management and set forth in the NOL Schedule), discounted to present value using the same range of discount rates used in the calculation of the implied net present value of the estimated future UFCF of Slack described above. the face value of Slack’s outstanding convertible debt as of October 31, 2020, as provided by Slack’s management; and the value of Slack’s non-controlling interest as of October 31, 2020, as provided by Slack’s management. dividing the resulting amount by the number of fully-diluted shares of Slack common stock outstanding (calculated using the treasury stock method and including 0.6M shares of Slack common stock issuable under its employee share purchase program), adjusted for stock options, restricted stock units and restricted share awards, and in-the-money convertible debt (calculated using the net share settlement method and excluding any make-whole shares or other change of control adjustments), all as provided by Slack’s management as of November 27, 2020, with each of the above-referenced estimated future UFCFs, terminal value and federal tax savings due to net operating losses and research and development tax credits for the fiscal years 2027 and beyond having also been adjusted for the degree of estimated dilution to current stockholders through each respective applicable period (which totaled approximately 17% in the case of the terminal value) due to the estimated net effects of equity issuances and cancellations related to future equity compensation, based on estimates of future dilution provided by Slack’s management. Based on the calculations set forth above, this analysis implied a range of values for Slack’s common stock of approximately $27.04 to $41.44 per share of Slack Class A common stock. Qatalyst Partners noted that the implied value of the consideration to be received by Slack stockholders pursuant to the merger agreement was $45.86 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 30, 2020 and $47.03 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 24, 2020, the last full trading day before the first published rumor regarding a potential merger transaction. Selected Companies Analysis Qatalyst Partners reviewed and compared selected financial information and public market multiples for Slack with publicly available information and public market multiples for selected companies. The companies used in this comparison were those companies listed below, which were selected by Qatalyst Partners in its professional judgment, based on factors including that they are publicly traded companies in similar lines of business to Slack, having a similar business model, having similar financial performance, or having other relevant or similar characteristics. Based upon research analyst consensus estimates for calendar year 2021, and using the closing prices as of November 30, 2020 for shares of the selected companies, Qatalyst Partners calculated, among other things, the implied fully-diluted enterprise value divided by estimated consensus revenue for calendar year 2021 (which we refer to as the “CY2021E revenue multiples”) for each of the selected companies. | | | | | | Selected Companies | | CY2021E Revenue
Multiple | | Zoom Video Communications, Inc. | | | 45.4x | | Coupa Software Incorporated | | | 41.0x | | Datadog, Inc. | | | 40.6x | | ZoomInfo Technologies Inc. | | | 36.2x | | Okta, Inc. | | | 33.4x | |
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| | | | | | Selected Companies | | CY2021E Revenue
Multiple | | Atlassian Corporation Plc | | | 28.8x | | DocuSign, Inc. | | | 26.1x | | Twilio Inc. | | | 24.8x | 1 | RingCentral, Inc. | | | 20.2x | | Anaplan, Inc. | | | 19.5x | | Asana, Inc. | | | 19.3x | | HubSpot, Inc. | | | 17.8x | | AppFolio, Inc. | | | 16.2x | | Smartsheet Inc. | | | 15.2x | | Everbridge, Inc. | | | 14.7x | | Zendesk, Inc. | | | 13.2x | |
| 1 | Reflects Twilio Inc.’s capitalization pro forma for its acquisition of Segment.io, Inc. based on Twilio Inc.’s public filings as of November 2, 2020. |
The CY2021E revenue multiple for Slack was 15.5x based on the analyst projections using Slack’s closing share price on November 24, 2020. Based on an analysis of the CY2021E revenue multiples for the selected companies and the application of its professional judgment, Qatalyst Partners selected a representative range of 15.0x to 33.0x and applied this range to Slack’s estimated calendar year 2021 revenue based on the analyst projections and to Slack’s estimated fiscal year 2022 revenue based on the Management Projections. Based on the same fully diluted share count as used in the above discounted cash flow analysis, this analysis implied a range of per share values of approximately $30.02 to $63.75 per share of Slack Class A common stock based on the Management Projections and approximately $28.64 to $60.84 per share of Slack Class A common stock based on the analyst projections. Qatalyst Partners noted that the implied value of the consideration to be received by Slack stockholders pursuant to the merger agreement was $45.86 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 30, 2020 and $47.03 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 24, 2020. No company included in the selected companies analysis is identical to Slack. In evaluating the selected companies, Qatalyst Partners made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters. Many of these matters are beyond the control of Slack, such as the impact of competition on the business of Slack and the industry in general, industry growth and the absence of any material adverse change in the financial condition and prospects of Slack or the industry or in the financial markets in general. Individual multiples or mathematical analysis, such as determining the arithmetic mean, median, or the high or low, are not in itself a meaningful method of using selected company data. Selected Transactions Analysis Qatalyst Partners compared thirteen selected public company transactions involving companies in the software industry announced between August 2011 and June 2019, including transactions involving companies -74-
participating in similar lines of business to Slack, having similar business models, having similar financial performance, or having other relevant or similar characteristics. These transactions are listed below: | | | | | | | | | | | | | Announcement Date | | Target | | Acquirer | | Transaction Multiples | | | Revenue LTM | | | Revenue NTM | | June 10, 2019 | | Tableau Software, Inc. | | salesforce.com, inc. | | | 13.2x | | | | 10.9x | | February 4, 2019 | | The Ultimate Software Group, Inc. | | Hellman & Friedman | | | 10.0x | | | | 8.4x | | October 28, 2018 | | Red Hat, Inc. | | International Business Machines Corporation | | | 10.6x | | | | 9.3x | | October 15, 2018 | | SendGrid, Inc. | | Twilio Inc. | | | 14.3x | | | | 11.5x | | March 20, 2018 | | MuleSoft, Inc. | | salesforce.com, inc. | | | 21.8x | | | | 15.7x | | January 29, 2018 | | Callidus Software Inc. | | SAP SE | | | 9.8x | | | | 8.3x | | December 17, 2017 | | Aconex Limited | | Oracle Corporation | | | 9.4x | | | | 8.1x | | July 28, 2016 | | NetSuite Inc. | | Oracle Corporation | | | 11.8x | | | | 9.1x | | June 1, 2016 | | Demandware, Inc. | | salesforce.com, inc. | | | 11.2x | | | | 8.9x | | September 18, 2014 | | Concur Technologies, Inc. | | SAP SE | | | 12.6x | | | | 10.2x | | December 20, 2012 | | Eloqua, Inc. | | Oracle Corporation | | | 9.8x | | | | 8.2x | | December 3, 2011 | | SuccessFactors, Inc. | | SAP SE | | | 10.9x | | | | 8.7x | | August 18, 2011 | | Autonomy Corporation plc | | Hewlett-Packard Company | | | 11.8x | | | | 9.6x | |
For each of the transactions listed above, Qatalyst Partners reviewed, among other things, the implied fully-diluted enterprise value of the target company as a multiple of analyst estimates of the next-12-months revenue of the target company. Based on the analysis of such metrics for the transactions noted above, Qatalyst Partners selected a representative range of 10.0x to 20.0x applied to Slack’s estimated next-12-months revenue (calculated as the four quarters ending on July 31, 2021 and based on the analyst projections). Based on the same fully diluted share count as used in the above discounted cash flow analysis (with the exception of assuming cash settlement of the convertible notes with an assumed make-whole adjustment and cash settlement of the capped calls based on a Black-Scholes option calculation model, each based on an assumed March 15, 2021 closing date for the mergers), this analysis implied a range of values for Slack’s common stock of approximately $17.95 to $33.15 per share of Slack Class A common stock. Qatalyst Partners noted that the implied value of the consideration to be received by Slack stockholders pursuant to the merger agreement was $45.86 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 30, 2020 and $47.03 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 24, 2020. For each of the transactions listed above, Qatalyst Partners also reviewed the implied fully-diluted enterprise value of the target company as a multiple of the last-12-months revenue of the target company. Based on the analysis of such metrics for the transactions noted above, Qatalyst Partners selected a representative range of 15.0x to 30.0x applied to Slack’s last-12-months revenue (calculated as the four quarters ending on July 31, 2020). Based on the same fully diluted share count as used in the immediately preceding paragraph, this analysis implied a range of values for Slack’s common stock of approximately $20.44 to $38.15 per share of Slack Class A common stock. Qatalyst Partners noted that the implied value of the consideration to be received by Slack stockholders pursuant to the merger agreement was $45.86 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 30, 2020 and $47.03 per share of Slack Class A common stock, based on Salesforce’s closing stock price on November 24, 2020. No company or transaction utilized in the selected transactions analysis is identical to Slack or the mergers. In evaluating the selected transactions, Qatalyst Partners made judgments and assumptions with regard to general business, market and financial conditions and other matters, many of which are beyond the control of Slack, such as the impact of competition on the business of Slack or the industry generally, industry growth and the absence of any material adverse change in the financial condition of Slack or the industry or in the financial markets in general, which could affect the public trading value of the companies and the aggregate value of the transactions -75-
to which they are being compared. Individual multiples or mathematical analysis, such as determining the arithmetic mean, median, or the high or low, are not in itself a meaningful method of using selected company data. Because of the unique circumstances of each of these transactions and the mergers, Qatalyst Partners cautioned against placing undue reliance on this information. Miscellaneous In connection with the review of the mergers by the Slack board, Qatalyst Partners performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily amenable to a partial analysis or summary description. In arriving at its opinion, Qatalyst Partners considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Qatalyst Partners believes that selecting any portion of its analyses, without considering all analyses as a whole, could create a misleading or incomplete view of the process underlying its analyses and opinion. In addition, Qatalyst Partners may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Qatalyst Partners’ view of the actual value of Slack. In performing its analyses, Qatalyst Partners made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of Slack. Any estimates contained in Qatalyst Partners’ analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates. Qatalyst Partners conducted the analyses described above solely as part of its analysis of the fairness, from a financial point of view, of the consideration of $26.79 in cash and 0.0776 shares of Salesforce common stock per share of Slack Class A common stock to be received pursuant to, and in accordance with, the terms of the merger agreement by Slack stockholders, other than Salesforce or any affiliates of Salesforce, and in connection with the delivery of its opinion to the TableauSlack board. Qatalyst Partners expressed no opinion regarding the consideration to be received by any holder of Slack Class B common stock under the merger agreement in such holder’s capacity as a holder of Slack Class B common stock. These analyses do not purport to be appraisals or to reflect the price at which Slack Class A common stock might actually trade. Qatalyst Partners’ opinion and its presentation to the Slack board was one of many factors considered by the Slack board in deciding to approve the merger agreement. The analyses as described above should not be viewed as determinative of the opinion of the Slack board with respect to the consideration of $26.79 in cash and 0.0776 shares of Salesforce common stock per share of Slack Class A common stock to be received by Slack stockholders pursuant to the mergers or of whether the Slack board would have been willing to agree to a different consideration. The consideration of $26.79 in cash and 0.0776 shares of Salesforce common stock per share of Slack Class A common stock was determined through arm’s-length negotiations between Slack and Salesforce and was approved by the Slack board. Qatalyst Partners provided advice to Slack during these negotiations. Qatalyst Partners did not, however, recommend any specific consideration to Slack or that any specific consideration constituted the only appropriate consideration for the mergers. Qatalyst Partners provides investment banking and other services to a wide range of corporations and individuals, domestically and offshore, from which conflicting interests or duties may arise. In the ordinary course of these activities, affiliates of Qatalyst Partners may at any time hold long or short positions, and may trade or otherwise effect transactions in debt or equity securities or loans of Slack, Salesforce or certain of their respective affiliates. During the two year period prior to December 1, 2020, the date of Qatalyst Partners’ written opinion, no material relationship existed between Qatalyst Partners or any of its affiliates and Slack or Salesforce pursuant to which compensation was received by Qatalyst Partners or its affiliates. Qatalyst Partners and/or its affiliates may in the future provide investment banking and other financial services to Slack or Salesforce or any of their respective affiliates for which it would expect to receive compensation. -76-
Under the terms of its engagement letter, Qatalyst Partners provided Slack with financial advisory services in connection with the proposed mergers for which it will be paid approximately $60 million (provided that the final actual fee will be, in part, based on an average of the closing price of Salesforce common stock over ten consecutive trading days up to and including the second trading day immediately preceding the closing of the mergers, and, accordingly, the final fee may vary significantly from this estimate), $5 million of which was payable upon delivery of its opinion dated December 1, 2020 (regardless of the conclusion reached in the opinion), and the remaining portion of which will be paid upon, and subject to, the closing of the mergers. Slack has also agreed to reimburse Qatalyst Partners for its expenses incurred in performing its services. Furthermore, Slack has also agreed to indemnify Qatalyst Partners and its affiliates, their respective members, directors, officers, partners, agents and employees and any person controlling Qatalyst Partners or any of its affiliates against certain liabilities, including liabilities under the federal securities laws, and expenses related to or arising out of Qatalyst Partners’ engagement. Opinion of Goldman Sachs & Co. LLC, Slack’s Financial Advisor At a meeting of the Slack board held on December 1, 2020, Goldman Sachs rendered to the Slack board its oral opinion, subsequently confirmed in its written opinion dated December 1, 2020, that, as of June 9, 2019the date of the written opinion and based upon and subject to the factors and assumptions set forth therein, the transactionmerger consideration to be paid to the holders of Tableau common stock (other than Salesforce and its affiliates) of shares of Slack common stock, taken in the aggregate, pursuant to the merger agreement was fair from a financial point of view to such holders. The full text of the written opinion of Goldman Sachs, dated June 9, 2019,December 1, 2020, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. The summary of the Goldman Sachs opinion contained in this document is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. C. Goldman Sachs provided advisory services and its opinion for the information and assistance of Tableauthe Slack board of directors in connection with its consideration of the mergers and other transactions contemplated by the merger agreement.agreement (which are together referred to in this section of the proxy statement/prospectus as the “transaction”). The Goldman Sachs opinion isdoes not constitute a recommendation as to whether or nothow any holder of Tableaushares of Slack common stock should tender such shares of Tableau common stock in connectionvote with respect to the offer.transaction or any other matter. In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things: the annual report to stockholders and Annual Report on Form 10-K of Slack for the fiscal year ended January 31, 2020; the registration statement on Form S-1 of Slack, dated April 26, 2019, as amended, including the prospectus contained therein, relating to the registration and resale of Slack Class A common stock; annual reports to stockholders and Annual Reports on Form 10-K of Tableau and Salesforce for the five fiscal years ended December 31, 2018 and January 31, 2019, respectively.2020; certain interim reports to stockholders and Quarterly Reports on Form 10-Q of TableauSlack and Salesforce; certain other communications from TableauSlack and Salesforce to their respective stockholders; certain publicly available research analyst reports for TableauSlack and Salesforce; and the Management Projections, including certain internal financial analyses and forecasts for Tableau and certain financial analyses and forecasts for Salesforce pro-forma for the transactions, in each case, as prepared by the management of Tableau andSlack related to the expected utilization by Slack of certain net operating loss carryforwards of Slack, as approved for Goldman Sachs’ use by Tableau (which we referSlack, which are referred to as the “Forecasts”). For more information regarding the Forecasts, see above under the caption “—Projected Financial Information”.“NOL Forecasts.” Goldman Sachs also held discussions with members of the senior managements of TableauSlack and Salesforce regarding their assessment of the strategic rationale for,past and the potential benefits current business operations, financial condition, and future prospects -77-
of the transactionsSalesforce, and with members of senior management of Slack regarding their assessment of the past and current business operations, financial condition and future prospects of Tableau and Salesforce;Slack; reviewed the reported price and trading activity for theshares of Slack Class A common stock and theshares of Salesforce common stock; compared certain financial and stock market information for TableauSlack and Salesforce with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the software industry and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate. For purposes of rendering its opinion, Goldman Sachs, with Tableau’sthe consent of the Slack board, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by Goldman Sachs,it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with Tableau’sthe consent of the Slack board that the Management Projections and the NOL Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of Tableau.Slack. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of TableauSlack or Salesforce or any of their respective subsidiaries and Goldman Sachsit was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the transactionstransaction will be obtained without any adverse effect on TableauSlack or Salesforce or on the expected benefits of the transactionstransaction in any way meaningful to its analysis. Goldman Sachs also assumed that the transactionstransaction will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis. Goldman Sachs’ opinion does not address the underlying business decision of TableauSlack to engage in the transactionstransaction or the relative merits of the transactionstransaction as compared to any strategic alternatives that may be available to Tableau;Slack; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs was not requested to solicit, and did not solicit, interest from other parties with respect to anthe acquisition of, or other business combination with, TableauSlack or any other alternative transaction. Goldman Sachs’ opinion addresses only the fairness from a financial point of view, as of the date of its opinion, to the holders of Tableau common stock (other than Salesforce and its affiliates), as of shares of Slack common stock, of the date of the opinion, of the transactionmerger consideration to be paid to such holders, taken in the aggregate, pursuant to the merger agreement. Goldman Sachs’ opinion does not express any view on, and does not address, any other term or aspect of the merger agreement or the transactionstransaction or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the transactions,transaction, including any ongoing obligations of Slack, any allocation of the transactionmerger consideration payable pursuant to the merger agreement, including among the holders of Slack Class A common stock and the holders ofSlack Class B common stock, the fairness of the transactionstransaction to, or any transaction consideration received in connection therewith, by the holders of any other class of securities, creditors, or other constituencies of Tableau;Slack; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of TableauSlack, or any class of such persons, in connection with the transactions,transaction, whether relative to the transactionmerger consideration to be paid to the holders (other than Salesforce and its affiliates) of Tableaushares of Slack common stock, taken in the aggregate, pursuant to the merger agreement or otherwise. Goldman Sachs doesdid not express any opinion as to the prices at which shares of Slack Class A common stock or Salesforce common stock will trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on Slack, Salesforce or the transaction, or as to the impact of the transactionstransaction on the solvency or viability of TableauSlack or Salesforce or the ability of TableauSlack or Salesforce to pay their respective obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to it as of, the date of theits written opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its written opinion. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the TableauSlack board of directors in connection with its consideration of the transactionstransaction and Goldman Sachs’such opinion does not constitute a recommendation as to whether or nothow any holder of shares of TableauSlack common stock should tendervote with respect to such shares of Tableau common stock in connection with the offer.transaction or any other matter. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs. -78-
Summary of Financial Analyses The following is a summary of the material financial analyses deliveredpresented by Goldman Sachs to the TableauSlack board of directors in connection with rendering to the Slack board the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before June 7, 2019,November 30, 2020, the last trading day before the public announcement of the transactions,transaction (which we refer to for the purposes of this section of the proxy statement/prospectus as the “pre-announcement date”) and is not necessarily indicative of current market conditions. Historical Exchange Ratio Analysis.Goldman Sachs reviewed the historical trading prices for Tableau common stockImplied Premia and Salesforce common stock for the 52-week period prior to June 7, 2019. Multiple Analysis
Goldman Sachs calculated historical average exchange ratios over various periods by first dividingand compared certain implied premia and multiples using an implied value of the closing pricemerger consideration per share of TableauSlack common stock on eachas of November 24, 2020, the last trading day duringdate prior to the periodfirst media accounts regarding a possible acquisition of Slack by Salesforce (which is referred to in this section of the proxy statement/prospectus as the “unaffected date”) and as of the pre-announcement date. For purposes of its analysis, Goldman Sachs calculated an implied value of the merger consideration per share of Slack common stock of $47.03 as of the unaffected date (which is referred to in this section of the proxy statement/prospectus as the “unaffected implied merger consideration”) by adding (i) the cash consideration of $26.79 to (ii) an implied value of the stock consideration of $20.24, calculated by multiplying the exchange ratio of 0.0776 by the closing price per share of Salesforce common stock on the sameunaffected date of $260.84. Goldman Sachs also calculated an implied value of the merger consideration per share of Slack common stock of $45.86 as of the pre-announcement date (which is referred to in this section of the proxy statement/prospectus as the “pre-announcement implied merger consideration”) by adding (i) the cash consideration of $26.79 to (ii) an implied value of the stock consideration of $19.07, calculated by multiplying the exchange ratio of 0.0776 by the closing price per share of Salesforce common stock on the pre-announcement date of $245.80. Goldman Sachs then compared these implied merger considerations to (i) the closing price of shares of Slack Class A common stock on the unaffected date (which price is referred to in this section of the proxy statement/prospectus as the “unaffected closing price”), (ii) the volume weighted average price (which is referred to in this section of the proxy statement/prospectus as the “VWAP”) of shares of Slack Class A common stock during the 10 trading-day period ended on the unaffected date (which is referred to in this section of the proxy statement/prospectus as the “10-day VWAP”), (iii) the VWAP of shares of Slack Class A common stock during the 20 trading day period ended on the unaffected date (which is referred to in this section of the proxy statement/prospectus as the “20-day VWAP”), (iv) the VWAP of shares of Slack Class A common stock during the three calendar month period ended on the unaffected date (which is referred to in this section of the proxy statement/prospectus as the “three-month VWAP”), and subsequently taking(v) the averagehighest closing price of shares of Slack Class A common stock over the 52-week period ended on the unaffected date (which is referred to in this section of the proxy statement/prospectus as the “52-week high”). The results of these dailycalculations are as follows: | | | | | Slack Common Stock Reference Price | | Implied Premium to Unaffected
Implied Merger Consideration | | Implied Premium to
Pre-Announcement Implied Merger
Consideration | Unaffected Closing Price of $29.58 | | 59% | | 55% | 10-day VWAP of $29.52 | | 59% | | 55% | 20-day VWAP of $26.92 | | 75% | | 70% | Three-month VWAP of $27.63 | | 70% | | 66% | 52-Week High of $39.90 | | 18% | | 15% |
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In addition, Goldman Sachs calculated implied equity values for Slack by multiplying (i) each of the unaffected implied merger consideration and the pre-announcement implied merger consideration by (ii) the number of fully diluted outstanding shares of Slack common stock as of such dates, as provided by the management of Slack and approved for Goldman Sachs’ use by the management of Slack. Goldman Sachs then calculated implied enterprise values for Slack (which are referred to in this section of the proxy statement/prospectus as “EV”) by adding to each of such implied equity values, Slack’s net debt as of such dates, as provided by the management of Slack and approved for Goldman Sachs’ use by the management of Slack. For purposes of this section of the proxy statement/prospectus, “net debt” refers to debt (including amounts associated with the assumed conversion of the convertible notes at their original conversion rate less amounts assumed to be received by Slack pursuant to the capped call transactions entered into by Slack in connection therewith) and non-controlling interests less cash. Using the foregoing, Goldman Sachs calculated the following implied multiples: Implied EV of Slack, calculated as of the unaffected date, as a multiple of next twelve month (“NTM”) revenue of Slack, using Wall Street research analyst consensus estimates; Implied EV of Slack, calculated as of the pre-announcement date, as a multiple of NTM revenue of Slack, using Wall Street research analyst consensus estimates; Implied EV of Slack, calculated as of the unaffected date, as a multiple of fiscal year 2022 revenues of Slack using the Management Projections and Wall Street research analyst consensus estimates; and Implied EV of Slack, calculated as of the pre-announcement date, as a multiple of fiscal year 2022 revenues of Slack using the Management Projections and Wall Street research analyst consensus estimates. The results of these calculations are as follows: | | | | | Metric | | Implied EV//Revenue Multiple as of
Unaffected Date | | Implied EV/Revenue Multiple as of
Pre-Announcement Date | NTM Estimated Revenue (Wall Street Research Analyst Consensus Estimates) | | 29.2x | | 28.4x | Fiscal year 2022E Revenue (Wall Street Research Analyst Estimates) | | 25.5x | | 24.8x | Fiscal year 2022E Revenue (Management Projections) | | 24.3x | | 23.6x |
Illustrative Discounted Cash Flow Analysis Using the Management Projections, Goldman Sachs performed an illustrative discounted cash flow analysis on Slack to derive a range of illustrative present values per share of Slack common stock. Using discount rates ranging from 6.5% to 9.5%, reflecting estimates of Slack’s weighted average cost of capital, and the mid-year convention, Goldman Sachs discounted to present value as of October 31, 2020 (i) estimates of unlevered free cash flow (which is referred to as “Unlevered Free Cash Flow Less Stock-Based Compensation” as described under the section entitled —“Projected Financial Information”) for Slack for the years 2021 through 2031 as reflected in the Management Projections and (ii) a range of illustrative terminal values for Slack, which were calculated by applying an illustrative range of terminal year multiples of 25.0x to 35.0x to an assumed terminal year NTM unlevered free cash flow (which analysis implied perpetuity growth rates ranging from 2.3% to 6.3%). Goldman Sachs derived such discount rates by application of the Capital Asset Pricing Model, which requires certain company-specific inputs, including Slack’s target capital structure weightings, the cost of long-term debt, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The illustrative terminal value to NTM unlevered free cash flow -80-
multiple range for Slack was derived by Goldman Sachs using its professional judgment and experience, taking into account, among other things, EV as of November 30, 2020 as a multiple of to NTM unlevered free cash flow for large cap software peers, based on financial and trading data as of November 30, 2020 and Institutional Brokers’ Estimate System (“IBES”) estimates (as described below under the section entitled “—Selected Companies Analysis”). Goldman Sachs derived a range of illustrative enterprise values for Slack by adding the range of present values it calculated for the unlevered free cash flow and for the illustrative terminal values, as described above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for Slack, the net debt of Slack and added the net present value of the net operating losses as reflected in the NOL Forecasts, each as provided by the management of Slack and approved for Goldman Sachs’ use by the management of Slack, to derive a range of illustrative equity values for Slack. Goldman Sachs calculated the net present value of the net operating losses using an illustrative discount rate of 8.0%, reflecting an estimate of Slack’s cost of equity. Goldman Sachs derived such discount rate by application of the Capital Asset Pricing Model, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Slack common stock, as provided by the management of Slack and approved for Goldman Sachs’ use by the management of Slack and the treasury stock method, to derive a range of illustrative present values per share of Slack common stock, rounded to the nearest $1.00, of $26 to $46. Illustrative Present Value of Future Share Price Analysis Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of Slack common stock. For this analysis, Goldman Sachs used the Management Projections for each of the fiscal years 2022 to 2024. Goldman Sachs first calculated the implied enterprise values for Slack as of January 31 for each of the fiscal years 2021 to 2023, by applying enterprise value to NTM revenue multiples, which are referred to in this section as “EV/NTM revenue,” of 16.0x to 20.0x to NTM revenue estimates for Slack for each of the fiscal years 2022 to 2024 based on the Management Projections. These illustrative multiple estimates were derived by Goldman Sachs using its professional judgment and experience, taking into account current and historical exchange ratios over such periods (such period,EV/NTM revenue multiples for Slack and for selected companies (as described below under the “Average Exchange Ratio”section entitled “—Selected Companies Analysis”). Goldman Sachs then calculatedsubtracted the premiums impliedamount of Slack’s forecasted net debt for each of the fiscal years 2021 to 2023, respectively, as of the relevant year-end, each as provided by Slack and approved for Goldman Sachs’ use by the exchange ratiomanagement of Slack, from the respective implied enterprise values in order to derive a range of illustrative equity values for Slack as of January 31 for each of the fiscal years 2021 to 2023. Goldman Sachs then divided the results by the number of projected year-end fully diluted outstanding shares of Slack common stock for each of the fiscal years 2021 to 2023, respectively, as provided by the management of Slack and approved for Goldman Sachs’ use by the management of Slack to derive a range of implied future share prices. Goldman Sachs then discounted the January 31, 2021 to January 31, 2023 implied future share price values back to October 31, 2020 using an illustrative discount rate of 8.0%, reflecting an estimate of Slack’s cost of equity. Goldman Sachs derived such discount rate by application of the Capital Asset Pricing Model, which requires certain company-specific inputs, including a beta for Slack, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied present values per share of Slack common stock, rounded to the historical average exchange ratio over various periods. nearest $1.00, of $31 to $50 per share. Selected Transactions Analysis Goldman Sachs analyzed certain publicly available information relating to the following selected transactions in the software industry since 2016. For each of the selected transactions where information was publicly available, Goldman Sachs calculated and compared the implied EV/NTM revenue of the applicable target company based on the total consideration paid in the transaction as a multiple of the target company’s -81-
NTM revenue based on IBES estimates at the time each such selected transaction was announced. While none of the target companies that participated in the selected transactions are directly comparable to Slack, the target companies that participated in the selected transactions are companies with operations that, for the purpose of analysis, may be considered similar to certain of Slack’s results, market size and product profile. The following table presents the results of this analysis: | | | | | | | | | Historical Date or PeriodSelected Precedent Transactions
| | Exchange Ratio | | | Premium of Exchange Ratio
per Merger Agreement to
Historical Average | | Exchange Ratio per the merger agreement
| | | 1.103x | | | | | | June 7, 2018
| | | 0.776x | | | | 42.1 | % | 52-week high
| | | 0.940x | | | | 17.3 | % | 5-day period ending June 7, 2019
| | | 0.754x | | | | 46.3 | % | 10-day period ending June 7, 2019
| | | 0.745x | | | | 48.1 | % | 30-day period ending June 7, 2019
| | | 0.755x | | | | 46.2 | % | 90-day period ending June 7, 2019
| | | 0.783x | | | | 41.0 | % |
Historical Stock Trading Analysis. Goldman Sachs reviewed the historical trading prices and volumes of Tableau common stock for the 90-day period ended June 7, 2019. This analysis indicated that the implied price per share to be paid to Tableau stockholders based on the exchange ratio of 1.103x pursuant to the merger agreement represented:
a premium of 52.1% based on the average closing trading price of $116.93 per share of Tableau common stock during the 5-day period prior to June 7, 2019;
a premium of 54.6% based on the average closing trading price of $115.09 per share of Tableau common stock during the 10-day period prior to June 7, 2019;
a premium of 49.7% based on the average closing trading price of $118.80 per share of Tableau common stock during the 30-day period prior to June 7, 2019; and
a premium of 43.2% based on the average closing trading price of $124.19 per share of Tableau common stock during the 90-day period prior to June 7, 2019.
Illustrative Discounted Cash Flow Analysis. Using the Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis on Tableau. Using discount rates ranging from 8.0% to 10.0%, reflecting estimates of Tableau’s weighted average cost of capital, Goldman Sachs discounted to present value as of Tableau’s latest reported balance sheet date of March 31, 2019 using the mid-year convention, (i) estimates of unlevered free cash flow for Tableau for the nine months ended December 31, 2019 and years 2020 through 2033 as reflected in the Forecasts and (ii) a range of illustrative terminal values for Tableau, which were calculated by applying perpetuity growth rates ranging from 2.5% to 4.5%, to a terminal year estimate of free cash flow to be generated
by Tableau as reflected in the Forecasts (which analysis implied exit terminal year multiples for next twelve months net operating profit after tax ranging from 13.5x to 28.7x). Goldman Sachs derived such discount rates by application of the Capital Asset Pricing Model (“CAPM”), which requires certain company-specific inputs, including Tableau’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for Tableau, as well as certain financial metrics for the United States financial markets generally. The range of perpetuity growth rates was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account the Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs derived ranges of illustrative enterprise values for Tableau by adding the ranges of present values it derived above. Goldman Sachs then added to the range of illustrative enterprise values it derived for Tableau the net cash held by Tableau, in each case, as provided by the management of Tableau to derive a range of illustrative equity values for Tableau. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Tableau, as provided by the management of Tableau to calculate a range of implied equity values per share of Tableau common stock of $114 to $239, as rounded to the nearest dollar, which implied an illustrative range of exchange ratios of 0.710x to 1.480x per share of Tableau common stock based on the closing price per share of $161.27 of Salesforce common stock as of June 7, 2019.
Precedent Premium Analysis.Using publicly available information, Goldman Sachs reviewed and analyzed acquisition premia for transactions announced during the time period from January 1, 2016 through June 7, 2019, involving a public company based in the United States in the technology industry as the target, where the disclosed transaction value was over $500 million. For the entire period, Goldman Sachs calculated the 25th and 75th percentile premia of the price paid in the transactions relative to the target company’s stock price as of certain dates and certain time periods, as described below.
Goldman Sachs calculated the 25thand 75th percentile premia relative to the target company’s stock price one trading day prior to the announcement of the applicable transaction. This analysis indicated a 25th and 75thpercentile premium of 11.0% and 33.8%, respectively. Using this analysis, Goldman Sachs applied an illustrative reference range of premia ranging from 11.0% to 33.8% to the closing price per share of Class A common stock of $125.21 per share as of June 7, 2019, which was one trading day prior to the announcement of the transactions contemplated by the merger agreement, and calculated a range of implied equity values per share of Tableau common stock of $139 to $168, as rounded to the nearest dollar, which implied an illustrative range of exchange ratios of 0.862x to 1.039x per share of Tableau common stock based on the closing price per share of Salesforce common stock of $161.27 as of June 7, 2019.
Goldman Sachs also calculated the 25th and 75th percentile premia relative to the target company’s stock price 30 trading days prior to the announcement of the applicable transaction. This analysis indicated a 25th and 75th percentile premium of 21.2% and 45.5%, respectively. Using this analysis, Goldman Sachs applied an illustrative reference range of premia ranging from 21.2% to 45.5% to the closing price per share of Class A common stock of $120.70 per share as of April 26, 2019, which was 30 trading days prior to the announcement of the transactions contemplated by the merger agreement, and calculated a range of implied equity values per share of Tableau common stock of $146 to $176, as rounded to the nearest dollar, which implied a range of illustrative exchange ratios of 0.907x to 1.089x per share of Tableau common stock based on the closing price per share of Salesforce common stock of $161.27 as of June 7, 2019.
Goldman Sachs also calculated the 25th and 75th percentile premia (discount) relative to the target company’s stock price at its 52-week high prior to the announcement of the applicable transaction. This analysis indicated a 25th and 75th percentile premium of (2.2%) and 11.6%, respectively. Using this analysis, Goldman Sachs applied an illustrative reference range of premia (discount) of (2.2%) to 11.6% to the closing price per share of Class A common stock of $136.64 per share as of March 21, 2019, which was the date that the Class A common stock reached its 52-week high prior to the announcement of the transactions contemplated by the merger agreement, and calculated a range of implied equity values per share of Tableau common stock of $134 to $152, as rounded to the nearest dollar, which implied a range of illustrative exchange ratios of 0.829x to 0.946x per share of Tableau common stock based on the closing price per share of Salesforce common stock of $161.27 as of June 7, 2019.
Precedent Transactions Analysis.Goldman Sachs analyzed certain information relating to the following transactions in the software industry announced between October 2011 and June 2019.
| | | | | | | | | Selected Transactions | Announcement
Date | | AcquirerAcquiror
| | Target | | EV/NTM Transaction
Revenue Multiple | | Growth-Adjusted
NTM Transaction
Revenue Multiple
| October 2011 | | Oracle Corp. | | RightNow Technologies, Inc. | | 6.5x | | 0.34x | December 2011 | | SAP SE | | SuccessFactors, Inc. | | 8.7x | | 0.23x | February 2012 | | Oracle Corp. | | Taleo Corp | | 5.3x | | 0.23x | May 2012 | | SAP America, Inc. | | Ariba, Inc. | | 7.7x | | 0.59x | December 2012 | | Oracle Corp. | | Eloqua, Inc. | | 8.1x | | 0.41x | June 2013 | | Salesforce | | ExactTarget, Inc. | | 6.4x | | 0.26x | July 2013 | | Cisco Systems, Inc. | | Sourcefire Inc. | | 8.1x | | 0.32x | December 2013 | | Oracle Corp. | | Responsys, Inc. | | 6.7x | | 0.37x | September 2014 | | SAP America, Inc. | | Concur Technologies, Inc. | | 9.9x | | 0.46x | October 2015 | | Silver Lake Management, LLC /Thoma Bravo, LLC | | Solarwinds Corp. | | 7.7x | | 0.42x | | April 2016 | | Oracle Corp. | | Textura Corp. | | | 6.1x | | 0.24x | | May 2016 | | Vista Equity Partners (“Vista”) | | Marketo, Inc. | | | 5.9x | | 0.22x | | June 2016 | | Microsoft Corp. (“Microsoft”) | | LinkedIn Corp. | | | 6.8x | | 0.32x | | June 2016 | | Salesforce | | Demandware, Inc. | | | 8.9x | | 0.34x | | July 2016 | | Oracle Corp. | | NetSuite Inc. | | | 9.2x | | 0.31x | | January 2018 | | SAP America, Inc.SE (“SE”) | | Callidus Software, Inc. | | 7.9x | 8.3x | | 0.43x | | March 2018 | | Salesforce | | MuleSoft Inc. | | | 15.7x | | 0.40x | | June 2018 | | Workday, Inc. | | Adaptive Insights, Inc. | | | 10.9x | | 0.45x | JulyOctober 2018 | | BroadcomCloudera, Inc. | | CA,Hortonworks, Inc. | | 4.3x | 5.3x | | | October 2018 | | NMInternational Business Machines Corp | | Red Hat, Inc. | | | 9.4x | | | October 2018 | | Twilio Inc. | | SendGrid, Inc. | | | 11.5x | | 0.46x | October 2018 | | IBM Corp. | | Red Hat, Inc. | | 9.4x | | 0.65x | October 2018 | | Cloudera, Inc. | | Hortonworks, Inc. | | 5.3x | | 0.25x | | November 2018 | | Vista Equity Partners | | Apptio, Inc. | | | 7.1x | | 0.47x | | December 2018 | | Vista Equity Partners | | Mindbody, Inc. | | | 6.7x | | 0.28x | | February 2019 | | Hellman & Friedman LLC | | The Ultimate Software Group, Inc. | | | 8.3x | | 0.42xJune 2019 | | Salesforce | | Tableau Software, Inc. | | | 11.0x | | | | | Median | | | 8.3x | | | 25th Percentile | | | 6.7x | | | 75th Percentile | | | 10.9x | |
While noneBased on the results of the companies that participatedforegoing calculations and Goldman Sachs’ analyses of the various transactions and its professional judgment, Goldman Sachs applied a reference range of EV/NTM revenue multiples of 10.0x to 20.0x to Slack’s NTM revenue for the quarter ended October 31, 2020, as provided by the management of Slack, as reflected in the selected transactions are directly comparableManagement Projections to Tableau, the companies that participated in the selected transactions are companies with operations, results, market sizes and product profiles that,derive a range of implied enterprise values for the purposes of analysis, may be considered similar to that of Tableau.
For each of the selected transactions,Slack. Goldman Sachs calculated and comparedthen subtracted from the estimated transactionrange of implied enterprise value, which is (x)values the announced per share consideration paid or payable innet debt for Slack as of October 31, 2020 as provided by the applicable transaction multipliedmanagement of Slack, to derive a range of illustrative equity values for Slack. Goldman Sachs divided the results by the number of fully diluted outstanding shares of Slack common stock as provided by the target company plus (y)management of Slack, to derive a range of implied values per share of Slack common stock, rounded to the net debtnearest $1.00, of $17 to $33.
Premia Analysis Goldman Sachs reviewed and analyzed, using publicly available information, the acquisition premia for the selected transactions referred to above under the section entitled “—Selected Transactions Analysis,” to the extent premia data was available. Using publicly available information, Goldman Sachs calculated the median, 25th percentile and 75th percentile premia of the target company,price paid in each case based on data obtained from public filings, as a multiplethe transactions relative to the target’s last undisturbed closing stock price prior to the announcement of the target’s estimated next twelve months revenue from the announcement datetransaction. This analysis indicated a median premium of the transaction based on Institutional Broker’s Estimate System (“IBES”) consensus estimates45%. This analysis also indicated a 25th percentile premium of 19% and Wall Street Research (which we refer to as the “NTM transaction revenue multiple”)a 75th percentile premium of 62%. Using this analysis, Goldman Sachs then applied an illustrativea reference range of NTM transaction revenue multiplesillustrative premia of 7.0x19% to 10.0x62% to the next twelve months revenueunaffected closing price of Tableau reflected in the Forecasts,$29.58, and calculated a range of implied equity values per share of TableauSlack common stock, of $121 to $167, as rounded to the nearest dollar, which implied an illustrative range$1.00, of exchange ratios of 0.748x$35 to 1.038x per share of Tableau common stock based on the closing price per share of $161.27 of Salesforce common stock as of June 7, 2019. The illustrative range was selected by Goldman Sachs based on its professional judgment and experience, taking into consideration, among other things, the observed multiples for the selected transactions.$48. -82-
Goldman Sachs also calculated and compared the estimated transaction enterprise value for each of the selected transactions, as a multiple of the target’s estimated growth-adjusted next twelve months revenue from the announcement date of the transaction based on IBES consensus estimates and Wall Street Research (which we refer to as the “growth-adjusted NTM transaction revenue multiple”). Goldman Sachs then applied an illustrative range of growth-adjusted NTM transaction revenue multiples of 0.30x to 0.50x to the next twelve months revenue of Tableau reflected in the Forecasts, and calculated a range of implied equity values per share of Tableau common stock of $105 to $167, as rounded to the nearest dollar, which implied an illustrative range of exchange ratios of 0.651x to 1.038x per share of Tableau common stock based on the closing price per share of $161.27 of Salesforce common stock as of June 7, 2019. The illustrative range was selected by Goldman Sachs based on its professional judgment and experience, taking into consideration, among other things, the observed multiples for the selected transactions.Selected Companies Analysis
Public Comparables Analysis. Goldman Sachs reviewed and compared certain financial and stock market information, ratios and public market multiples for TableauSlack to corresponding financial and stock market information, ratios and public market multiples for the following publicly traded corporations in the software industry (collectively referred to as thecompanies (the collaboration peers, high growth software peers, and SaaS application peers, collectively “selected companies”):
Alteryx,Collaboration Peers
Zoom Video Communications, Inc. MongoDB, Inc.High Growth Software Peers
SmartsheetCoupa Software Inc.
Zendesk,Large Cap Software Peers
Autodesk Inc. (“Autodesk”) Although none of the selected companies isor large cap software peers are directly comparable to Tableau,Slack, the companies included were chosen by Goldman Sachs utilizing its professional judgment because they are publicly traded companies with operations results, market sizes and product profiles that for the purposes of analysis may be considered similar to thatcertain operations of Tableau.Slack. Goldman Sachs calculated and compared EV/NTM revenue multiples for Slack, the enterprise value of each selected company as a multiple of its estimated growth-adjusted calendar year 2020 revenue (which we refer to ascollaboration peers, the “growth-adjusted EV / CY20 revenue multiple”)high growth software peers, and the SaaS application peers, based on the Forecasts for Tableaufinancial and trading data as of November 30, 2020, information Goldman Sachs obtained from Bloomberg, publicly available historical data, market data and IBES estimatesestimates. Goldman Sachs calculated average EV/NTM revenue multiples over certain time periods prior to and Bloomberg dataincluding the pre-announcement date, except as otherwise indicated for Tableau, SalesforceSlack and the selected companies. The resultsSalesforce. -83-
Selected Companies AVERAGE of this analysis are as follows: EV/NTM REVENUE MULTIPLES1 | | | | | | | | | | | | | | | | | | | | | Period ending on
pre-announcement date | | Slack
(unaffected)2 | | | Salesforce
(unaffected)2 | | | Collaboration
Peers | | | High Growth
Software Peers | | | SaaS
Application
Peers | | Three months | | | 16.7x | | | | Growth-adjusted EV / CY20
Rev. Multiple 10.1x | | | | 24.0x | | | | 27.5x | | | | 11.4x | | TableauSix months
| | Forecasts | 18.5x | | 0.31x | | | IBES Estimates9.0x | | 0.33x | | 23.2x | | | | 26.8x | | | | 10.7x | | Median of Selected CompaniesPost-COVID-193
| | IBES Estimates | 18.5x | | 0.25x | | 8.2x | | | | 20.2x | | | | 22.6x | | | | 9.8x | | One year | | | 18.1x | | | | 8.0x | | | | 18.6x | | | | 21.3x | | | | 9.8x | | Direct Listing4 | | | 19.4x | | | | 7.7x | | | | 16.0x | | | | 20.2x | | | | 10.1x | | Three years | | | N/A | | | | 7.5x | | | | 12.2x | | | | 16.6x | | | | 10.1x | | 10 years | | | N/A | | | | 6.9x | | | | 9.5x | | | | 12.0x | | | | 9.4x | |
| 1 | Multiples presented represent the average of the EV/NTM revenue for the subset of selected companies. |
| 2 | Multiples are calculated for the specified periods prior to and including the unaffected date of November 24, 2020. |
| 3 | “Post COVID-19” is considered to be the period starting from February 18, 2020. |
| 4 | “Direct Listing” refers to the period starting from June 20, 2019, the date on which Slack’s Class A common stock began trading on the NYSE. |
Present Value of Future Share Price Analysis—Tableau Standalone.Goldman Sachs performed an illustrative analysisalso calculated and compared EV as of the implied present value of an illustrative future value per share of Tableau common stock, which is designed to provide an indication of the present value of a theoretical future value of Tableau’s equityNovember 30, 2020 as a functionmultiple of Tableau’sNTM unlevered free cash flow for the large cap software peers referred to above for calendar year 2021 based on financial multiples. For this analysis, Goldman Sachs used the Forecasts for each of the calendar years 2019 to 2021. Goldman Sachs first calculated the implied future enterprise value of Tableauand trading data as of March 31, 2019November 30, 2020 and asIBES estimates.
The following table presents the results of December 31, 2019 and 2020, by applying a range of enterprise valuethis analysis: Large Cap Software Peers EV to forward revenue multiples of 7.5x to 8.5x to the revenue estimates for Tableau contained in the Forecasts for each of the calendar years 2019 through 2021. These illustrative multiples were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account historical average enterprise value to revenue multiples for Tableau and the forward enterprise to revenue multiples for the selected companies. Goldman Sachs then added estimated net cash as of the relevant year end per the Forecasts to such future enterprise values in order to calculate the implied future equity values. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Tableau, as provided by the management of Tableau. Goldman Sachs then discounted implied December 31, 2019 and 2020 per share equity values back to March 31, 2019 using an illustrative discount rate of 8.5%, reflecting an estimate of Tableau’s cost of equity. Goldman Sachs derived such illustrative discount rate by application of the CAPM, which requires certain company-specific inputs, including a beta for Tableau, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in an illustrative range of implied present values of $121 to $176 per share of Tableau common stock, as rounded to the nearest dollar.NTM Unlevered Free Cash Flow Multiple Calendar Year 2021 | | | | | | | | Microsoft | | Intuit | | SAP | | Autodesk | | 28.1x | | 32.1x | | 24.6x | | 38.1x |
General The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Tableau,Slack or Salesforce or the contemplated transactions.transaction. Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the TableauSlack board of directors as to the fairness from a financial point of view of the transactionmerger consideration to be paid to the holders of Tableau common stock (other than Salesforce and its affiliates) of shares of Slack common stock, taken in the aggregate, pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily -84-
indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Tableau,Slack, Salesforce, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast. The transactionmerger consideration was determined through arm’s-length negotiations between TableauSlack and Salesforce and was approved by the Tableau board of directors.Slack board. Goldman Sachs provided advice to TableauSlack during these negotiations. Goldman Sachs did not, however, recommend any specific amount of transactionmerger consideration to TableauSlack or the TableauSlack board of directors or that any specific amount of transactionmerger consideration constituted the only appropriate transaction consideration for the contemplated transactions.transaction. As described above, Goldman Sachs’ opinion to the TableauSlack board of directors was one of many factors taken into consideration by the TableauSlack board of directors in making its determination to approve the merger agreement.transaction. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.C. Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or with which they co-invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of Tableau,Slack, Salesforce, orand any of their respective affiliates and third parties, or any currency or commodity that may be involved in the transactions contemplated by the merger agreement for the accounts of Goldman Sachs and its affiliates and employees and their customers.transaction. Goldman Sachs acted as financial advisor to TableauSlack in connection with, and participated in certain of the negotiations leading to, the transactions contemplated by the merger agreement. During the two year period ended June 9, 2019,transaction. Goldman Sachs has provided certain financial advisory and/or underwriting services to Slack and/or its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has not been engaged by Tableau or its affiliatesreceived, and may receive, compensation, including having acted as a financial advisor with respect to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation.the direct listing of 118,429,640 shares of Slack Class A common stock in June 2019 and as bookrunner with respect to the public offering of the convertible notes (aggregate principal amount of $862,500,000) in April 2020. During the two year period ended June 9, 2019,December 1, 2020, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to Slack and/or its affiliates of approximately $16.5 million. During the two year period ended December 1, 2020, the Investment Banking Division of Goldman Sachs has not been engaged by Salesforce or its affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to Tableau,Slack, Salesforce and their respective affiliates for which the Investment Banking Division of Goldman Sachs may receive compensation. In addition, a Director on the Slack board is currently affiliated with Goldman Sachs as a Senior Director. In addition, concurrent with the issuance of the convertible notes in April 2020, Slack entered into the capped call transactions with Goldman Sachs (with respect to 25%) and other counterparties (which we refer to, collectively, as the “capped call counterparties”), each acting as principal for its own account. The capped call transactions consisted of the purchase by Slack of capped call options with respect to collectively approximately 27,826,837 shares of Slack Class A common stock, the aggregate number of shares of Slack Class A common stock into which the $862,500,000 aggregate principal amount of the convertible notes are convertible (at the initial conversion rate of 32.2630 shares of Slack Class A common stock per $1,000 in principal amount of convertible notes) and with an initial strike price equal to the conversion price of the convertible notes of approximately $31.00 per share of Slack Class A common stock, subject to an initial cap price of $48.62 per share of Slack Class A common stock. As of December 17, 2020, all of the capped call transactions remain outstanding, with a strike price of approximately $31.00 and a cap price of $48.62. The capped call transactions were intended to offset a portion of the potential dilutive effect on stockholders of Slack of the conversion of the convertible notes and/or any potential cash payment in excess of the principal amount of the convertible notes that Slack may make in connection with a cash settlement of the convertible notes, up to the cap price. The -85-
capped call transactions generally require the capped call counterparties to deliver to Slack in respect of each Convertible Note that is surrendered for conversion, a number of shares of Slack Class A common stock (and/or in certain circumstances, at Slack’s election, cash) determined based on the excess, if any, of the lower of the cap price and the price of the shares of Slack Class A common stock at that time (determined over a period specified in the capped call transactions) over the strike price per share of Slack Class A common stock. The Tableaucapped call transactions may be adjusted, exercised, cancelled and/or terminated in accordance with their terms in connection with certain events, including the announcement or consummation of the transaction. In particular, under the terms of the capped call transactions, each of Goldman Sachs and the other counterparties, each acting separately as calculation agent under the capped call transactions to which it is a party, is entitled in certain circumstances to make adjustments to the exercise price of the embedded call options sold by Slack to Goldman Sachs and the other counterparties to reflect the economic effect of the announcement of the transaction on the capped call transactions. In addition, each of Goldman Sachs and the other counterparties may, each acting separately as the calculation agent, determining party or otherwise as principal under the capped call transactions to which it is a party, determine such additional adjustments and/or value owed upon termination or cancellation in respect of such capped call transactions in accordance with their terms and pay any amounts due to Slack under various circumstances, including on or following consummation or abandonment of the transaction. All actions or exercises of judgment by Goldman Sachs, in its capacity as calculation agent, pursuant to the terms of the capped call transactions to which it is a party must be performed in good faith and a commercially reasonable manner. As a result of the capped call transactions, the capped call counterparties are expected to have market exposure to the price of the shares of Slack Class A common stock. It is the ordinary practice of the capped call counterparties to engage in hedging activities to limit their respective market exposure to the price of the stock underlying privately negotiated equity derivative transactions with issuers of such stock, such as the capped call transactions. In connection with the capped call transactions to which it is a party, Goldman Sachs (and its affiliates) have engaged, and will continue to engage, in accordance with applicable law in hedging and other market transactions (which may include the entering into or unwinding of various derivative transactions with respect to Slack Class A common stock) that are generally intended to substantially neutralize Goldman Sachs’ exposure as a result of the capped call transactions to which it is a party to changes in the price of Slack Class A common stock. Such hedging activity is at Goldman Sachs’ own risk and may result in a gain or loss to Goldman Sachs that may be greater than or less than the initial expected contractual benefit to Goldman Sachs under the capped call transactions to which it is a party. The amount of any such gain or loss will not be known until the applicable capped call transactions have been exercised, expired or terminated in accordance with their terms and Goldman Sachs shall have completed all of its hedge unwind activities. In connection with the preparation of presentations to the senior management of Slack and the Slack board, personnel in Goldman Sachs’ Investment Banking Division, including the representatives of directorsGoldman Sachs who have advised Slack in connection with the transaction, from time to time, have received or may receive input from personnel in Goldman Sachs’ Securities Division into how to model, or reports of historical measures or estimates of, Goldman Sachs’ and/or Goldman Sachs’ Investment Banking Division’s profit and/or loss over certain measurement periods related to the capped call transactions. To mitigate the exposure from the capped call transactions, as of December 17, 2020, Goldman Sachs held a net long economic position of approximately one million shares of Slack Class A common stock and was long and short a small number of various other options on Slack Class A common stock. Under the terms of the convertible notes, upon the consummation of a merger, tender offer or certain other events involving Slack (including the transaction), holders of the convertible notes may elect to convert their notes or put their notes to Slack at par. If holders of the convertible notes elect to convert or put their notes in these circumstances or otherwise under the terms of the convertible notes, a portion of the capped call transactions corresponding to the portion of the convertible notes that are converted or put may terminate. In the event of such termination, each capped call counterparty will determine the amount of any termination payment -86-
owed to Slack under its capped call transactions in accordance with the termination provisions of its capped call transactions, unless otherwise agreed by the parties. If any convertible notes are not converted or put in connection with a merger, tender offer or other event involving Slack (including the transaction) and remain outstanding following the consummation of such an event, a corresponding portion of the capped call transactions will remain outstanding, subject to any adjustments made to the terms of the capped call transactions as a result of the announcement and the consummation of a merger, tender offer or other event involving Slack (including the transaction), as described above. On November 3, 2020, Goldman Sachs provided the Slack board with materials that summarized, based on theoretical models, the potential effects of the announcement and of the consummation of an acquisition of Slack on the capped call transactions to which Goldman Sachs is a counterparty. The materials included preliminary illustrative analyses by Goldman Sachs’ Investment Banking Division for a range of stated assumptions regarding takeout prices for shares of Slack Class A common stock and volatilities, as well as based on other reasonable assumptions, in the event of an acquisition of Slack for greater than 10% cash consideration. The materials calculated over a range of potential takeout prices for the shares of Slack common stock ranging from $35.00 per share to $55.00 per share) and volatilities (55%, 60%, 65% and 70%) and for an announcement date of December 1, 2020, and other stated assumptions that upon the full unwind of Goldman Sachs’ capped call transactions, Goldman Sachs might owe Slack a termination payment ranging from approximately $26.2 million to approximately $48.5 million and might realize a net gain (after taking into account any estimated hedging gains or losses) ranging from a net gain of approximately $2.5 million to a net gain of approximately $17.8 million. The materials also calculated under the stated assumptions that as the takeout price for shares of Slack Class A common stock increased from $35 per share to $55 per share, Goldman Sachs’ net gain under the capped call transactions (after taking into account any estimated hedging gains or losses) would increase under each assumed volatility scenario. In accordance with industry practice, Goldman Sachs maintains customary institutional information barriers reasonably designed to prevent the unauthorized disclosure of confidential information by personnel in its Investment Banking Division to the personnel in its Securities Division who are undertaking hedging and other market transactions with respect to Goldman Sachs’ capped call transactions. In connection with the preparation of presentations to Slack senior management and the Slack board, personnel in Goldman Sachs’ Investment Banking Division, including the representatives of Goldman Sachs who have advised Slack in connection with the transaction, from time to time, have received or may receive input from personnel in Goldman Sachs’ Securities Division into how to model, or reports of historical measures or estimates of, Goldman Sachs’ and/or Goldman Sachs’ Investment Banking Division’s profit and/or loss over certain measurement periods related to the capped call transactions. The amount of any termination payment owed by a capped call counterparty to Slack as a result of the termination of its capped call transactions will vary depending on the number of convertible notes converted by note-holders, the actual conversion date(s) of the convertible notes, and market conditions (including, for example, interest rates and volatility and price of Slack common stock) and the valuation model used to determine such amount and, accordingly, the amount of any termination payment owed by a capped call counterparty to Slack may be significantly different from the illustrative amounts described above. The consummation of the transaction could result in a capped call counterparty paying Slack an amount that is greater than, equal to, or less than the amount such capped call counterparty would have paid or delivered to Slack upon exercise, expiration or termination of its capped call transactions in the absence of the transaction. The indenture governing the convertible notes and the confirmations containing the terms of the capped call transactions were included as exhibits to Slack’s Current Report on Form 8-K filed with the SEC on April 9, 2020, which contains additional disclosure regarding the convertible notes and a description of the capped call transactions. All references in this section to share counts, conversion prices, cap prices and strike prices are subject to adjustment from time to time in accordance with the terms of the confirmations relating to the capped call transactions. -87-
The Slack board selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transactions contemplated by the merger agreement.transaction. Pursuant to a letter agreement dated February 25, 2019, TableauOctober 2, 2020 Slack engaged Goldman Sachs to act as its financial advisor in connection with the transactions contemplated by the merger agreement.transaction. The engagement letter between TableauSlack and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of the announcement of the transaction, at approximately $82$38.9 million, all of which is contingent upon consummation of the transactions.transaction. In addition, TableauSlack has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws. Distribution of Offering MaterialsSalesforce’s Reasons for the Mergers
This document, the related letter of transmittal and other relevant materials will be deliveredIn reaching its decision to record holders of Tableau shares and to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on Tableau’s stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing, so that they can in turn send these materials to beneficial owners of Tableau shares.
Expiration of the Offer
The offer is scheduled to expire at midnight, Eastern Time, at the end of July 31, 2019, unless extended or terminated in accordance with the merger agreement. “Expiration date” means midnight, Eastern Time, at the end of July 31, 2019, unless and until the Offeror has extended the period during which the offer is open, subject to the terms and conditions of the merger agreement, in which event the term “expiration date” means the latest time and date at which the offer, as so extended by the Offeror, will expire.
Extension, Termination and Amendment of the Offer
Subject to the provisions ofapprove the merger agreement and the applicable rules and regulations of the SEC, and unless Tableau consents otherwise (which may be granted or withheld in its sole discretion) or the merger agreement is otherwise terminated:
the Offeror must extend the offer for any period requiredtransactions contemplated by any law, or any rule, regulation, interpretation or position of the SEC or its staff or the NYSE applicable to the offer, or to the extent
| necessary to resolve any comments of the SEC or its staff applicable to the offer or the offer documents or the registration statement on Form S-4, of which this document is a part;
|
in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived in accordance with the merger agreement as of any then-scheduled expiration of the offer, the Offeror must extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and
if, as of any then-scheduled expiration of the offer, each condition to the offer (other than the minimum tender condition, and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived in accordance with the merger agreement and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau must, extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or that have been tendered but validly withdrawn, in the offer as of such time, and (y) as of such time the founders whose untendered shares are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares into the offer; or (ii) for more than 20 business days in the aggregate.
The Offeror may not terminate or withdraw the offer prior to the then-scheduled expiration of the offer unless the merger agreement is validly terminated in accordance with its terms, in which case the Offeror will terminate the offer promptly (but in no event more than one business day) after such termination. Among other circumstances, the merger agreement may be terminated by either Salesforce or Tableau if the offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Salesforce or the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer, or if the acceptance for exchange of Tableau shares tendered in the offer has not occurred on or before October 9, 2019 (subject to the two-month extension in certain circumstances described under “Merger Agreement—Termination of the Merger Agreement”), which we refer to as the “outside date.” See “Merger Agreement—Termination of the Merger Agreement.”
The Offeror expressly reserves the right to waive any offer condition or modify the terms of the offer, except that the Offeror may not make certain changes to the offer or waive certain conditions to the offer without the priorwritten consent of Tableau (which may be granted or withheld in its sole discretion). Changes to the offer that require the prior written consent of Tableau include changes (i) that change the form of consideration to be paid in the offer, (ii) that reduce the transaction consideration per Tableau share or decrease the consideration in the offer or the number of Tableau shares sought in the offer, (iii) that extend the offer (other than in a manner required or permitted by the merger agreement), (iv) that impose conditions to the offer not included in the merger agreement or (v) that amend or modify any term of or condition to the offer in any manner that has an adverse effect, or would be reasonably likely to have an adverse effect, on the holders of Tableau shares, that is notde minimis.
Conditions to the offer that the Offeror and Salesforce may not amend, modify or waive without the prior written consent of Tableau (which may be granted or withheld in its sole discretion) include (i) the minimum tender
condition, (ii) the receipt of required regulatory approvals, (iii) lack of legal prohibitions, (iv) the effectiveness of the registration statement on Form S-4, of which this document is a part, (v) the approval for listing on the NYSE of the Salesforce shares to be issued in the offer and the merger and (vi) that the merger agreement shall not have been validly terminated in accordance with its terms.
The Offeror will effect any extension, termination, amendment or delay of the offer by giving oral or written notice to the exchange agent and by making a public announcement as promptly as practicable thereafter. In the case of an extension, any such announcement will be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material change in the information published, sent or given to stockholders in connection with the offer be promptly disseminated to stockholders in a manner reasonably designed to inform them of such change) and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror assumes no obligation to publish, advertise or otherwise communicate any such public announcement of this type other than by issuing a press release.
If the Offeror materially changes the terms of the offer or the information concerning the offer, or if the Offeror waives a material condition of the offer, in each case, subject to the terms and conditions of the merger agreement, the Offeror will extend the offer to the extent legally required under the Exchange Act.
For purposes of the offer, a “business day” means any day other than a Saturday, SundaySalesforce board consulted with Salesforce’s management, as well as Salesforce’s legal and any day which is a legal holiday under the laws of California or New York, or is a day on which banking institutions located in such states are authorized or required by applicable law or other governmental action to close.
No subsequent offering period will be available following the expiration of the offer without the prior written consent of Tableau, other than in accordance with the extension provisions set forth in the merger agreement.
Exchange of Shares; Delivery of Salesforce Shares
Salesforce has retained American Stock Transferfinancial advisors, and Trust Company, LLC as the depositary and exchange agent for the offer and the merger (which we refer to as the “exchange agent”) to handle the exchange of Tableau shares for the transaction consideration in the offer and the merger.
Upon the terms and subject to the satisfaction or waiver of the conditions of the offer (including, if the offer is extended or amended in accordance with the merger agreement, the terms and conditions of any such extension or amendment), the Offeror will accept for exchange, and will exchange, Tableau shares validly tendered and not validly withdrawn in the offer, promptly after the expiration of the offer. In all cases, a Tableau stockholder will receive consideration for Tableau shares tendered in the offer only after timely receipt by the exchange agent of either a confirmation of a book-entry transfer of such shares (as described in “—Procedure for Tendering”) or a properly completed and duly executed letter of transmittal, in each case, together with any other required documents.
For purposes of the offer, the Offeror will be deemed to have accepted for exchange Tableau shares validly tendered and not validly withdrawn if and when it notifies the exchange agent of its acceptance of those Tableau shares pursuant to the offer. The exchange agent will deliver to the applicable Tableau stockholders any Salesforce shares and cash in lieu of fractional shares issuable in exchange for Tableau shares validly tendered and accepted pursuant to the offer promptly after receipt of such notice. The exchange agent will act as the agent for tendering Tableau stockholders for the purpose of receiving Salesforce shares from the Offeror and transmitting such Salesforce shares and cash in lieu of fractional shares to the tendering Tableau stockholders. Tableau stockholders will not receive any interest on any cash that the Offeror pays in the offer in lieu of fractional shares, even if there is a delay in making the exchange.
If the Offeror does not accept any tendered Tableau shares for exchange pursuant to the terms and conditions of the offer for any reason, the Tableau shares to be returned will be credited to an account maintained with DTC or otherwise credited to the tendering stockholder as soon as practicable following expiration or termination of the offer.
Withdrawal Rights
Tableau stockholders can withdraw tendered Tableau shares at any time until the expiration of the offer and, if the Offeror has not agreed to accept the shares for exchange on or prior to September 1, 2019, Tableau stockholders can thereafter withdraw their shares from tender at any time after such date until the Offeror accepts shares for exchange. Any Tableau stockholder that validly withdraws previously validly tendered Tableau shares will receive shares of the same class of Tableau common stock that were tendered.
For the withdrawal of Tableau shares to be effective, the exchange agent must receive a written notice of withdrawal from the Tableau stockholder at one of the addresses set forth elsewhere in this document prior to the expiration of the offer. The notice must include the Tableau stockholder’s name, address, social security number (or tax identification number in the case of entities), the number of shares to be withdrawn and the name of the registered holder, if it is different from that of the person who tendered those shares, and any other information required pursuant to the offer or the procedures of DTC, if applicable.
A financial institution must guarantee all signatures on the notice of withdrawal, unless the shares to be withdrawn were tendered for the account of an eligible institution. Most banks, savings and loan associations and brokerage houses are able to provide signature guarantees. An “eligible institution” is a financial institution that is a participant in the Securities Transfer Agents Medallion Program.
If shares have been tendered pursuant to the procedures for book-entry transfer discussed under the section entitled “The Offer—Procedure for Tendering,” any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn shares and must otherwise comply with DTC’s procedures.
The Offeror will decide all questions as to the form and validity (including time of receipt) of any notice of withdrawal in its sole discretion, and its decision will be final and binding. None of the Offeror, Salesforce, Tableau, the exchange agent, the information agent or any other person is under any duty to give notification of any defects or irregularities in any tender or notice of withdrawal or will incur any liability for failure to give any such notification. Any shares validly withdrawn will be deemed not to have been validly tendered for purposes of the offer. However, a Tableau stockholder may re-tender withdrawn shares by following the applicable procedures discussed under the section “The Offer—Procedure for Tendering” at any time prior to the expiration of the offer.
Procedure for Tendering
All Tableau shares are held in electronic book entry form.
To validly tender Tableau shares held of record, Tableau stockholders must deliver a properly completed and duly executed letter of transmittal, along with any required signature guarantees and any other required documents for tendered Tableau shares to the exchange agent for the offer, at its address set forth elsewhere in this document, all of which must be received by the exchange agent prior to the expiration of the offer.
If Tableau shares of Class A common stock are held in “street name” (i.e., through a broker, dealer, commercial bank, trust company or other nominee), those shares of Class A common stock may be tendered by the nominee holding such shares by book-entry transfer through DTC. To validly tender such shares held in street name, Tableau stockholders should instruct such nominee to do so prior to the expiration of the offer. No shares of Tableau Class B common stock are held in “street name.”
The exchange agent has established an account with respect to the Tableau shares at DTC in connection with the offer, and any financial institution that is a participant in DTC may make book-entry delivery of Tableau shares by causing DTC to transfer such shares prior to the expiration date into the exchange agent’s account in accordance with DTC’s procedure for such transfer. However, although delivery of Tableau shares may be effected through book-entry transfer at DTC, the letter of transmittal with any required signature guarantees, or an agent’s message, along with any other required documents, must, in any case, be received by the exchange agent at its address set forth elsewhere in this document prior to the expiration date. The term “agent’s message” means a message transmitted by DTC to, and received by, the exchange agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the DTC participant tendering the shares that are the subject of such book-entry confirmation, that such participant has received and agrees to be bound by the terms of the letter of transmittal and that the Offeror may enforce that agreement against such participant.
The Offeror is not providing for guaranteed delivery procedures and therefore Tableau stockholders who hold their shares through a DTC participant must allow sufficient time for the necessary tender procedures to be completed during normal business hours of DTC prior to the expiration date. Tenders received by the exchange agent after the expiration date will be disregarded and of no effect.
Signatures on all letters of transmittal must be guaranteed by an eligible institution, except in cases in which shares are tendered either by a registered holder of Tableau shares who has not completed the box entitled “Special Issuance Instructions” or the box entitled “Special Delivery Instructions” on the letter of transmittal or for the account of an eligible institution.
If the Tableau shares are registered in the name of a person other than the person who signs the letter of transmittal, or if payment is to be made or delivered to a person other than the registered holder(s), the tendering stockholder must provide appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the applicable book entry position, with the signature or signatures on the stock powers guaranteed by an eligible institution.
The method of delivery of all required documents, including delivery through DTC, is at the option and risk of the tendering Tableau stockholder, and delivery will be deemed made only when actually received by the exchange agent. If delivery is by mail, the Offeror recommends registered mail with return receipt requested and properly insured. In all cases, Tableau stockholders should allow sufficient time to ensure timely delivery.
To prevent U.S. federal backup withholding, each Tableau stockholder that is a U.S. person (as defined in the Code), other than a stockholder exempt from backup withholding as described elsewhere in this document, must provide the exchange agent with its correct taxpayer identification number and certify that it is not subject to U.S. federal backup withholding by timely completing the IRS Form W-9 included in the letter of transmittal. Certain stockholders (including, among others, certain foreign persons) are not subject to these backup withholding requirements. In order for a Tableau stockholder that is a foreign person to qualify as an exempt recipient for purposes of U.S. federal backup withholding, the stockholder must timely submit an applicable IRS Form W-8, signed under penalty of perjury, attesting to such person’s exempt status.
The acceptance for payment by the Offeror of Tableau shares pursuant to any of the procedures described above will constitute a binding agreement between the Offeror and the tendering Tableau stockholder upon the terms and subject to the conditions of the offer (including, if the offer is extended or amended in accordance with the merger agreement, the terms and conditions of any such extension or amendment).
No Guaranteed Delivery
The Offeror is not providing for guaranteed delivery procedures, and therefore Tableau stockholders must allow sufficient time for the necessary tender procedures to be completed prior to the expiration date. If
Tableau stockholders hold shares through a DTC participant, such stockholders must allow sufficient time for the necessary tender procedures to be completed during normal business hours of DTC prior to the expiration date. Tableau stockholders must tender their Tableau shares in accordance with the procedures set forth in this document. In all cases, the Offeror will exchange Tableau shares tendered and accepted for exchange pursuant to the offer only after either a confirmation of a book-entry transfer of such shares (as described in “The Offer—Procedure for Tendering”) or a properly completed and duly executed letter of transmittal, in each case, together with any other required documents.
Grant of Proxy
By executing a letter of transmittal, subject to and effective upon acceptance for exchange of Tableau shares tendered thereby, a Tableau stockholder will irrevocably appoint the Offeror’s designees as such Tableau stockholder’s attorneys-in-fact and proxies, each with full power of substitution, to exercise to the full extent such stockholder’s rights with respect to its Tableau shares tendered and accepted for exchange by the Offeror and with respect to any and all other shares and other securities issued or issuable in respect of those Tableau shares.That appointment is effective, and voting rights will be effected, when and only to the extent that the Offeror accepts tendered Tableau shares for exchange pursuant to the offer and deposits with the exchange agent the transaction consideration for such Tableau shares. Furthermore, the letter of transmittal will not constitute a binding agreement between the signatory thereto and the Offeror until the Offeror accepts tendered Tableau shares for exchange pursuant to the offer and deposits with the exchange agent the transaction consideration for such Tableau shares.
All such proxies, when effective, will be considered coupled with an interest in the tendered Tableau shares and therefore will not be revocable. Upon the effectiveness of such appointment, all prior powers of attorney and proxies that the Tableau stockholder has given will be revoked, and such stockholder may not give any subsequent powers of attorney or proxies (and, if given, they will not be deemed effective). The Offeror’s designees will, with respect to the Tableau shares for which the appointment is effective, be empowered, among other things, to exercise all of such stockholder’s voting and other rights as they, in their sole discretion, deem proper at any annual, special or adjourned meeting of Tableau’s stockholders or otherwise.
The Offeror reserves the right to require that, in order for Tableau shares to be deemed validly tendered, immediately upon the Offeror’s acceptance of such shares for exchange, the Offeror must be able to exercise full voting rights with respect to such shares.However, prior to acceptance for exchange by the Offeror in accordance with terms of the offer, the appointment will not be effective, and the Offeror will have no voting rights as a result of the tender of Tableau shares.
Tableau Class A Common Stock and Tableau Class B Common Stock
Under Tableau’s amended and restated certificate of incorporation (which we refer to as the “Tableau charter”), each share of Tableau Class A common stock entitles the holder to one vote while each share of Tableau Class Bcommon stock generally entitles the holder to 10 votes. Each share of Tableau Class B common stock is convertible at any time at the option of the holder into one share of Tableau Class A common stock. In addition, each share of Tableau Class B common stock will convert automatically into one share of Tableau Class A common stock upon any transfer, whether or not for value, subject to certain exceptions set forth in the Tableau charter (none of such exceptions being applicable to the consummation of the offer). Accordingly, shares of Tableau Class B common stock that are validly tendered (and not validly withdrawn) in the offer will automatically convert, on a one-to-one basis, into Tableau Class A common stock upon the consummation of the offer
If the offer is successfully completed, holders of shares of Tableau Class A common stock and Tableau Class B common stock that validly tender (and do not validly withdraw) their shares into the offer will both receive the same transaction consideration. In the merger, each outstanding share of Tableau Class A common stock and
Tableau Class B common stock (other than certain converted or cancelled shares, as described elsewhere in this document) that were not acquired by the Offeror in the offer will be converted into the right to receive the same transaction consideration.
Fees and Commissions
Tendering registered Tableau stockholders who tender Tableau shares directly to the exchange agent will not be obligated to pay any charges or expenses of the exchange agent or any brokerage commissions. Tendering Tableau stockholders who hold Tableau shares through a broker, dealer, commercial bank, trust company or other nominee should consult that institution as to whether or not such institution will charge the Tableau stockholder any service fees in connection with tendering Tableau shares pursuant to the offer.
Matters Concerning Validity and Eligibility
The Offeror will determine questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of Tableau shares, in its sole discretion, and its determination will be final and binding to the fullest extent permitted by law. The Offeror reserves the absolute right to reject any and all tenders of Tableau shares that it determines are not in the proper form or the acceptance of or exchange for which may be unlawful. The Offeror also reserves the absolute right to waive any defect or irregularity in the tender of any Tableau shares. No tender of Tableau shares will be deemed to have been validly made until all defects and irregularities in tenders of such shares have been cured or waived. None of the Offeror, Salesforce, Tableau or any of their affiliates or assigns, the exchange agent, the information agent or any other person will be under any duty to give notification of any defects or irregularities in the tender of any Tableau shares or will incur any liability for failure to give any such notification. The Offeror’s interpretation of the terms and conditions of the offer (including the letter of transmittal and instructions thereto) will be final and binding to the fullest extent permitted by law.
Tableau stockholders who have any questions about the procedure for tendering Tableau shares in the offer should contact the information agent at the address and telephone number set forth elsewhere in this document.
Announcement of Results of the Offer
Salesforce will announce the final results of the offer, including whether all of the conditions to the offer have been satisfied or waived and whether the Offeror will accept the tendered Tableau shares for exchange, as promptly as practicable following the expiration date. The announcement will be made by a press release in accordance with applicable securities laws and stock exchange requirements.
Purpose of the Offer and the Merger
The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer, as the first step in the acquisition of Tableau, is intended to facilitate the acquisition of Tableau. Accordingly, if the offer is completed and as a second step in such plan, pursuant to the terms and subject to the conditions of the merger agreement, Salesforce intends to promptly consummate a merger of the Offeror with and into Tableau, with Tableau surviving the merger. The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer. In the merger, each outstanding Tableau share that was not acquired by Salesforce or the Offeror in the offer (other than certain converted and cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. Upon consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former stockholders of Tableau will no longer have any direct ownership interest in the surviving corporation.
No Stockholder Approval
If the offer is consummated, Salesforce is not required to and will not seek the approval of Tableau’s remaining public stockholders before effecting the merger. Section 251(h) of the DGCL provides that following consummation of a successful tender offer for a public corporation, and subject to certain statutory provisions, if the acquiring corporation owns at least the amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger involving the target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender offer, the acquiring corporation can effect a merger without the action of the other stockholders of the target corporation. Accordingly, if the offer is completed, it will mean that the minimum tender condition has been satisfied, and if the minimum tender condition has been satisfied, it will mean that the merger will be subject to Section 251(h) of the DGCL. Accordingly, if the offer is completed, Salesforce intends to effect the closing of the merger without a vote of the Tableau stockholders in accordance with Section 251(h) of the DGCL.
No Appraisal Rights
Section 262 of the DGCL provides that stockholders have the right, in some circumstances, to dissent from certain corporate actions and to instead demand payment of the fair value of their shares. Stockholders do not have appraisal rights with respect to shares of any class or series of stock if such shares of stock, or depositary receipts in respect thereof, are either (a) listed on a national securities exchange or (b) held of record by more than 2,000 holders, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation (or depositary receipts in respect thereof), or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash in lieu of fractional shares or fractional depositary receipts described above or any combination of the foregoing.
Therefore, because shares of Tableau common stock are listed on NYSE, and the transaction consideration consists of only shares of Salesforce common stock, which are listed on NYSE, and cash in lieu of fractional shares, holders of Tableau common stock are not entitled to appraisal rights in the offer or the merger with respect to their shares of Tableau common stock. In addition, because the merger is of Tableau with and into a subsidiary of Salesforce and holders of Salesforce common stock will continue to hold their shares following completion of the merger, holders of Salesforce common stock are not entitled to appraisal rights in connection with the offer or the merger with respect to their shares of Salesforce common stock.
Non-Applicability of Rules Regarding “Going Private” Transactions
The SEC has adopted Rule 13e-3 under the Exchange Act, which is applicable to certain “going private” transactions, and which may under certain circumstances be applicable to the merger or another business combination following the acceptance of shares pursuant to the offer in which the Offeror seeks to acquire the remaining shares not held by it. The Offeror believes that Rule 13e-3 will not be applicable to the merger because it is anticipated that the merger will be effected within one year following the consummation of the offer and, in the merger, stockholders will receive the same consideration as that paid in the offer.
Plans for Tableau
In connection with the offer, Salesforce has reviewed and will continue to review various possible business strategies that it might consider in the event that the Offeror acquires control of Tableau, whether pursuant to the offer, the merger or otherwise. Following a review of additional information regarding Tableau, these changes could include, among other things, changes in Tableau’s business, operations, personnel, employee benefit plans, corporate structure, capitalization and management. See also “The Offer—Salesforce’s Reasons for the Offer and the Merger.”
Delisting and Termination of Registration
Following consummation of the transactions, shares of Tableau Class A common stock will no longer be eligible for inclusion on the NYSE and will be withdrawn from listing. Assuming that Tableau qualifies for termination of registration under Exchange Act after the transactions are consummated, Salesforce also intends to seek to terminate the registration of shares of Tableau Class A common stock under the Exchange Act. See “The Offer—Effect of the Offer on the Market for Tableau Shares; NYSE Listing; Registration Under the Exchange Act; Margin Regulations.”
Board of Directors and Management; Organizational Documents
Upon consummation of the merger, the directors of the Offeror immediately prior to the consummation of the merger will be the directors of the surviving corporation in the merger, and the officers of the Offeror immediately prior to the consummation of the merger will be the officers of the surviving corporation in the merger. Upon consummation of the merger, the certificate of incorporation and bylaws of the Offeror as in effect immediately prior to the effective time of the merger will be the certificate of incorporation and bylaws of the surviving corporation in the merger, provided that the name of the surviving corporation will be Tableau Software, Inc. After Salesforce’s review of Tableau and its corporate structure, management and personnel, Salesforce will determine what changes, if any, are desirable.
Ownership of Salesforce Shares after the Offer and the Merger
Salesforce estimates that former Tableau stockholders would own, in the aggregate, approximately 11.0% of the outstanding Salesforce shares immediately following consummation of the offer and the merger, assuming that:
Salesforce acquires through the offer and the merger 100% of the outstanding Tableau shares;
in the offer and the merger, Salesforce issues 96,372,111 Salesforce shares as part of the transaction consideration (disregarding for this purpose stock options, restricted stock units and other rights to acquire shares that may be issued by Salesforce or Tableau pursuant to any employee stock plan); and
immediately following completion of the transactions, there are 875,249,785 Salesforce shares outstanding (calculated by adding 778,877,674, the number of Salesforce shares outstanding as of June 24, 2019 (excluding treasury shares), plus 96,372,111, the number of Salesforce shares estimated to be issued as part of the transaction consideration).
Each Salesforce share has one vote.
Effect of the Offer on the Market for Tableau Shares; NYSE Listing; Registration under the Exchange Act; Margin Regulations
Effect of the Offer on the Market for Tableau Shares
The purchase of shares of Tableau Class A common stock by the Offeror pursuant to the offer will reduce the number of holders of shares of Tableau Class A common stock and the number of shares of Tableau Class A common stock that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining shares of Tableau Class A common stock held by the public. The extent of the public market for shares of Tableau Class A common stock after consummation of the offer and the availability of quotations for such shares will depend upon a number of factors, including the number of stockholders holding shares of Tableau Class A common stock, the aggregate market value of the shares of Tableau Class A common stock held by the public at such time, the interest of maintaining a market in the shares of Tableau Class A common stock, analyst coverage of Tableau on the part of any securities firms and other factors. However, underfollowing factors which it viewed as supporting its decision to approve the merger agreement and the closingtransactions contemplated by the merger agreement (not in any relative order of importance):
the view that Slack is a premier channels-based messaging platform, which will enable Salesforce to play a greater role in driving digital transformation and create the operating system for a new way to work; the view that Slack’s platform will enhance Salesforce’s value to its customers by seamlessly integrating with applications that customers use to collaborate, communicate and get work done; the view that Slack’s platform, when combined with the Salesforce Customer 360, presents an opportunity to transform how customers communicate, collaborate and take action on their information across Salesforce as well as information from all of their other business applications and systems; the view that Slack addresses a multi-billion dollar market opportunity that is growing at a fast rate, including in light of the merger must occur promptly,shift to a work-from-anywhere environment; Slack’s demonstrated ability to meaningfully scale its business with attractive growth prospects; the expectation that the combined company would create additional growth opportunities by leveraging the respective strengths of each business, which is expected to create long-term stockholder value; the strength of Slack’s management team and in any case no later than the first business day, after the acceptance of tendered Tableau shares in the offerengineering team, and the satisfaction ofcultural synergies between the other condition to thetwo companies; merger, unless the parties agree otherwise in writing (see “Merger Agreement—Conditions to the Merger”). If the merger is completed, shares of Tableau Class A common stock will no longer qualify for inclusion on the NYSE and will be withdrawn from listing.
There is no public trading market for the Tableau Class B common stock.
NYSE Listing
Shares of Tableau Class A common stock are currently listed on the NYSE. However, the rules of the NYSE establish certain criteriaview that if not met, could lead to the discontinuance of listing of shares of Tableau Class A common stock from the NYSE. Among such criteria are the number of stockholders, the number of shares publicly held and the aggregate market value of the shares publicly held. If, as a result of the purchase of shares of Tableau Class A common stock pursuant to the offer or otherwise, shares of Tableau Class A common stock no longer meet the requirements of the NYSE for continued listing and the shares of Tableau Class A common stock are delisted, the market for such shares would be adversely affected.
Following the consummation of the offer, if the merger is for some reason not consummated, it is possible that shares of Tableau Class A common stock could be traded on other securities exchanges (with trades published by such exchanges), the OTC Bulletin Board or in a local or regional over-the-counter market. The extent of the public market for such shares would, however, depend upon the number of Tableau stockholders and the aggregate market value of shares of Tableau Class A common stock remaining at such time, the interest in maintaining a market in such shares on the part of securities firms, the possible termination of registration of shares of Tableau Class A common stock under the Exchange Act and other factors. If the merger is completed, shares of Tableau Class A common stock will no longer qualify for inclusion on the NYSE and will be withdrawn from listing.
Margin Regulations
The shares of Tableau Class A common stock are currently “margin securities” under the Regulations of the Board of Governors of the Federal Reserve System (which we refer to as the “Federal Reserve Board”), which designation has the effect, among other effects, of allowing brokers to extend credit on the collateral of such shares of Tableau Class A common stock. Depending upon factors similar to those described above regarding the market for shares of Tableau Class A common stock and stock quotations, it is possible that, following the offer, shares of Tableau Class A common stock would no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers. If the merger is completed, shares of Tableau Class A common stock will no longer constitute “margin securities.”
Registration under the Exchange Act
Shares of Tableau Class A common stock are currently registered under the Exchange Act. Such registration may be terminated upon application by Tableau to the SEC if shares of Tableau Class A common stock are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of shares of Tableau Class A common stock under the Exchange Act would substantially reduce the information required to be furnished by Tableau to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to Tableau, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with meetings of stockholders and the related requirement of furnishing an annual report to stockholders, and the requirements of Rule 13e-3 under the Exchange Act with respect to “going private” transactions. Furthermore, the ability of “affiliates” of Tableau and persons holding “restricted securities” of Tableau to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act may be impaired. If registration of shares of Tableau Class A common stock under the Exchange Act were
terminated, such shares would no longer be “margin securities” or be eligible for quotation on the NYSE. After consummation of the offer, Salesforce and the Offeror currently intend to cause Tableau to terminate the registration of shares of Tableau Class A common stock under the Exchange Act as soon as the requirements for termination of registration are met.
Conditions of the Offer
Notwithstanding any other provisions of the offer and in addition to Salesforce’s and the Offeror’s rights to extend, amend or terminate the offer in accordance with the terms and conditions of the merger agreement and applicable law,the transactions contemplated therein, including the representations, warranties, covenants, closing conditions and in additiontermination provisions, are comprehensive and favorable to completing the proposed transactions;
the fact that the merger agreement places limitations on Slack’s ability to seek a competing proposal and requires Slack to pay Salesforce a termination fee of $900 million if Salesforce or Slack terminates the merger agreement under certain circumstances, including if Slack consummates or enters into an agreement with respect to a competing acquisition proposal within a certain time period; the expectation that the conditions to the obligationsconsummation of the Offerormergers will be satisfied on a timely basis; the amount and form of consideration to extendbe paid in the offertransaction, including the fact that the exchange ratio is fixed; current financial market conditions and the current and historical market prices and volatility of, and trading information with respect to, shares of Salesforce common stock and Slack Class A common stock; -88-
the Salesforce board’s and the Salesforce management’s familiarity with the business operations, strategy, earnings and prospects of each of Salesforce and Slack and the scope and results of the due diligence investigation of Slack conducted by Salesforce; the entry into the voting and support agreement by Slack’s founders, pursuant to which they agreed, among other things, to vote all of their shares of Slack Class A common stock and Class B common stock in favor of the terms and conditionsadoption of the merger agreement and applicable law, the Offeror and Salesforce are not required to accept for exchange or,approval of the merger proposal, subject to any applicable rulescertain terms and regulationsconditions; and Slack management’s endorsement of the SEC (including Rule 14e-1(c) undermergers and the Exchange Act), exchange the transaction consideration for any Tableau shares validly tenderedSlack board’s unanimous recommendation in the offer and not validly withdrawn prior to the expirationfavor of the offer, if atmergers. The Salesforce board also considered a variety of uncertainties and risks and other potentially negative factors concerning the expirationtransactions, including the following (not in any relative order of importance): the risk that the potential benefits of the offer anyacquisition may not be fully or even partially achieved, or may not be achieved within the expected time frame; costs associated with the transactions; the risk that the transactions may not be consummated despite the parties’ efforts or that the closing of the following conditions have not been satisfied or waived in accordancetransactions may be unduly delayed; the risks associated with the occurrence of events which may materially and adversely affect the operations or financial condition of Slack and its subsidiaries, which may not entitle Salesforce to terminate the merger agreement:agreement; the challenges and difficulties relating to combining the operations of Salesforce and Slack; the risk of diverting Salesforce’s management’s focus and resources from other strategic opportunities and from operational matters while working to implement the acquisition of Slack, and other potential disruptions associated with combining the two companies; the effects of and changes in general competitive, economic, political and market conditions, fluctuations and volatility on Salesforce, Slack or the combined company, including as a result of COVID-19; and | | • | | Minimum Tender Condition—Tableau stockholders having validly tendered and not validly withdrawn in accordancevarious other risks associated with the terms of the offer and prior to the expiration of the offer a number of shares of Tableau common stock that upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together with any shares of Tableau common stock then owned by Salesforceacquisition and the Offeror, would represent at least a majoritybusinesses of Salesforce, Slack and the aggregate voting powercombined company, some of which are described under the Tableau shares outstanding immediately after the consummation of the offer (which we refer to as the “minimum tender condition”);section entitled “Risk Factors.”
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| • | | Regulatory Approvals—Any applicable waiting period under the HSR Act having expired or been terminated, and any required pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany having been obtained;
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| • | | Effectiveness of Form S-4—The registration statement on Form S-4, of which this document is a part, having become effective under the Securities Act, and not being the subject of any stop order or proceeding seeking a stop order;
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| • | | No Legal Prohibition— No governmental entity of competent jurisdiction having (i) enacted, issued or promulgated any law on or after June 9, 2019 (and there not having been any change on or after June 9, 2019 in the manner in which any governmental entity enforces or interprets any law enacted, issued or promulgated prior to June 9, 2019) that is in effect as of immediately prior to the expiration of the offer or (ii) issued or granted any order or injunctions (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the expiration of the offer, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the offer or the merger;
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| • | | Listing of Salesforce Shares—The Salesforce shares to be issued in the offer and the merger having beenThe Salesforce board concluded that the potential negative factors associated with the acquisition were outweighed by the potential benefits of the mergers. Accordingly, the Salesforce board approved for listing on the NYSE, subject to official notice of issuance;
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| • | | No Tableau Material Adverse Effect—There not having occurred any change, effect, development, circumstance, condition, state of facts, event or occurrence since the date of the merger agreement that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations of Tableau and its subsidiaries, taken as a whole (with such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”), and that is continuing as of immediately prior to the expiration of the offer;
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| • | | Accuracy of Tableau’s Representations and Warranties—The representations and warranties of Tableau in the merger agreement (without giving effect to any qualification as to materiality or material adverse effect) being true and correct as of June 9, 2019 and as of the expiration of the offer as though made on and as of the expiration of the offer (except for representations and warranties that by
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| their terms speak specifically as of another date, in which case as of such date), except where the failure of such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or material adverse effect) have not had and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Tableau (with such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”), except that (1) certain of Tableau’s representations and warranties related to its qualification, organization and subsidiaries, its authority to enter into the merger agreement, the opinion of Tableau’s financial advisor, anti-takeover laws and finders and brokers fees must be true and correct in all material respects, if not qualified by materiality or material adverse effect, and in all respects, if qualified by materiality or material adverse effect; (2) certain of Tableau’s representations and warranties related to its capitalization and voting agreements must be true and correct in all respects, except for any de minimis inaccuracies; and (3) Tableau’s representation and warranty that no material adverse effect on Tableau (with such term as defined in the merger agreement and described under “Merger Agreement—Material Adverse Effect”) has occurred from December 31, 2018 through June 9, 2019 (the date of the merger agreement) must be true and correct in all respects;
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| • | | Tableau’s Compliance with Covenants—Tableau having performed or complied in all material respects with the covenants and agreements required to be performed or complied with by it under the merger agreement at or prior to the expiration of the offer;
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| • | | Receipt of Tableau Officer’s Certificate—Salesforce and the Offeror having received from Tableau a certificate, dated the date of the expiration of the offer and signed by its chief executive officer or chief financial officer, certifying to the effect that the conditions set forth in the three bullet points immediately above have been satisfied; or
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| • | | No Termination of the Merger Agreement—The merger agreement not having been validly terminated in accordance with its terms.
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Except as expressly set forth in the merger agreement and the transactions contemplated by the merger agreement.
The foregoing conditionsdiscussion of the information and factors considered by the Salesforce board is not intended to be exhaustive, but includes the material positive and negative factors considered by the Salesforce board. In view of the variety of factors considered in connection with its evaluation of the acquisition, the Salesforce board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the offer are forspecific factors considered in reaching its determination. In addition, individual directors may have given different weights to different factors. The Salesforce board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Salesforce board based its determination on the sole benefit of Salesforce and the Offeror and may be asserted by Salesforce or the Offeror regardlesstotality of the circumstances giving rise to any such conditions, and may be waived by Salesforce or the Offeror in whole or in part at any time and from time to time in their sole and absolute discretion. However, certain specified conditions may only be waived by Salesforce or the Offeror with the prior written consent of Tableau (which may be granted or withheld in its sole discretion). These conditions are the minimum tender condition, the receipt of required regulatory approvals, lack of legal prohibitions, the Salesforce shares to be issued in the offer and the merger having been approved for listing on the NYSE, subject to official notice of issuance, the registration statement on Form S-4, of which this document is a part, having become effective and the merger agreement not having been validly terminated in accordance with its terms. There is no financing condition to the offer.information presented. -89-
Regulatory Approvals General
Salesforce is not aware of any governmental license or regulatory permit that appears to be material to Tableau’s business that might be adversely affected by the acquisition of Tableau shares pursuant to the offer or the merger or, except as described below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Tableau shares pursuant to the offer or the merger. Should any of these approvals or other actions be required, Salesforce and the Offeror currently contemplate that these approvals or other actions will be sought. There can be no assurance that (a) any of these approvals or other actions, if needed, will be obtained (with or without substantial conditions), (b) if these approvals were not obtained or these other actions were not taken, adverse consequences would not result to Tableau’s business or (c) certain parts of Tableau’s or any of its subsidiaries’ businesses would not have to be disposed of or held separate. The Offeror’s obligation under the offer to accept for exchange and pay for shares is subject to certain conditions. See “The Offer—Conditions of the Offer.”
Subject to the terms and conditions of the merger agreement, Salesforce and Tableau have agreed to use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the offer and the merger as soon as practicable after the date of the merger agreement. Notwithstanding the foregoing, none of Salesforce, the Offeror or any of their respective subsidiaries is required to, and Tableau may not and may not permit any of its subsidiaries to, without the prior written consent of Salesforce, become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (a) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of Tableau, Salesforce or their respective subsidiaries, (b) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of Tableau, Salesforce or their respective subsidiaries or (c) impose any restriction, requirement or limitation on the operation of the business or portion of the business of Tableau, Salesforce or their respective subsidiaries. However, if requested by Salesforce, Tableau or its subsidiaries will become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on Tableau or its subsidiaries in the event the merger is completed.
HSR ActU.S. Antitrust
Under the HSR Act and the rules and regulations promulgated thereunder, the offermergers may not be completed until Salesforce and TableauSlack each files a Notification and Report Form with the Federal Trade Commission (which we refer to as the “FTC”) and the Antitrust Division of the U.S. Department of Justice (which we refer to as the “DOJ”), and the applicable waiting period has expired or been terminated. A transaction notifiable under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filings of their respective HSR Act notification and report forms or the early termination of that waiting period. If the FTC or DOJ issues a request for additional information and documents (a(which we refer to as the “Second Request”) prior to the expiration of the initial waiting period, the parties must observe a second 30-day waiting period, which would begin to run only after both parties have substantially complied with the Second Request, unless the waiting period is terminated earlier or the parties otherwise agree to extend the waiting period. Salesforce and TableauSlack each filed a Notification and Report Form with respect to the transaction with the FTC and DOJ on December 14, 2020. The waiting period with respect to the notification and report forms filed under the FTCHSR Act is scheduled to expire at 11:59 p.m., Eastern Time, on June 14, 2019.January 13, 2021, unless extended or earlier terminated. At any time before or after consummation of the transactions, notwithstanding the termination or expiration of the waiting period under the HSR Act, the FTC or the DOJ could take such action under the antitrust laws as it deems necessary under the applicable statutes, including seeking to enjoin the completion of the offer or the merger,mergers, seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or to terminate existing relationships and contractual rights. At any time before or after the completion of the transactions, and notwithstanding the termination or expiration of the waiting period under the HSR Act, any state could take such action under the antitrust laws as it deems necessary. Such action could include seeking to enjoin the completion of the offer or the mergermergers or seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or to terminate existing relationships and contractual rights. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the transactions on antitrust grounds will not be made, or if such a challenge is made, what the result will be. The parties obligation to consummate the transaction is subject to certain conditions. See “The Offer—Conditions of the Offer” for certain conditionssection entitled “The Merger Agreement—Conditions to the offer, including conditions with respect to the HSR Act.Mergers.” German Antitrust ApprovalForeign Regulatory Approvals
The merger ismergers are also subject to clearance or approval underby regulatory authorities in certain other jurisdictions. The merger cannot be completed until Salesforce and Slack obtain clearance to consummate the antitrust lawsmerger or applicable waiting periods have expired or been terminated in Germany. The German Act Against Restraints of Competition of 1958,each applicable jurisdiction. Salesforce and Slack, in consultation and cooperation with each other, will file notifications, as amended (which we refer torequired with regulatory authorities in certain other jurisdictions, as promptly as practicable after the “German ARC”) imposes a pre- merger notification requirement on transactions that qualify as concentrations within the meaning of the law and meet certain specified turnover thresholds, which the present merger meets. Accordingly, consummationdate of the merger is conditional upon clearance or approval being received from theBundeskartellamt (Federal Cartel Office, which we refer to as the “FCO”). Clearance is considered granted if, after a transaction has been notified, the applicable one-month waiting period expires without the decision by the FCO to open in-depth Phase II proceedings or if the FCO explicitly clears the transaction before the expiration of the waiting period. If the FCO initiates Phase II proceedings, clearance is granted by way of a formal decision, or, if the decision is not served upon the notifying undertakings within a period of four months from receipt of the complete notification, is deemed to be granted.
Salesforce notified the FCO of the proposed transaction on June 21, 2019.
agreement. The FCOrelevant regulatory authorities could take such actions under the applicable antitrustregulatory laws as they deem necessary or desirable, including seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. There is no assurance that Although Salesforce and Tableau willSlack currently believe they should be able to obtain the required antitrust clearanceregulatory approvals described above in a timely manner, they cannot be certain when or if it will be obtained or, if obtained, whether such expiration, termination or approval on a timely basis, if at all.will require terms, conditions or restrictions not currently contemplated that will be detrimental to Salesforce or its subsidiaries, the surviving corporation, or the surviving company after the completion of the mergers. Salesforce and Slack have agreed to take certain actions to obtain the required regulatory approvals. For additional information, see the section entitled “The Merger Agreement—HSR and Other Regulatory Approvals.” -90-
Neither Salesforce nor Slack is aware of any material governmental approvals or actions that are required for completion of the mergers other than as described above. It is presently contemplated that if any such additional material governmental approvals or actions are required, those approvals or actions will be sought. Interests of Certain PersonsSlack Directors and Executive Officers in the OfferMergers In considering the recommendation of the Slack board with respect to the merger proposal and the Mergernon-binding compensation advisory proposal, Slack stockholders should be aware that the directors and executive officers of Slack have interests in the mergers that may be different from, or in addition to, the interests of Slack stockholders generally. The members of the Slack board were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement, in approving the merger agreement and in determining to recommend that Slack stockholders approve the merger proposal. EffectArrangements with Salesforce
Certain of Slack’s executive officers have interests in the form of continued employment with Salesforce following the completion of the Offer and the Merger on Tableau Common Stock and Equity Awardsmergers. Consideration for Tableau Common Stock inNew Offer Letters with Salesforce
In connection with the Merger The following table sets forthmerger agreement and contingent upon the numberclosing of shares of Tableau common stock beneficially owned as of June 24, 2019 bythe mergers, each of Tableau’s executive officersStewart Butterfield, Cal Henderson and directors, excluding shares issuable upon exerciseTamar Yehoshua entered into offer letters with Salesforce pursuant to which Mr. Butterfield will serve as President and Chief Executive Officer of stock options or vestingSlack, Mr. Henderson will serve as Chief Technology Officer of Slack and Ms. Yehoshua will serve as Chief Product Officer of Slack. Under the offer letters, Mr. Butterfield is entitled to an annual base salary of $650,000, and Mr. Henderson and Ms. Yehoshua are each entitled to an annual base salary of $500,000. Mr. Butterfield will have a target annual bonus opportunity under the Salesforce Gratitude Bonus Plan of 100% of his annual base salary, and Mr. Henderson and Ms. Yehoshua’s target annual bonus opportunity under the Salesforce Gratitude Bonus Plan will be 50% of their annual base salary. The offer letters also provide for Salesforce to grant each of Mr. Henderson and Ms. Yehoshua the following Salesforce equity awards: (i) a number of restricted stock units or performance share units, and(which we refer to as the aggregate transaction consideration payable for such shares. Each holder of shares of Tableau common stock who otherwise would be entitled to receive a fraction of a share of Salesforce common stock under the merger agreement will receive cash, without interest, in an amount equal to such fractional part of a share of Salesforce common stock multiplied“retention RSUs”) calculated by dividing $2,500,000 by the volume weighted average closing sale price of one (1) share of Salesforce common stock as reported onduring the NYSE fortwo calendar months preceding the ten consecutive trading days ending onmonth in which the trading day immediately priorretention RSUs will be granted and (ii) an option to the acceptance timeacquire a number of shares of Salesforce common stock (which we refer to as the “Salesforce trading price”“retention options”), rounded to calculated by dividing $2,500,000 by the nearest whole cent. The amounts in this table assume thatquotient obtained by dividing the transaction consideration is $177.88, the product of the exchange ratio and $161.27, theaverage closing sale price of one share of Salesforce common stock on June 7, 2019 (the trading dayduring the two calendar months preceding June 10, 2019, the date onmonth in which the executionstock options will be granted by the Salesforce option conversion factor. The retention RSUs and retention options will vest as to 50% of the mergershares of Salesforce common stock underlying the awards on each of the third and fourth anniversaries of the grant date, subject to continued employment with Salesforce.
Waiver Letters with Salesforce On November 30, 2020, each of Mr. Butterfield, Mr. Henderson and Ms. Yehoshua entered into a waiver and acknowledgment agreement waswith Salesforce and Slack (each of which we refer to as a “waiver letter” and collectively the “waiver letters”) that amends the rights that each executive has under the Executive Severance Plan (as defined in “—Slack Amended and Restated Executive Severance Plan”) in consideration for the benefits that each executive may receive as a result of the completion of the mergers and continued employment with Slack, Salesforce or one of their respective affiliates. Under the waiver letters, the vesting schedule of each Slack equity award held by Messrs. Butterfield and Henderson that is outstanding as of the closing of the mergers is amended to provide that 50% of the shares underlying such equity awards (determined on a tranche by tranche basis) will vest on each of the first publicly announced). This information is basedand second anniversaries of the closing of the mergers, subject to continued employment with Salesforce. Under Ms. Yehoshua’s waiver letter, the vesting of any Slack equity award held by Ms. Yehoshua that remains outstanding and unvested as of the second anniversary of the closing of the mergers -91-
will fully accelerate on such second anniversary of the closing, subject to continued employment with Salesforce. The waiver letters also provide for the following: (i) the definition of “good reason” as it applies to the executive will no longer include a material diminution in the executive’s position, responsibilities, authority or duties as grounds for a resignation for good reason, (ii) Mr. Butterfield, Mr. Henderson and Ms. Yehoshua will not have the right to assert good reason under the terms of the Executive Severance Plan or any of executive’s equity award agreements with Slack as a result of any changes to executive’s position, responsibilities, authority or duties and (iii) the accelerated vesting of equity awards in connection with certain terminations of the executive’s employment will only apply to unvested awards held by the executive prior to the closing of the mergers. The waiver letters also provide that each executive will be eligible to participate in any Salesforce severance plan applicable to similarly situated employees of Salesforce once the Executive Severance Plan ceases to apply on the numberfirst anniversary of sharesthe closing of Tableau common stockthe mergers. Treatment of Executive Officer and Director Equity Awards in the Mergers Slack Restricted Stock Units and Slack Restricted Share Awards held by Tableau’s directors and executive officers as of June 24, 2019. The amounts set forth in the table below are as calculated before any taxes that may be due on such amounts are paid. | | | | | | | | | | | | | Name | | Number of Shares of
Tableau Common Stock
Beneficially Owned | | | Number of Shares of
Salesforce Common
Stock for Shares | | | Total Value of Shares(1) | | Adam Selipsky | | | 8,725 | | | | 9,623 | | | $ | 1,551,901 | | Christian Chabot | | | 2,349,598 | | | | 2,591,606 | | | $ | 417,948,300 | | Patrick Hanrahan | | | 6,863,170 | | | | 7,570,076 | | | $ | 1,220,826,157 | | Christopher Stolte | | | 1,141,661 | | | | 1,259,252 | | | $ | 203,079,570 | | William Bosworth | | | 9,153 | | | | 10,095 | | | $ | 1,628,021 | | Elliott Jurgensen, Jr. | | | 2,722 | | | | 3,002 | | | $ | 484,133 | | Hilarie Koplow-McAdams | | | 5,549 | | | | 6,120 | | | $ | 986,972 | | Gerri Martin-Flickinger | | | 1,452 | | | | 1,601 | | | $ | 258,193 | | John McAdam | | | 16,835 | | | | 18,569 | | | $ | 2,994,623 | | Brooke Seawell | | | 31,297 | | | | 34,520 | | | $ | 5,567,040 | | Damon Fletcher | | | 2,861 | | | | 3,155 | | | $ | 508,807 | | Keenan Conder | | | 45,069 | | | | 49,711 | | | $ | 8,016,893 | | Dan Miller | | | 10,255 | | | | 11,311 | | | $ | 1,824,125 | | Mark Nelson | | | 12,113 | | | | 13,360 | | | $ | 2,154,567 | |
(1) | Does not include cash for fractional shares of Salesforce common stock.
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Consideration for Tableau Options in the Merger—GenerallyNon-Employee Directors
At the first effective time, each Tableau optionoutstanding Slack RSU award and each Slack restricted share award that is outstanding and unexercised immediately prior toheld by a non-employee director of Slack will vest as of the first effective time (whether vested or unvested) held by any former employee of Tableauand will be cancelled and converted into the right to receive the transactionmerger consideration in respect of each “net share”share of Slack common stock subject to such Slack RSU award or Slack restricted share award. Slack Options, Slack Restricted Stock Units and Slack Restricted Share Awards held by Executive Officers At the first effective time, each Slack option, Slack RSU award and Slack restricted share award that is outstanding immediately prior to the first effective time and held by an executive officer of Slack will be assumed at the first effective time and converted into an adjusted option, an adjusted RSU award or adjusted restricted share award in a manner that preserves the intrinsic value of the award as further described below in the section entitled “The Mergers—Treatment of Slack Equity Awards.” Under the Executive Severance Plan, each assumed option, adjusted RSU award and adjusted restricted share award will be subject to full vesting acceleration upon a termination of the executive officer’s employment by Salesforce without cause or by the executive for good reason prior to the first anniversary of the closing of the mergers as further described below under the section entitled “—Executive Severance Plan.” The Slack options, Slack RSU awards and Slack restricted share awards held by Messrs. Butterfield and Henderson and Ms. Yehoshua and assumed by Salesforce are subject to the modified and accelerated vesting terms provided in their waiver letters as described above under the section entitled “Waiver Letters with Salesforce.” Quantification of Payments For an estimate of the amounts that would be payable to each of Slack’s named executive officers on settlement of their assumed Slack equity awards, see the section entitled “ —Merger-Related Compensation—Golden Parachute Compensation” below. The estimated aggregate amount that would be payable to Slack’s three covered executive officers who are not named executive officers in settlement of their currently outstanding unvested options to purchase 385,446 shares of Slack common stock upon the first effective time of the first merger is $8,685,437, and the estimated aggregate amount that would be payable to Slack’s three covered executive officers who are not named executive officers in settlement of their 1,128,767 currently outstanding Slack RSUs upon the first effective time is $48,254,789. The estimated aggregate amount that would be payable to Slack’s seven non-employee directors in settlement of their 142,263 Slack RSUs that are currently outstanding is $6,081,743, and the estimated amount that would be payable to two of Slack’s non-employee directors in settlement of such directors’ 130,377 currently outstanding Slack restricted shares is $5,573,617. The amounts in this paragraph are determined using a per share price of Slack common stock of $42.75, the average closing price of a share of Slack Class A common stock over the first five business days following the first public announcement of the mergers. -92-
Slack Amended and Restated Executive Severance Plan Each of Slack’s executive officers participates in the Slack Amended and Restated Executive Severance Plan (which, as amended or modified from time to time, we refer to as the “Executive Severance Plan”) that provides for severance and accelerated vesting benefits in connection with certain terminations of employment. Under the Executive Severance Plan, if an executive’s employment with Slack is terminated by Slack without cause or the executive resigns for good reason, as each is defined in the Executive Severance Plan, then, in exchange for a release of claims, the executive would be entitled to receive (i) a lump sum cash payment equal to 6, or, in the case of Mr. Butterfield, 12 months’ of the executive’s base salary and (ii) a monthly cash payment over 6 or, in the case of Mr. Butterfield, 12 months in an amount equal to Slack’s monthly contribution towards healthcare coverage. In the event the termination or resignation occurs within the period beginning three months prior to a change in control, including the mergers, and ending 12 months after the change in control, then, in lieu of the foregoing benefits, the executive would be entitled to receive (i) a lump sum cash payment equal to 12 months’ of the executive’s base salary, (ii) a monthly cash payment over 12 months in an amount equal to Slack’s monthly contribution towards healthcare coverage, (iii) accelerated vesting of all equity awards held by the executive; provided, that any equity awards subject to performance conditions will be deemed satisfied at the higher of target levels specified in the applicable award agreements or actual achievement, and (iv) a lump sum cash amount equal to the executive’s annual target bonus, pro-rated through the date of termination or resignation. Payments under the Executive Severance Plan are subject to a clawback in the event that Slack determines that after an eligible participant’s date of termination that circumstances constituting cause existed at or prior to the eligible participant’s date of termination. No Section 280G Golden Parachute Excise Tax Gross-Ups Neither the Executive Severance Plan, nor any other Slack plan, policy, agreement or arrangement provides any employee, officer or director with the right to a tax “gross-up” payment in connection with any “golden parachute” or other tax liability triggered in connection with the mergers. Annual Cash Bonus Executive officers will remain eligible for an annual cash bonus under the Slack 2021 Discretionary Bonus Plan based on the achievement of pre-established performance criteria. Slack expects to adopt a fiscal year 2022 bonus program in early 2021 consistent with the 2021 Discretionary Bonus Plan. If the closing of the mergers occurs on or after July 31, 2021, a pro-rated portion of the fiscal year 2022 Discretionary Bonus Plan will be paid out to Slack executive officers, as well as all other employees, immediately prior to the closing of the mergers based on 100% of target. As of the date of this proxy statement/prospectus, Slack has not determined the 2021 annual bonus amount for any executive officer. Merger-Related Compensation This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each of our named executive officers that is based on or otherwise relates to the mergers and that will or may become payable to the named executive officers at the completion of the mergers or on a qualifying termination of employment upon or following the consummation of the mergers. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules. The “golden parachute” compensation payable to these individuals is subject to a non-binding advisory vote of Slack stockholders. The “named executive officers” are the individuals listed as such in Slack’s most recent annual proxy statement. The table below assumes that (i) the first effective time occurs on December 16, 2020; (ii) the employment of each named executive officer will be terminated immediately following the first effective time without cause or due to resignation for good reason entitling the named executive officer to receive severance payments and benefits under the Executive Severance Plan; (iii) the named executive officer’s base salary rate and annual target -93-
bonus remain unchanged from that in effect as of the date of this filing; (iv) the per share merger consideration is equal to $42.75; (v) no named executive officer receives any additional equity grants on or prior to the first effective time that will vest on or prior to the first effective time; and (vi) no named executive officer enters into a new agreement or is otherwise legally entitled to, prior to the first effective time, additional compensation or benefits. Golden Parachute Compensation | | | | | | | | | | | | | | | | | | Named Executive Officer | | Cash ($)(1) | | | Equity ($)(2) | | | Perquisites/
Benefits ($) | | | Total ($) | | Stewart Butterfield | | | 820,251 | | | | 92,949,856 | | | | — | | | | 93,770,107 | | Allen Shim | | | 620,120 | | | | 21,150,293 | | | | — | | | | 22,029,213 | | Robert Frati | | | 878,920 | | | | 16,543,881 | | | | — | | | | 17,164,001 | |
| (1) | The amounts for each named executive officer represent the aggregate dollar value of severance payments that the executive would be entitled to receive upon a termination of employment by Slack without cause or due to resignation for good reason under the Executive Severance Plan within the period commencing three months prior to and ending 12 months following a change in control of Slack as described in the subsection entitled “—Interests of Slack Directors and Executive Officers in the Mergers—Slack Amended and Restated Executive Severance Plan” above. |
| (2) | Amounts represent the value of unvested equity awards held by each named executive officer that would be accelerated upon a termination of employment by Slack without cause or due to resignation for good reason under the Executive Severance Plan within the period commencing three months prior to and ending 12 months following a change in control of Slack. |
The following table shows the number and estimated value of the unvested Slack options and Slack RSU awards held by the named executive officers: | | | | | | | | | | | | | | | | | | | | | | | | Number of
Shares of Slack
Common Stock
underlying
Unvested
Options | | | Value of
Unvested Slack
Options | | | Number of
Unvested
Slack RSUs
and Shares
of
Restricted
Stock | | | Value of
Unvested Slack
RSUs and
Restricted
Stock | | | Total Value of
Unvested
Options,
RSUs and
Restricted
Stock | | | Named Executive Officer | | (#) | | | ($)(A) | | | (#) | | | ($)(B) | | | ($) | | Stewart Butterfield | | | 697,471 | | | | 12,861,365 | | | | 1,873,415 | | | | 80,088,491 | | | | 92,949,856 | | Allen Shim | | | 178,294 | | | | 4,047,429 | | | | 400,067 | | | | 17,102,864 | | | | 21,150,293 | | Robert Frati | | | 244,809 | | | | 5,624,590 | | | | 255,422 | | | | 10,919,291 | | | | 16,543,881 | |
| (A) | The estimated value of the Slack options equals the aggregate merger consideration in respect of each share covered by such Slack option, less a number of shares having a value equal to the aggregate exercise price of such option. |
| (B) | The estimated value of Slack RSUs and Slack restricted stock equals the aggregate number of shares underlying the Slack RSUs or Slack restricted stock multiplied by $42.75, the average closing price per share of Slack Class A common stock over the first five business days following the first public announcement of the transaction. |
Treatment of Slack Equity Awards Consideration for Slack Options in the Mergers—Generally At the first effective time, each Slack option that is held by an individual who is not an employee of Slack and that is outstanding and unexercised immediately prior to the first effective time will be cancelled and such holders will be entitled to receive the merger consideration in respect of the number of shares of Slack common stock covered by such Tableauthe Slack option, where “net share” meansless a number of shares having a value equal to the quotient obtained by dividing (a) the product of (1) the excess, if any, of the “per share cash equivalent consideration” (defined below) over the per sharetotal exercise price applicable to such option. -94-
At the Tableau option, multiplied by (2) the number of shares subject to the Tableau optionfirst effective time, all other Slack options that are outstanding and unexercised immediately prior to the first effective time by (b) the per share cash equivalent consideration, less applicable tax withholdings. As used in the offer to exchange, the “per share cash equivalent consideration” means the product (rounded to the nearest cent) obtained by multiplying (i) the exchange ratio by (ii) the Salesforce trading price. At the effective time, each Tableau option not held by a former employee of Tableau at the effective timeSlack will be assumed and automatically converted into an adjusted option to purchase a number of shares of Salesforce common stock determined by multiplying the number of shares of Slack common stock equal to the number of shares covered by the Slack option by the option/RSU conversion ratio, at a per share exercise price equal to the per share exercise price of the Slack option divided by the option/RSU conversion ratio. The adjusted option will otherwise be subject to the same terms and conditions as were applicable to the corresponding Slack option prior to the first effective time, including vesting terms.
Consideration for Slack Restricted Stock Units and Slack Restricted Share Awards in the Mergers—Generally At the first effective time, each Slack RSU award and each Slack restricted share award that is outstanding immediately prior to the first effective time held by a non-employee director of Slack will vest as of the first effective time and will be cancelled and converted into the right to receive the merger consideration in respect of each share of Slack common stock subject to such Slack RSU award or Slack restricted share award. At the first effective time, each Slack RSU award (other than any such award held by any current or former non-employee director) will be assumed and converted into an adjusted RSU award with respect to a number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of TableauSlack common stock subject to the Tableau option immediately prior to the effective time by the exchange ratio. Each adjusted option will have an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per share exercise price of the Tableau option by the exchange ratio and will otherwise be subject to the same terms and conditions as were applicable to such Tableau option prior to the effective time. Consideration for Tableau Restricted Stock Units and Performance Share Units in the Merger—Generally
At the effective time, each Tableau RSU award that is outstanding immediately prior to the effective time held by a non-employee director of Tableau will vest as of the effective time and will be cancelled and converted into the right to receive the transaction consideration in respect of each share of Tableau common stock subject to such Tableau RSU award.
At the effective time, each Tableau RSU award held by an individual who is not a non-employee director of Tableau at the effective time will be assumed and automatically converted into a restricted stock unit, on the same terms and conditions as were applicable to such Tableau RSU award prior to the effective time, with respect to a number of shares of Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the TableauSlack RSU award by the exchangeoption/RSU conversion ratio. Each converted Tableauadjusted RSU award will be subject to the same terms and conditions as were applicable to such Tableauthe corresponding Slack RSU award prior to the first effective time, except that it will vest after the effective time solely based on continued service to Salesforce and its affiliates.including vesting terms.
At the first effective time, each Tableau PSUSlack restricted share award (other than any such award held by any current or former non-employee director) that is outstanding immediately prior to the first effective time will be assumed and automatically converted into aan adjusted restricted stock unitshare award with respect to a number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of TableauSlack common stock subject to the Tableau PSUSlack restricted share award by the exchange ratio; 0.1804; provided that the numberholder of shares of Tableau common stock subjecta Slack restricted share award is entitled to a Tableau PSU award equalscash in an amount equal to such fractional share multiplied by $260.50, rounded to the number of shares that would have vested based on the achievement of performance at target levels.nearest cent. Each converted Tableau PSUadjusted restricted share award will be subject to the same terms and conditions as were applicable to such Tableau PSUthe corresponding Slack restricted share award prior to the first effective time, including vesting terms except that it will vest after the effective time solely based on continued service to Salesforce and its affiliates. Treatment of Director Equity Awards
As of June 24, 2019, Tableau’s non-employee directors held Tableau options to purchase 289,812 shares of Tableau common stock, with exercise prices ranging from $7.17 to $7.47, all of which are vested. As of the same date, Tableau’s non-employee directors held Tableau RSU awards covering 18,686 shares and did not hold any Tableau PSU awards.
At the effective time, all Tableau options held by a non-employee director of Tableau will be assumed and automatically converted into options covering sharesapplicable repurchase price per share of Salesforce common stock as discussed above. At(rounded up to the effective time, each Tableau RSU award that is outstanding and heldnearest whole cent) will be determined by a non-employee director of Tableau will vest and be cancelled and automatically converted intodividing the right to receive the transaction consideration, as discussed above.
Please see “—Table of Estimated Consideration for Equity Awards” below for additional information.
Treatment of Executive Officer Equity Awards
As of June 24, 2019, Tableau’s executive officers held Tableau options to purchase 75,000 shares of Tableau common stock, with an exerciseper share repurchase price of $54.87,the Slack restricted share award by the restricted stock conversion ratio of which options to purchase 51,562 shares of Tableau common
stock are vested. As of the same date, Tableau’s executive officers held Tableau RSU awards covering 438,494 shares and held Tableau PSU awards covering 36,548 shares (assuming performance goals are achieved at target levels).
Assuming continued employment through the effective time, all Tableau options, Tableau RSU awards and Tableau PSU awards held by Tableau’s executive officers will be assumed and converted into awards covering shares of Salesforce common stock, as discussed above.
As discussed in more detail below, pursuant to the terms of the change in control agreements entered into with each of Tableau’s executive officers (each, a “change in control agreement”), if, within twelve months following the date of a change of control of Tableau, such as the completion of the offer, the executive officer’s employment is terminated by Tableau without cause (as such term is defined in the applicable change in control agreement) or the executive officer resigns for good reason (as such term is defined in the applicable change in control agreement), and provided the executive officer executes a general release in a form provided by Tableau at the time of his or her termination of employment, then vesting with respect to 100% of the then unvested shares subject to the executive officer’s adjusted options or converted Tableau RSU awards and converted Tableau PSU awards will accelerate.
Please see “—Table of Estimated Consideration for Equity Awards” below for additional information.
Table of Estimated Consideration for Equity Awards
Directors
The table below sets forth, for each of Tableau’s non-employee directors, the aggregate number of Tableau options and Tableau RSU awards that are held by Tableau’s non-employee directors as of June 24, 2019.
| | | | | | | | | | | | | | | | | | | | | | | | | Name | | Vested
Tableau
Options
(#)(1) | | | Unvested
Tableau
Options
(#)(2) | | | Value of
Tableau
Options ($)(3) | | | Tableau
RSU Awards
(#)(4) | | | Value of
Tableau
RSU Awards
($)(5) | | | Total ($)(6) | | Christian Chabot | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Patrick Hanrahan | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Christopher Stolte | | | 259,812 | | | | — | | | | 44,352,507 | | | | — | | | | — | | | | 44,352,507 | | William Bosworth | | | 1,000 | | | | — | | | | 170,690 | | | | 2,051 | | | | 364,832 | | | | 535,522 | | Elliott Jurgensen, Jr. | | | 29,000 | | | | — | | | | 4,941,890 | | | | 2,051 | | | | 364,832 | | | | 5,306,722 | | Hilarie Koplow-McAdams | | | — | | | | — | | | | — | | | | 5,236 | | | | 931,380 | | | | 931,380 | | Gerri Martin-Flickinger | | | — | | | | — | | | | — | | | | 5,246 | | | | 933,158 | | | | 933,158 | | John McAdam | | | — | | | | — | | | | — | | | | 2,051 | | | | 364,832 | | | | 364,832 | | Brooke Seawell | | | — | | | | — | | | | — | | | | 2,051 | | | | 364,832 | | | | 364,832 | |
(1) | Represents the number of Tableau options that are outstanding and vested in accordance with their terms as of June 24, 2019, assuming that such date occurs prior to the effective time.
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(2) | Represents the number of Tableau options that are outstanding and unvested in accordance with their terms as of June 24, 2019, assuming that such date occurs prior to the effective time.
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(3) | Equals (i) the number of shares of Tableau common stock subject to outstanding Tableau options as of June 24, 2019 (that is, the sum of the number of shares shown in the “Vested Tableau Options” and the “Unvested Tableau Options” columns), multiplied by (ii) (a) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019, reduced by (b) the exercise price of the Tableau option.
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(4) | Represents the number of Tableau RSU awards that will vest immediately prior to the effective time in accordance with the terms of the merger agreement, assuming the effective time occurs on June 24, 2019.
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(5) | Equals (i) the number of Tableau RSU awards, multiplied by (ii) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019.
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(6) | Equals the sum of the amounts shown in the “Value of Tableau Options” and the “Value of Tableau RSU Awards” columns.
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Executive Officers
The table below sets forth, for each of Tableau’s executive officers, the aggregate number of vested Tableau options that are held by Tableau’s executive officers as of June 24, 2019, and the aggregate number of unvested Tableau options and unvested Tableau RSU awards held by Tableau’s executive officers as of June 24, 2019 that would accelerate upon a qualifying termination.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Vested
Tableau
Options
(#)(1) | | | Value of
Vested
Tableau
Options
($)(2) | | | Accelerated
Unvested
Tableau
Options
Upon a
Qualifying
Termination
(#)(3) | | | Value of
Accelerated
Unvested
Tableau
Options
Upon a
Qualifying
Termination
($)(4) | | | Accelerated
Tableau
RSU
Awards
Upon a
Qualifying
Termination
(#)(5) | | | Value of
Accelerated
Tableau
RSU Awards
Upon a
Qualifying
Termination
($)(6) | | | Total
($)(7) | | Adam Selipsky | | | 51,562 | | | | 6,342,642 | | | | 23,438 | | | | 2,883,108 | | | | 231,592 | | | | 41,195,585 | | | | 50,421,335 | | Damon Fletcher | | | — | | | | — | | | | — | | | | — | | | | 50,355 | | | | 8,957,147 | | | | 8,957,147 | | Dan Miller | | | — | | | | — | | | | — | | | | — | | | | 87,115 | | | | 15,496,016 | | | | 15,496,016 | | Mark Nelson | | | — | | | | — | | | | — | | | | — | | | | 66,727 | | | | 11,869,399 | | | | 11,869,399 | | Keenan Conder | | | — | | | | — | | | | — | | | | — | | | | 39,253 | | | | 6,982,324 | | | | 6,982,324 | |
(1) | Represents the number of Tableau options that are outstanding and vested in accordance with their terms as of June 24, 2019, assuming such date occurs prior to the effective time.
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(2) | Equals (i) the number of shares of Tableau common stock shown in the “Vested Tableau Options” column, multiplied by (ii) (a) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019, reduced by (b) the exercise price of the Tableau option.
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(3) | Represents the number of Tableau options that would vest upon a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019. For each executive officer, this number represents 100% of the unvested shares subject to his Tableau options.
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(4) | Equals (i) the number of shares of Tableau common stock shown in the “Accelerated Unvested Tableau Options Upon a Qualifying Termination” column, multiplied by (ii) (a) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019, reduced by (b) the exercise price of the Tableau option. Assumes that each executive officer experiences a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019.
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(5) | Represents the number of Tableau RSU awards (including Tableau PSU awards) that would vest upon a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019. For each executive officer, this number represents 100% of the unvested shares subject to the awards and assumes any applicable performance metrics are achieved at target.
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(6) | Equals (i) the number of Tableau RSU awards shown in the “Accelerated Tableau RSU Awards Upon a Qualifying Termination” column, multiplied by (ii) $177.88, the product of the exchange ratio and $161.27, the closing sale price of Salesforce common stock on June 7, 2019. Assumes that each executive officer experiences a qualifying termination of employment immediately following the effective time, assuming the termination and effective time occurs on June 24, 2019.
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(7) | Equals the sum of amounts shown in the “Value of Vested Tableau Options,” “Value of Accelerated Unvested Tableau Options Upon a Qualifying Termination” and the “Value of Accelerated Tableau RSU Awards Upon a Qualifying Termination” columns.
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Tableau Shares Held by Tableau Officers and Directors
As of June 24, 2019, the directors and executive officers of Tableau and their affiliates beneficially owned approximately 10,500,460 Tableau shares, representing approximately 12.0% of the Tableau shares outstanding as of June 24, 2019.
Concurrently with the execution of the merger agreement, on June 24, 2019, Tableau board members Christian Chabot, Christopher Stolte and Patrick Hanrahan entered into a letter agreement with Salesforce and the Offeror, solely in their capacities as stockholders of Tableau, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock, which in the aggregate represent approximately 11.8% of the outstanding shares of Tableau common stock, prior to the expiration of the offer. The co-founders have also conveyed to both Salesforce and Tableau that they intend to tender into the offer. For more information regarding the letter agreement, see “Other Transaction Agreements—Letter Agreement,” and such letter agreement, which is filed as Exhibit 10.25 to this document.0.1804.
Founder Offer Letters and Arrangements
The founders do not receive compensation for their service as directors and instead are compensated for their services to Tableau as employees. Per the terms of their respective offer letters with Tableau, the founders are each entitled to receive certain severance benefits as described herein. For each founder, if, within twelve months following the date of a change of control of Tableau, such as the completion of the offer, the founder’s employment is terminated by Tableau without cause or, solely with respect to Messrs. Chabot and Stolte, such founder resigns for good reason, and provided that such founder executes a general release in a form provided by Tableau at the time of his termination of employment, then such founder will be entitled to: (i) a lump sum payment equal to twelve months’ of base salary for Messrs. Chabot and Stolte and six months’ of base salary for Mr. Hanrahan and (ii) reimbursement of COBRA premiums for a period of up to twelve months for Messrs. Chabot and Stolte and up to six months for Mr. Hanrahan. Each of Mr. Stolte and Mr. Chabot would also be entitled to vest in any then-unvested Tableau equity awards. The estimated amount of these payments is $130,000 for each of Messrs. Stolte and Chabot and $50,000 for Mr. Hanrahan. As of June 24, 2019, neither of Messrs. Stolte and Chabot hold any unvested Tableau equity awards.
Offer Letters
Each of Tableau’s executive officers is an at-will employee. Offer letters with Tableau’s executive officers set forth the executive officer’s salary, short-term and long-term incentive compensation opportunities, signing bonus and benefit plan participation. Each of Tableau’s executive officers has also executed Tableau’s standard form of confidential information and invention assignment agreement.
Change in Control Agreements
In order to ensure retention of key personnel and continuity of the business in the event of a change in control, Tableau has also previously entered into change in control agreements with key personnel, including each of Tableau’s named executive officers, the terms of which were approved by Tableau’s Compensation Committee.
The change in control agreements provide for the following benefits upon a “Covered Termination” (as described below):
a lump sum payment equal to twelve months of such executive’s then-current base salary;
reimbursement of COBRA premiums for a period of up to twelve months; and
100% acceleration of vesting of all then-unvested equity awards held by such executive.
For purposes of the change in control agreements:
“Covered Termination” means dismissal or discharge for reasons other than Cause (and other than as a result of death or disability), or termination of employment for Good Reason, either of which occurs within twelve months following the effective date of a change in control.
“Cause” means the executive’s (i) willful failure to substantially perform his or her duties to Tableau or deliberate and material violation of a Company policy; (ii) commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to Tableau; (iii) unauthorized use or disclosure by executive of any proprietary information or trade secrets of Tableau or any other party to whom the named executive officer owes an obligation of nondisclosure as a result of his or her relationship with Tableau; or (iv) willful breach of any obligations under any written agreement or covenant with Tableau, in each case in the reasonable determination of the Tableau board of directors.
“Good Reason” means the occurrence of one or more of the following, without an executive’s express written consent (i) a material reduction in executive’s responsibilities, provided that neither a mere change in title alone nor reassignment following a change in control to a position that is substantially similar to the position held prior to the change in control will constitute a material reduction in job responsibilities; (ii) relocation by Tableau or a subsidiary, parent, affiliate or successor thereto, as appropriate, of executive’s primary business location that increases one way commute by more than 35 miles; or (iii) a reduction in then-current base salary by at least 10%, provided that an across-the-board reduction in the salary level of all other employees or consultants in positions similar to executive’s by the same percentage amount as part of a general salary level reduction will not constitute such a salary reduction.
Payment of any severance benefits described above is conditioned on the executive’s timely execution of a general release of claims in Tableau’s favor and compliance with a twelve month non-compete.
Salesforce Offer Letters
Tableau’s executive officers have entered into new offer letters for continued at-will employment with Salesforce in connection with the transaction. These offer letters with Salesforce (which we refer to as the “Salesforce offer letters”), which will be effective as of the effective time (with the compensation and benefits set forth therein to become effective on a date chosen by Salesforce), provide each individual with an annual base salary, annual cash incentive bonus, equity-based awards, and participation in Salesforce benefit plans. All equity grants (stock options and restricted stock units (which we refer to as “RSUs”)) require continuous service over an extended period of time (up to four years in some cases) in order to vest, are subject to approval of the Compensation Committee of the Salesforce Board of Directors, and will be subject to Salesforce’s applicable equity plan documents and individual award agreements. The Salesforce offer letters are described in more detail below.
| • | | Adam Selipsky. Mr. Selipsky will serve as Chief Executive Officer and President of Tableau, with an annual base salary of $800,000 and a target annual bonus of 100% of base salary. Immediately prior to the effective time, Tableau will pay Mr. Selipsky his target bonus under his current bonus plan with Tableau, with such amount pro-rated based on the number of days lapsed between January 1 of the year in which the effective time occurs and the date of the effective time. Mr. Selipsky will be granted RSUs with a value of $5,500,000, with 25% vesting on the first anniversary of the grant date and 1/16thvesting each quarter thereafter; RSUs with a value of $4,000,000, with 40% vesting on the third anniversary of the grant date and 60% vesting on the fourth anniversary of the grant date; stock options with a value of $5,500,000, with 25% vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $4,000,000, with 40% vesting on the third anniversary of the grant date and 60% vesting on the fourth anniversary of the
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| grant date. Continued vesting is in all cases subject to Mr. Selipsky’s continued employment through the applicable vesting date. As of the effective time, any of Mr. Selipsky’s outstanding Tableau equity awards that are outstanding as of immediately prior to the effective time will be assumed and converted into Salesforce awards, except that 50% of any Tableau equity awards scheduled to vest after the third anniversary of the effective time will instead vest on the second anniversary of the effective time and 50% of any Tableau equity awards scheduled to vest after the third anniversary of the effective time will instead vest on the third anniversary of the effective time, in all cases subject to Mr. Selipsky’s continued employment through the applicable vesting date. Commencing in March 2020, Mr. Selipsky will be eligible to receive annual refresh grants of equity awards, as determined in the sole discretion of the Salesforce Board of Directors Compensation Committee. Salesforce intends to recommend to the Compensation Committee that the amount of such refresh be $12,000,000, with standard vesting terms. In March 2021, Mr. Selipsky will be eligible to receive an annual refresh grant of equity awards, as determined in the sole discretion of the Salesforce Board of Directors Compensation Committee. Salesforce intends to recommend to the Compensation Committee that the amount of this such refresh be $13,000,000, with standard vesting terms.
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| • | | Damon Fletcher. Mr. Fletcher will serve as Chief Financial Officer of Tableau, with an annual base salary of $500,000 and a target annual bonus of $300,000. Mr. Fletcher will continue to participate in Tableau’s bonus plan through January 31, 2020. Mr. Fletcher’s Salesforce offer letter also provides for a cash retention bonus of $600,000, payable in four equal annual installments of $150,000, with the first payment to be paid no later than 30 days following the effective time of the transaction and the next three payments to be made on the first three anniversaries of the closing. In the event Mr. Fletcher’s employment is terminated, he will forfeit any unpaid portion of the cash retention bonus and the last installment of the retention bonus paid prior to his termination date will be subject to a pro-rated claw back, with proration based on the number of months he was employed between the last payment date prior to his termination and the 12 month anniversary of such payment date. Mr. Fletcher will be granted RSUs with a value of $1,000,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $3,500,000, with 3/7th vesting on the first anniversary of the grant date and 4/7th of the grant amount vesting on the second anniversary of the grant date; and stock options with a value of $1,000,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter. Continued vesting is in all cases subject to Mr. Fletcher’s continued employment through the applicable vesting date.
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| • | | Dan Miller. Mr. Miller will serve as EVP Sales, Services & Support of Tableau, and maintain his current annual base salary. Mr. Miller will continue to participate in and be eligible to earn incentive compensation in accordance with the terms in effect with Tableau as of the effective time through January 31, 2020; effective February 1, 2020, he will be eligible to earn incentive compensation pursuant to the terms of an incentive compensation plan with Salesforce. Mr. Miller will be granted RSUs with a value of $1,250,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date; stock options with a value of $1,250,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date. Continued vesting is in all cases subject to Mr. Miller’s continued employment through the applicable vesting date.
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Mark Nelson. Mr. Nelson will serve as EVP, Product Development of Tableau, and maintain his current annual base salary. Mr. Nelson will continue to be eligible to earn an annual bonus in accordance with the terms in effect with Tableau through January 31, 2020; effective February 1, 2020, he will be eligible to earn incentive compensation pursuant to the terms of an incentive compensation
| plan with Salesforce. Mr. Nelson will be granted RSUs with a value of $1,250,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date; stock options with a value of $1,250,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $2,500,000, with 40% of the grant amount vesting on the third anniversary of the grant date and 60% of the grant amount vesting on the fourth anniversary of the grant date. Continued vesting is in all cases subject to Mr. Nelson’s continued employment through the applicable vesting date.
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| • | | Keenan Conder. Mr. Conder will serve as EVP and General Counsel of Tableau, and maintain his current annual base salary. Mr. Conder will continue to be eligible to earn an annual bonus in accordance with the terms in effect with Tableau through January 31, 2020; effective February 1, 2020, he will be eligible to earn incentive compensation pursuant to the terms of an incentive compensation plan with Salesforce. Mr. Conder will be granted RSUs with a value of $500,000, with 25% vesting on the first anniversary of the grant date and 1/16th of the grant amount vesting each quarter thereafter; RSUs with a value of $1,500,000, with 50% vesting on the first anniversary of the grant date and 50% vesting on the second anniversary of the grant date; stock options with a value of $500,000, with 25% of the grant amount vesting on the first anniversary of the grant date and 1/48th of the grant amount vesting each month thereafter; and stock options with a value of $1,500,000, with 50% vesting on the first anniversary of the grant date and 50% vesting on the second anniversary of the grant date. Continued vesting is in all cases subject to Mr. Conder’s continued employment through the applicable vesting date.
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The Salesforce offer letters also amend the executive officers’ Tableau change in control agreements in certain respects:
Mr. Selipsky’s Salesforce offer letter amends his change in control agreement to provide for the following:
Accelerated vesting of equity awards applies only to those awards granted prior to the effective time.
The definition of “Covered Termination” in the change in control agreement is amended to extend the protected period from twelve months to thirty-six months following a change in control.
Clause (i) of the definition of “Good Reason” in the change in control agreement is amended and restated in its entirety as follows: “(A) solely if such event occurs during the 12 months following a Change in Control, a change in Executive’s reporting relationship or (B) a reduction in Executive’s grade level.”
Mr. Conder and Mr. Fletcher’s Salesforce offer letters amend their change in control agreements to provide for the following:
Accelerated vesting of equity awards applies only to those awards granted prior to the effective time.
The definition of “Covered Termination” in the change in control agreement is amended to extend the protected period from twelve months to twenty-four months following a change in control, except with respect to a resignation for Good Reason by reason of relocation and except as set forth in the following bullet.
Clause (i) of the definition of “Good Reason” in the change in control agreements is amended and restated in their entirety as follows: “(A) solely if such event occurs during the 12 months following a Change in Control, a reduction in Executive’s reporting level or (B) a reduction in Executive’s grade level.”
Mr. Miller and Mr. Nelson’s Salesforce offer letters amend their change in control agreements to provide for the following:
Accelerated vesting of equity awards applies only to those awards granted prior to the effective time.
The definition of “Covered Termination” in the change in control agreement is amended to extend the protected period from twelve months to twenty-four months following a change in control, except with respect to a resignation for Good Reason by reason of relocation and except as set forth in the following bullet.
Clause (i) of the definition of “Good Reason” in the change in control agreements is amended and restated in their entirety as follows: “(A) solely if such event occurs during the 12 months following a Change in Control, Executive ceasing to report to Adam Selipsky or his successor or (B) a reduction in Executive’s grade level.”
Slack Employee Stock Purchase Plan Any TableauPursuant to the merger agreement, as soon as practicable following the date of the merger agreement, Slack shall take all actions with respect to the ESPP that are necessary to provide that: (i) with respect to the current ESPP offering period that ends on April 9, 2021, no Slack employee who is not a participant in the ESPP as of the date of the merger agreement may not become a participant in any offering periods in effect under the ESPP as of the date of the merger agreement (which we refer to as the “current ESPP offering periods”) and no current participant may increase the percentage amount of his or hersuch participant’s payroll deduction election from that in effect on the date of the merger agreement for such current ESPP offering periods. If the current ESPP offering periodsperiod; (ii) subject to the consummation of the mergers, the ESPP shall terminate effective immediately prior to the first effective time; (iii) if the first effective time occurs after April 9, 2021 (the end of the current ESPP offering period), then the ESPP willshall be suspended and no new offering period will commenceshall be commenced under the ESPP prior to the termination of the merger agreement. If anyagreement; and (iv) if the first effective time occurs before April 9, 2021 (the end of the current ESPP offering period is still in effect at the effective time,period), then the last day of suchthe current ESPP offering period willshall be accelerated to thea date three business days prior to the closing date. Subject to the consummationdate of the merger, the ESPP will terminate effective immediately prior to the effective time.mergers.
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Indemnification and InsuranceRegistration of Salesforce Common Stock
UnderPursuant to the merger agreement, as soon as reasonably practicable after the first effective time, Salesforce will file one or more appropriate registration statements with the SEC (on Form S-3 or Form S-8, or any successor or other appropriate forms) relating to the shares of Salesforce common stock issuable with respect to the adjusted options, adjusted RSU awards and adjusted restricted share awards. Salesforce will use commercially reasonable efforts to maintain the effectiveness of such registration statement or statements for a period of not less thanso long as any adjusted options, adjusted RSU awards and adjusted restricted share awards remain outstanding.
Indemnification and Insurance For six years after the first effective time, of the merger, Salesforce must, andor must cause the surviving corporation in the mergercompany to, indemnify and hold harmless, to the fullest extent permitted under applicable law and the organizational documents of TableauSlack or its subsidiaries, or any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce, each current and former director and officer of Tableau and its subsidiariesthe indemnified parties against any costs and expenses (including advancing attorneys’ fees and expenses) in connection with any actual or threatened claims in respect of acts or omissions occurring or alleged to have occurred at or prior to the first effective time, of the merger, whether asserted or claimed prior to, at or after the first effective time, of the merger, in connection with such person serving as an executive officer, director, employee or other fiduciary of Tableau,Slack, any of its subsidiaries or any other person if such service was at the request or for the benefit of TableauSlack or any of its subsidiaries. In addition, for a period of six years following the first effective time, of the merger, Salesforce is required to maintain in effect the provisions in the organizational documents of TableauSlack and any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce (except to the extent such agreement provides for an earlier termination) regarding elimination of liability, indemnification of executive officers, directors and employees and advancement of expenses that are in existence as of the date of the merger agreement. At or prior to the first effective time, of the merger, TableauSlack is required to purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the first effective time of the merger with respect to matters arising at or prior to the first effective time, of the merger, with a one-time cost not in excess of 300% of the last aggregate annual premium paid by TableauSlack for its directors’ and officers’ liability insurance and fiduciary liability insurance prior to the date of the merger agreement, and if the cost of such “tail” insurance policy would otherwise exceed such amount, TableauSlack may purchase as much coverage as reasonably practicable for such amount. See “Merger For additional information, see the section entitled “The Merger Agreement—Directors’ and Officers’ Indemnification Insurance.” Listing of Salesforce Shares; Delisting and Insurance.”Deregistration of Slack Common Stock Salesforce will use its reasonable best efforts to cause the shares of Salesforce common stock to be issued in the first merger to be listed for trading on the NYSE, and following the first effective time, the parties will cooperate in taking, or causing to be taken, all actions necessary to delist the Class A common stock of Slack from the NYSE and deregister such shares under the Exchange Act, effectively terminating Slack’s obligations to file periodic reports with the SEC pursuant to the Exchange Act. Accounting Treatment of the Mergers Salesforce and Slack prepare their respective financial statements in accordance with GAAP. The accounting guidance for business combinations requires the use of the acquisition method of accounting for the mergers, which requires the determination of the acquirer, the purchase price, the acquisition date, the fair value of assets and liabilities of the acquiree and the measurement of goodwill. Salesforce will be treated as the acquirer for accounting purposes. -96-
Section 16 MattersTreatment of Indebtedness
Pursuant toFor a description of Salesforce’s and Slack’s existing indebtedness, see Salesforce’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2020, filed on December 4, 2020, and Slack’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2020, filed on December 3, 2020, each of which is incorporated by reference into this proxy statement/prospectus.
For more details on the treatment of Slack’s existing indebtedness under the merger agreement, priorsee the section entitled “The Merger Agreement—Treatment of Indebtedness.” The terms and timing of any offers to purchase and/or convertible note consent solicitations (as defined in the effective timesection entitled “The Merger Agreement—Treatment of Indebtedness”) discussed in this proxy statement/prospectus have not been determined as of the merger, Tableau and Salesforce have agreeddate of this proxy statement/prospectus. This proxy statement/prospectus does not constitute an offer to as applicable, take all such steps as may be reasonably necessarysell or advisablethe solicitation of an offer to causebuy any dispositions of equity securities of Tableau (including derivative securities) and acquisitions of equitydebt securities of Salesforce pursuantor Slack. It does not constitute a prospectus or prospectus equivalent document for any such securities. No offering of any debt securities of Salesforce shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act or an exemption therefrom. Financing of the Mergers Salesforce anticipates that the funds needed to complete the transactions contemplated by the merger agreement by each individual who iswill be derived from a director or officercombination of Tableau subject to the reporting requirements of Section 16(a) of the Exchange Act(i) available cash on hand and (ii) third party debt financing. In connection with respect to Tableau to be exempt under Rule 16b-3 promulgated under the Exchange Act. Rule 14d-10(d) Matters
The compensation committee of the Tableau board of directors at a meeting to be held prior to the acceptance time, will duly adopt resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (i) each employment compensation, severance and other employee benefit plans of the Tableau directors, executive officers and employees effective on or prior to the dateits entry into the merger agreement, or entered into thereafterSalesforce obtained a commitment from Citigroup Global Markets Inc., Bank of America, N.A., JPMorgan Chase Bank, N.A. and prior to the effective time, and (ii) certain provisions of the merger agreement relating to indemnification, insurance and other compensation and benefits provided to Tableau’s directors, executive officers and employees. In addition, the compensation committee of the Tableau board of directors will take all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act, including with respect to the foregoing arrangements and any other applicable transactions contemplated by the merger agreement.
Certain Relationships with Tableau
As of the date of this document, Salesforce does not own any shares of Tableau common stock. Neither Salesforce nor the Offeror has effected any transaction in securities of Tableau in the past 60 days. To the best of Salesforce’s and the Offeror’s knowledge, after reasonable inquiry, none of the persons listed on Annex C hereto, nor any of their respective associates or majority-owned subsidiaries, beneficially owns or has the right to acquire any securities of Tableau or has effected any transaction in securities of Tableau during the past 60 days.
Tableau has been a Salesforce customer for over five years, and Salesforce has been a customer of Tableau for over a decade.
Salesforce and Tableau entered into a confidentiality agreement, dated February 27, 2019 in connection with their evaluation of the potential business combination that resulted in the execution of the merger agreement. Pursuant to the confidentiality agreement, subject to certain customary exceptions, Salesforce and Tableau agreed to keep confidential all non-public information received from the other party. Salesforce and Tableau also agreed that the non-public information furnished by the other party pursuant to the confidentiality agreement would be used solely for the purpose of evaluating, negotiating and consummating the potential business combination. The confidentiality agreement contains a customary “standstill” provision that prohibits Salesforce, its subsidiaries or representatives acting on its behalf from taking certain actions involving or with respect to Tableaufinancial institutions for a one-year period, subject to certain exceptions set forth in the confidentiality agreement. See “Other Transaction Agreements—Confidentiality Agreement” and the confidentiality agreement,364-day senior unsecured bridge loan facility, which is filed as Exhibit 99.5 to this document.
Salesforce and Tableau entered into an exclusivity agreement, dated May 18, 2019 and amended on June 4, 2019, in connection with their evaluation of the potential business combination that resulted in the execution of the merger agreement. The exclusivity agreement set forth certain terms on which Salesforce and Tableau would conduct negotiations regarding the potential business combination that resulted in the execution of the merger agreement. See “Other Transaction Agreements—Exclusivity Agreement” and the exclusivity agreement and the amendment to the exclusivity agreement, copies of which have been filed as Exhibit 99.6 and Exhibit 99.7 to this document.
Fees and Expenses
Salesforce has retained Morrow Sodali LLC as information agent in connection with the offer and the merger. The information agent may contact holders of shares by mail, email, telephone, facsimile and personal interview and may request brokers, dealers and other nominee stockholders to forward material relating to the offer and the merger to beneficial owners of shares. Salesforce will pay the information agent reasonable and customary compensation for these services in addition to reimbursing the information agent for its reasonable out-of-pocket expenses. Salesforce agreed to indemnify the information agent against certain liabilities and expenses, including certain liabilities under the U.S. federal securities laws.
In addition, Salesforce has retained American Stock Transfer and Trust Company, LLC as exchange agent in connection with the offer and the merger (which we refer to as the “exchange agent”)“bridge loan facility”. The original commitments in respect of the bridge loan facility were $10.0 billion, but were reduced to $7.0 billion on December 23, 2020 following Salesforce’s entry into the term loan agreement referred to below. The availability of the bridge loan facility is conditioned on the consummation of the acquisition of Slack in accordance with the terms of the merger agreement (subject to certain exceptions and qualifications) and certain other conditions. Salesforce will payexpects to replace the exchange agent reasonable and customary compensation for its servicesremaining commitments in respect of the bridge loan facility prior to the consummation of the mergers with the proceeds of the issuance of one or more series of senior unsecured debt securities and/or other incurrences of indebtedness (or commitments in respect thereof).
On December 23, 2020, Salesforce entered into a $3.0 billion three-year senior unsecured term loan agreement to finance a portion of the cash consideration payable by Salesforce in connection with the offermergers, the repayment of certain debt of Slack and the merger, will reimburse the exchange agent for its reasonable out-of-pocket expenses and will indemnify the exchange agent against certain liabilitiesto pay fees, costs and expenses including certain liabilities underrelated thereto. The availability of the U.S. federal securities laws. Salesforce will reimburse brokers, dealers, commercial banks and trust companies and other nominees, upon request, for customary clerical and mailing expenses incurred by them in forwarding offering materials to their customers. Except as set forth above, neither Salesforce norterm loan facility is conditioned on the Offeror will pay any fees or commissions to any broker, dealer or other person for soliciting tendersconsummation of Tableau shares pursuant to the offer.
Accounting Treatment
In accordance with U.S. generally accepted accounting principles, Salesforce will account for the acquisition of shares throughSlack in accordance with the offer andterms of the merger underagreement (subject to certain exceptions and qualifications) and certain other conditions.
Salesforce’s obligation to complete the acquisition methodmergers is not conditioned upon the receipt of accounting for business combinations.any financing. Stock Exchange Listing
Salesforce shares are listed on the NYSE under the symbol “CRM.” Salesforce intends to submit a supplemental listing application to list on the NYSE the Salesforce shares that Salesforce will issue in the offer and merger as partTax Treatment of the transaction consideration. Such listingMergers
The mergers, taken together, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to the completion of the offer. Resalemergers that each of Salesforce Common Stock
All Salesforce shares received by Tableau stockholdersand Slack receives an opinion from its respective counsel dated as part of the transaction considerationclosing date to the effect that the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In addition, in connection with the filing of the registration statement of which this proxy statement/prospectus is a part, each of Wachtell, Lipton, Rosen & Katz and Latham & Watkins LLP has delivered an opinion to Salesforce and Slack, respectively, to the same effect as the opinions described in the offer andpreceding sentence. Each of the mergerforegoing opinions of counsel is or will be freely tradable for purposesbased on, among other things, certain factual representations made by Salesforce
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and Slack and certain assumptions, all of which must be consistent with the Securities Act, except for Salesforce shares received by any person who is deemed an “affiliate”state of Salesforcefacts existing at the time of the closingmergers. If any of the merger. Salesforce shares held by an affiliate of Salesforcethese representations and assumptions are, or become, inaccurate or incomplete, such opinions may be resoldinvalid, and the conclusions reached therein could be jeopardized. An opinion of counsel represents counsel’s best legal judgment and is not binding on the IRS or otherwise transferred without registration in compliancethe courts, which may not agree with the volume limitations, manner of sale requirements, notice requirements and other requirements under Rule 144 or as otherwise permitted under the Securities Act. This document does not cover resales of Salesforce shares received upon completion of the offer or the merger by any person, and no person is authorized to make any use of this documentconclusions set forth in connection with any such resale.opinion. 98
Exchange Agent Contact Information
The contact information for the exchange agent for the offer and the merger is:
| | | If delivering by mail:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
Phone: Toll-free (877) 248-6417
(718) 921-8317
Fax (718) 234-5001
| | If delivering by hand, express mail, courier
or any other expedited service:
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219
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THE MERGER AGREEMENT The following summary describes certain material provisions of the merger agreement entered into by Salesforce, the OfferorMerger Sub I, Merger Sub II and Tableau,Slack, a copy of which is attached hereto as Annex A.A and is incorporated by reference herein in its entirety. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to Tableau stockholders, and Tableau stockholdersyou. You are encouraged to read the merger agreement carefully and in its entirety.entirety because it is the legal document that governs the mergers. The description of the merger agreement in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the complete text of the merger agreement. The legal rights and obligations of the parties are governed by the specific language of the merger agreement and not this summary. The Mergers The Offermerger agreement provides for two mergers: (a) Merger Sub I will be merged with and into Slack, with Slack continuing as the surviving corporation in the first merger and as a wholly owned subsidiary of Salesforce and (b) immediately following the first merger, Slack, as the surviving corporation in the first merger, will be merged with and into either: (i) if a revised structure notice (as defined below) has not been delivered by Salesforce before the closing, Merger Sub II, with Merger Sub II continuing as a wholly owned subsidiary of Salesforce, or (ii) if a revised structure notice has been delivered by Salesforce before the closing, Salesforce, with Salesforce surviving the second merger. Pursuant to the merger agreement, Salesforce may elect the alternative transaction structure (as defined below) upon written notice to Slack (which we refer to as a “revised structure notice”) in the event that 10 business days before the closing, Salesforce and the trustee under the convertible notes indenture have not each executed a supplemental indenture to the convertible notes indenture amending the terms thereof to permit the consummation of the second merger with Merger Sub II at the second effective time without giving rise to a breach of, or any default under, any provision of the convertible notes indenture. Upon delivery of the revised structure notice, the structure of the second merger will be modified to consist of Slack, as the surviving company in the first merger, merging with and into Salesforce, with Salesforce continuing as the surviving company. Completion and Effectiveness of the Mergers Under the merger agreement, the closing of the mergers will take place virtually by exchange of documents and signatures at 4:00 a.m., Pacific Time, on the fifth business day after the satisfaction or, to the extent permitted by applicable law, waiver of the last of the conditions (other than any such conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions at the closing), unless another date or place is agreed to in writing by Salesforce and Slack. The Offerormerger agreement provides that in the event the closing would occur prior to March 15, 2021, Salesforce may elect to delay the closing, upon written notice delivered to Slack no later than three business days prior to the date on which the closing would have otherwise occurred and subject to certain conditions, until 4:00 a.m., Pacific Time, on March 15, 2021 (or on a date after the original closing date and prior to March 15, 2021, if Salesforce elects such other date by written notice delivered to Slack no later than two business days prior to such date). For more information on the conditions to the mergers, please see the section entitled “—Conditions to the Mergers.” We refer to the date on which the completion of the mergers occurs as the “closing date.” On the closing date, the parties will cause a certificate of merger with respect to the first merger and a certificate of merger with respect to the second merger to be duly executed and filed with the Secretary of State of the State of Delaware as provided under the DGCL and the Delaware Limited Liability Company Act (which we refer to as the “DLLCA”), as applicable, and make any other filings, recordings or publications required to be made under the DGCL and DLLCA, as applicable, in connection with the mergers. The first merger will become effective at such time as the first certificate of merger is offeringduly filed with the Secretary of State of the State of -99-
Delaware or at such other time as specified in the first certificate of merger. At the first effective time, all of the property, rights, privileges, immunities, powers and franchises of Slack and Merger Sub I will vest in Slack as the first surviving corporation, and all of the liabilities, obligations and duties of Slack and Merger Sub I will become liabilities, obligations and duties of Slack as the first surviving corporation. The second merger will become effective at such time as the second certificate of merger is duly filed with the Secretary of State of the State of Delaware or at such other time as specified in the second certificate of merger. We refer to exchange for the time at which such second merger becomes effective as the “second effective time.” At the second effective time, all of the property, rights, privileges, immunities, powers and franchises of Slack and Merger Sub II or Salesforce, as applicable, will vest in Merger Sub II or Salesforce, as applicable, as the surviving company, and all of the liabilities, obligations and duties of Slack and Merger Sub II or Salesforce, as applicable, will become liabilities, obligations and duties of Merger Sub II or Salesforce, as applicable, as the surviving company. Merger Consideration At the first effective time, by virtue of the first merger and without any action on the part of the holder thereof: each outstanding share of Tableau Class ASlack common stock issued and Tableau Class Boutstanding immediately prior to the first effective time (other than any shares of Slack common stock validly tendered,as to which dissenters’ rights have been properly perfected (which we refer to as “dissenting shares”), cancelled shares (as defined below) or shares covered by Slack restricted share awards) will be automatically cancelled and not validly withdrawn, inconverted into the offer, 1.103right to receive the merger consideration, consisting of (a) 0.0776 shares of Salesforce common stock, with cash in lieu of any fractional shares of Salesforce common stock, and (b) the right to receive $26.79 in cash, without interestinterest; each share of Slack common stock issued and less any applicable withholding taxes. Each of Salesforce and the Offeror shall use its reasonable best efforts to consummate the offer. The Offeror’s obligation to accept for exchange (and Salesforce’s obligation to cause the Offeror to accept for exchange) Tableau shares validly tendered, and not validly withdrawn, pursuant to the offer is subject to the satisfaction or waiver by the Offeror of certain conditions, including the condition that,outstanding immediately prior to the expiration of the offer, there have been validly tendered and not validly withdrawn a number of Tableau sharesfirst effective time that upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered, and not validly withdrawn, will convert into shares of Tableau Class A common stock upon the consummation of the offer), together with Tableau shares thenis owned or held in treasury by Slack or is owned by Salesforce and the Offeror, ifor any would represent at least a majoritydirect or indirect wholly owned subsidiary of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offerSalesforce or Slack will be cancelled without any consideration delivered in exchange therefor (which we refer to as the “minimum tender condition”“cancelled shares”), as more fully described under “The Offer—Conditions of the Offer.”
Under the merger agreement, unless Salesforce receives the prior written consent of Tableau:
the Offeror must (and Salesforce shall cause the Offeror to) extend the offer for any period required by any law, or any rule, regulation, interpretation or position of the SEC, its staff or the NYSE applicable to the offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the offer or the offer documents or this registration statement on Form S-4;
in the event that any of the conditions to the offer (other than the minimum tender condition and the condition relating to the absence of a material adverse effect on Tableau and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) have not been satisfied or waived as of any then-scheduled expiration of the offer, the Offeror must (and Salesforce shall cause the Offeror to) extend the offer for successive extension periods of up to 10 business days each (or for such longer period as may be agreed by Salesforce and Tableau); and
if aseach share of any then-scheduled expirationcommon stock of the offer each condition to the offer (other than the minimum tender condition,Merger Sub I issued and other than any such conditions that by their nature are to be satisfied at the expiration of the offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the offer to occur at such time)) has been satisfied or waived and the minimum tender condition has not been satisfied, the Offeror may, and at the request in writing of Tableau, must (and Salesforce shall cause the Offeror to), extend the offer for successive extension periods of up to 10 business days each (with the length of each such period being determined in good faith by Salesforce) (or for such longer period as may be agreed by Salesforce and Tableau in writing); however, in no event will the Offeror be required to (and Salesforce will not be required to cause Offeror to) extend the expiration of the offer (i) if (x) the minimum tender condition is not satisfied by a number of shares that is equal to or less than the aggregate number of shares held or beneficially owned by any of
| Christian Chabot, Christopher Stolte or Patrick Hanrahan (collectively, the “founders”) that have not been tendered, or have been tendered but validly withdrawn, in the offer as of such time and (y) as of such time the founders whose untendered shares of Tableau common stock are necessary to satisfy the minimum tender condition are not using good faith and diligent efforts to tender the necessary shares of Tableau common stock into the offer; or (ii) for more than 20 business days in the aggregate.
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The Offeror may not terminate or withdraw the offeroutstanding immediately prior to the then-scheduled expirationfirst effective time will automatically be converted into and become one validly issued, fully paid and nonassessable common share, par value $0.0001, of the offer unless the merger agreement is validly terminated in accordance with its terms, in which case the Offeror will terminate the offer promptly (but in no event more than one business day) after such termination. Among other circumstances, the merger agreement may be terminated by either Salesforce or Tableau if the offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Salesforce or the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer, or if the acceptance for exchange of Tableau shares tendered in the offer has not occurred on or before October 9, 2019 (subject to extension to January 9, 2020 in certain circumstances described under “—Termination of the Merger Agreement”), whichsurviving corporation (which we refer to as the “outside date.” See “—Termination of“surviving corporation stock”).
Notwithstanding the Merger Agreement.” For a more complete description of the offer, see “The Offer.”
The Merger
The merger agreement provides that,above, if the offerpercentage of aggregate Salesforce common stock consideration, disregarding any factional shares in respect of which cash is completed,paid, to be delivered to the parties will effect the mergerholders of the Offeror with and into Tableau, with Tableau continuing as the surviving corporation in the merger, and the former Tableau stockholders will not have any direct equity ownership interest in the surviving corporation. If the offerSlack common stock is completed, such that Salesforce accordingly owns at least a majorityless than 41% of the aggregate voting powermerger consideration for U.S. federal income tax purposes, then the amount of Tableau shares,cash otherwise payable to the merger will be governed by Section 251(h)holders of the General Corporation Law of the DGCL, and accordingly no Tableau stockholder vote will be required to complete the merger.
Completion and Effectiveness of the Merger
UnderSlack common stock under the merger agreement (other than to holders of dissenting shares), equal to the closingamount of the merger must occur as promptly as practicable,cash that would be necessary to cause such percentage to equal 41%, shall instead by payable to such holders in an equivalent amount of Salesforce common stock (with each share of Salesforce common stock valued for purposes of this paragraph at $260.50).
All such shares of Slack common stock, when so converted, will cease to be outstanding and in any case no later thanwill automatically be cancelled and cease to exist. Each holder of a share of Slack common stock that was outstanding immediately prior to the first business day after the acceptance of tendered Tableaueffective time (excluding any dissenting shares, in the offer and the satisfaction of the other conditionscancelled shares or shares covered by Slack restricted share awards) will cease to the merger, unless the parties agree otherwise in writing. See “—Conditions to the Merger.” The merger will become effective upon the filing of a certificate of mergerhave any rights with the Secretary of State of the State of Delaware or on such other date and time as agreed to by Salesforce and Tableau and specified in the certificate of merger. Transaction Consideration Payable Pursuant to the Merger
In the merger,respect thereto, except as provided below, each outstanding Tableau share that was not acquired by the Offeror in the offer will be converted into the right to receive the transaction consideration—merger consideration to which such holder is entitled by virtue of the first merger and any dividends or other distributions payable to such holder with respect to such shares upon such surrender.
At the second effective time, by virtue of the second merger and without any action on the part of the holder thereof, (a) each share of surviving corporation stock issued and outstanding immediately prior to the second effective time will be automatically cancelled and (b) each limited liability company interest of Merger Sub II -100-
issued and outstanding prior to the second effective time will remain outstanding as a limited liability company interest of the surviving company, except that, is, 1.103 sharesin the event Salesforce has delivered the revised structure notice to Slack, each share of Salesforce common stock with cash in lieu of any fractional shares of Salesforce common stock, without interestissued and less any applicable withholding taxes. Inoutstanding immediately prior to the merger, Tableau shares that are owned or held in treasury by Tableau or owned by Salesforce or the Offeror will be cancelled without any consideration being delivered. In the merger, Tableau shares that are owned by any wholly owned subsidiary of Salesforce (other than the Offeror) or of Tableau will be converted into sharessecond effective time shall remain outstanding as a share of common stock of the surviving corporation in accordance with the merger agreement.company.
Fractional Shares Salesforce will not issue fractional shares of Salesforce common stock in the offer or thefirst merger. Instead, each holder of Tableau sharesSlack common stock who otherwise would be entitled to receive fractional shares of Salesforce common stock (after aggregating all shares of such holder) will be entitled to an amount in cash, without interest, equal to such fraction of a share of Salesforce common stock multiplied by the volume weighted average closing sale price of one share of Salesforce common stock as reported on the NYSE for the 10 consecutive trading days ending on the trading day immediately preceding the day the Offeror accepts for payment all Tableau shares tendered in the offer,$260.50, rounded to the nearest whole cent. Exchange of TableauSlack Common Stock Book-Entry Shares for the TransactionMerger Consideration Salesforce has retained American Stock Transfer andanticipates retaining Computershare Trust Company, LLCN.A., as the depositary and exchange agent for the offer and thefirst merger to handle the exchange of Tableau sharesSlack common stock for the transactionmerger consideration. All Tableau shares are held in electronic book-entry form. Book-Entry Shares
No holder of book-entry Tableau shares of Slack common stock will be required to deliver a certificate or letter of transmittal or surrender such book-entry Tableau shares of Slack common stock to the exchange agent to receive the transactionmerger consideration. In lieu thereof, each book-entry Tableau share of Slack common stock will automatically onupon the first effective time be entitled to receive, and Salesforce will cause the exchange agent to pay and deliver in exchange therefor as promptly as reasonably practicable after the first effective time (and in any event within five business days following the transactionfirst effective time), the merger consideration (including cash in lieu of any fractional shares of Salesforce common stock), and the payment of any dividends or other distributions, without interest, which prior to proper exchange of such Tableau shares of Slack common stock had become payable with respect to the shares of Salesforce common stock issuable as transactionmerger consideration in respect of such Tableau shares.shares of Slack common stock. No Interest No interest will be paid or will accrue on any portion of the transactionmerger consideration payable in respect of any TableauSlack share. Termination of Rights At the first effective time, the stock transfer books of Slack will be closed immediately, and there will be no further registration of transfers on the stock transfer books of Slack of the shares of Slack common stock that were outstanding immediately prior to the first effective time. After the first effective time, each share of the merger, each Tableau shareSlack common stock that has not been surrendered will represent only the right to receive, upon such surrender, the transactionmerger consideration to which such holder is entitled by virtue of the first merger and any dividends or other distributions payable to such holder with respect to such shares upon such surrender. ConditionsTreatment of Slack Equity Awards
Consideration for Slack Options in the Mergers—Generally At the first effective time, each Slack option that is held by an individual who is not an employee of Slack and that is outstanding and unexercised immediately prior to the Mergerfirst effective time will be cancelled and such holders will be entitled to receive the merger consideration in respect of the number of shares of Slack common stock covered by the Slack option, less a number of shares having a value equal to the total exercise price applicable to such option. The obligations
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At the first effective time, all other Slack options that are outstanding and unexercised immediately prior to the first effective time of Slack will be assumed and automatically converted into an adjusted option to purchase a number of shares of Salesforce common stock determined by multiplying the Offerornumber of shares of Slack common stock equal to the number of shares covered by the Slack option by the option/RSU conversion ratio, at a per share exercise price equal to the per share exercise price of the Slack option divided by the option/RSU conversion ratio. The adjusted option will otherwise be subject to the same terms and Tableauconditions as were applicable to effectthe corresponding Slack option prior to the first effective time, including vesting terms. Consideration for Slack Restricted Stock Units and Slack Restricted Share Awards in the Mergers—Generally At the first effective time, each Slack RSU award and each Slack restricted share award that is outstanding immediately prior to the first effective time held by a non-employee director of Slack will vest as of the first effective time and will be cancelled and converted into the right to receive the merger consideration in respect of each share of Slack common stock subject to such Slack RSU award or Slack restricted share award. At the first effective time, each Slack RSU award (other than any such award held by any current or former non-employee director) will be assumed and converted into an adjusted RSU award with respect to a number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Slack common stock subject to the Slack RSU award by the option/RSU conversion ratio. Each adjusted RSU award will be subject to the satisfactionsame terms and conditions as were applicable to the corresponding Slack RSU award prior to the first effective time, including vesting terms. At the first effective time, each Slack restricted share award (other than any such award held by any current or former non-employee director) that is outstanding immediately prior to the first effective time will be assumed and converted into an adjusted restricted share award with respect to a number of eachshares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Slack common stock subject to the Slack restricted share award by 0.1804; provided that the holder of a Slack restricted share award is entitled to cash in an amount equal to such fractional share multiplied by $260.50, rounded to the nearest cent. Each adjusted restricted share award will be subject to the same terms and conditions as were applicable to the corresponding Slack restricted share award prior to the first effective time, including vesting terms except that any applicable repurchase price per share of Salesforce common stock (rounded up to the nearest whole cent) will be determined by dividing the per share repurchase price of the Slack restricted share award by the restricted stock conversion ratio of 0.1804. Slack Employee Stock Purchase Plan Pursuant to the merger agreement, as soon as practicable following conditions,the date of the merger agreement, Slack shall take all actions with respect to the ESPP that are necessary to provide that: (a) with respect to the current ESPP offering period that ends on April 9, 2021, no Slack employee who is not a participant in the ESPP as of the date of the merger agreement may become a participant in the ESPP and no current participant may increase the percentage amount of such participant’s payroll deduction election from that in effect on the date of the merger agreement for the current ESPP offering period; (b) subject to the consummation of the mergers, the ESPP shall terminate effective immediately prior to the first effective time; (c) if the first effective time occurs after April 9, 2021 (the end of the current ESPP offering period), then the ESPP shall be suspended and no new offering period shall be commenced under the ESPP prior to the termination of the merger agreement; and (d) if the first effective time occurs before April 9, 2021 (the end of the current ESPP offering period), then the last day of the current ESPP offering period shall be accelerated to a date three business days prior to the closing date of the mergers. Registration of Salesforce Common Stock Pursuant to the merger agreement, at or as soon as reasonably practicable after the first effective time, Salesforce will file a registration statement with the SEC on Form S-8, or any and all of which may be waived in whole or in part by Salesforce, the Offeror and Tableau, as the case may be,successor form, to the extent permitted by applicable law:such | • | | Completion of Offer—The Offeror has accepted for payment all of the Tableau shares validly tendered in the offer and not validly withdrawn pursuant to the offer.
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-102- | • | | No Legal Prohibition—No governmental entity of competent jurisdiction has (i) enacted, issued or promulgated any law that is in effect as of immediately prior to the effective time or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the effective time, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the merger.
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form is available, relating to the shares of Salesforce common stock issuable with respect to the adjusted options, adjusted restricted share awards and adjusted RSU awards. Salesforce will use commercially reasonable efforts to maintain the effectiveness of such registration statement or statements for as long as any adjusted options, adjusted restricted share awards and adjusted RSU awards remain outstanding. Representations and Warranties The merger agreement contains customary representations and warranties of the parties. These include representations and warranties of TableauSlack with respect to: organization and qualification; corporate authority relative to the merger agreement; requisite stockholder approval; due execution, delivery and enforceability of the merger agreement; required consents and approvals; internal controls and procedures; the absence of undisclosed liabilities; the absence of certain changes or events; compliance with laws and permits; litigation;litigation, orders;
privacy and data protection; real property;property, assets; customers; suppliers; resellers;customers, suppliers, resellers, government entities;
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related party transactions; and The merger agreement also contains customary representations and warranties of Salesforce, Merger Sub I and the Offeror,Merger Sub II, including with respect to: organization and qualification; corporate authority relative to the merger agreement; due execution, delivery and enforceability of the merger agreement; required consents and approvals; internal controls and procedures; the absence of undisclosed liabilities; absence of changes or events; compliance with laws and permits; litigation;litigation, orders;
information supplied for SEC filings; sufficient funds and valid issuance of Salesforce common stock in the offer and the merger; no TableauSlack common stock ownership; activity of the Offeror;Merger Sub I and Merger Sub II; and Certain representations and warranties contained in the merger agreement are qualified by “material adverse effect,” as described below. The representations and warranties contained in the merger agreement will expire at the first effective time of the merger.time. The representations, warranties and covenants made by TableauSlack in the merger agreement are qualified by information contained in Tableau’sSlack’s confidential disclosure letter delivered to Salesforce in connection with the execution of the merger agreement and by filings that TableauSlack has made with the SEC since JanuaryJune 3, 2019 and publicly available before December 1, 2017 and prior to the2020 (the date of the merger agreement.agreement). The representations, warranties and covenants made by Salesforce, Merger Sub I and the OfferorMerger Sub II in the merger agreement are qualified by information contained in Salesforce’s confidential disclosure letter delivered to TableauSlack in connection with the execution of the merger agreement and by filings that Salesforce has made with the SEC since JanuaryFebruary 1, 20172019 and prior to thepublicly available before December 1, 2020 (the date of the merger agreement.agreement). The representations, warranties and covenants of each party in the merger agreement were made only for the purposes of, and were and are solely for the benefit of the parties to, the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosure letters made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ -104-
from those applicable to holders of TableauSlack common stock. Accordingly, the representations and warranties may not describe the actual state of affairs as of theDecember 1, 2020 (the date of the merger agreementagreement), or at any other time, and holders of TableauSlack common stock should not rely on them as statements of fact. These confidential disclosure letters contain information that modifies, qualifies and creates exceptions to the representations and warranties and certain covenants set forth in the merger agreement. Holders of TableauSlack common stock are not third-party beneficiaries of these representations, warranties and covenants under the merger agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of TableauSlack or any of its affiliates or of Salesforce or any of its affiliates. Material Adverse Effect A “material adverse effect” with respect to Salesforce or Tableau,Slack means any change, effect, development, circumstance, condition, state of facts, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations of such party and its subsidiaries, taken as a whole, except that no such change, effect, development, circumstance, condition, state of facts, event or occurrence to the extent resulting or arising from any of the following will be deemed to constitute a material adverse effect or will be taken into account when determining whether a material adverse effect exists or has occurred: | | (a) | any changes in U.S., regional, global or international economic conditions, including any changes affecting financial, credit, foreign exchange or capital market conditions; |
| | (b) | any changes in conditions in any industry or industries in which such party and its subsidiaries operate;the business collaboration technology industry; |
| | (c) | any changes in political, geopolitical, regulatory or legislative conditions in the United States or any other country or region of the world; |
| | (d) | any changes after theDecember 1, 2020 (the date of the merger agreementagreement) in GAAP or the interpretation thereof; |
| | (e) | any changes after theDecember 1, 2020 (the date of the merger agreementagreement) in applicable law or the interpretation thereof; |
| | (f) | any failure by such party to meet any internal or published projections, estimates or expectations of such party’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by such party to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a “material adverse effect” may be taken into account); |
| | (g) | any acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, natural disasters, epidemics or pandemics (including the COVID-19 pandemic) or other force majeure events, including any material worsening of such conditions threatened or existing as of theDecember 1, 2020 (the date of the merger agreement;agreement); |
| | (h) | the execution and delivery of the merger agreement, the identity of Salesforce, TableauSlack or any of their subsidiaries, as applicable, the pendency or consummation of the merger agreement, the transactions contemplated by the merger agreement, including the effect thereof on the relationships with current or prospective customers, suppliers, distributors, partners, financing sources, employees or sales representatives, or the public announcement of the merger agreement or the transactions contemplated by the merger agreement, including any litigation arising out of or relating to the merger agreement or the transactions contemplated by the merger agreement, in each case, only to the extent resulting from the execution and delivery of the merger agreement, the identity of Salesforce, TableauSlack or any of their subsidiaries, as applicable, the pendency or consummation of the merger agreement, the transactions contemplated by the merger agreement, or the public announcement of the merger agreement or the |
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| transactions contemplated by the merger agreement, as applicable (except that this clause (h) will not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address, as applicable, the consequences resulting from the execution and delivery of the merger agreement, the pendency or consummation of the transactions contemplated by the merger agreement or to address the consequences of litigation)agreement); and |
| | (i) | any action or failure to take any action which action or failure to act is requested in writing by the other party or otherwise expressly required by the terms of the merger agreement (other than pursuant to Tableau’sSlack’s covenant to use reasonable best efforts to conduct its business in all material respects in the ordinary course of business until the earlier of the first effective time of the merger or the date (if any) the merger agreement is terminated); |
provided that, with respect to the exceptions in clauses (a), (b), (c), (d), (e) and (g), if such change, effect, development, circumstance, condition, state of facts, event or occurrence has had a disproportionate adverse effect on such party relative to other companies operating in the industry or industries in which such party operates, then only the incremental disproportionate adverse effect of such change, effect, development, circumstance, condition, state of facts, event or occurrence will be taken into account for the purpose of determining whether a “material adverse effect” exists or has occurred. No Solicitation of Other Offers by Tableau
Under the terms of the merger agreement, subject to certain exceptions described below, Tableau has agreed that, from the date of the merger agreement until the earlier of the acceptance time (as defined below) or the date (if any) on which the merger agreement is terminated, Tableau will not and will cause its subsidiaries, and its and
their respective officers and directors not to, and Tableau will use reasonable best efforts to cause its and its subsidiaries’ other representatives to not, directly or indirectly:
| (a) | solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer, which constitutes or would be reasonably expected to lead to an acquisition proposal (as defined below);
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| (b) | participate in any negotiations regarding, or furnish to any person any non-public information relating to Tableau or any of its subsidiaries in connection with, an actual or potential acquisition proposal;
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| (c) | adopt, approve, endorse or recommend, or publicly propose to adopt, approve, endorse or recommend, any acquisition proposal;
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| (d) | withdraw, change, amend, modify or qualify, or otherwise propose to withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer, or resolve or agree to take any such action;
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| (e) | if an acquisition proposal has been publicly disclosed, fail to publicly recommend against any such acquisition proposal within 10 business days after the public disclosure of such acquisition proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, such rejection of such acquisition proposal) and reaffirm the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer within such 10 business day period (or, if earlier, by the second business day prior to the then-scheduled expiration of the offer);
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| (f) | fail to include the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer in the Schedule 14D-9;
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| (g) | approve, or authorize, or cause or permit Tableau or any of its subsidiaries to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or document with respect to the exceptions in clauses (a), (b), (c), (d), (e) and (g), if such change, effect, development, circumstance, condition, state of facts, event or anyoccurrence has had a disproportionate adverse effect on such party relative to other agreementcompanies operating in the business collaboration technology industry, then only the incremental disproportionate adverse effect of such change, effect, development, circumstance, condition, state of facts, event or commitment providingoccurrence will be taken into account for any acquisition proposal (other than certain confidentiality agreements);the purpose of determining whether a “material adverse effect” exists or has occurred.
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| (h) | call or convene a meeting of Tableau stockholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or
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| (i) | resolve or agree to do any of the foregoing.
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We refer to the actions set forth in clauses (c), (d), (e), (f) and (i) (to the extent clause (i) is related to the foregoing clauses (c), (d) or (e)) above as a “change of recommendation.”
In addition, under the merger agreement, Tableau has agreed that:
it will and will cause its subsidiaries, and its and their respective officers and directors to, and Tableau will use reasonable best efforts to cause its and its subsidiaries’ other representatives to, immediately cease any and all existing solicitation, discussions or negotiations with any persons, or provision of any non-public information to any persons, with respect to any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal;
it will promptly request in writing that each person that previously executed a confidentiality agreement with Tableau in connection with its consideration of an acquisition proposal or a potential acquisition proposal promptly destroy or return to Tableau all non-public information furnished by Tableau or any of its representatives to such person or any of its representatives in accordance with the terms of such confidentiality agreement; and
it will terminate access to any physical or electronic data rooms relating to a possible acquisition proposal by such person and its representatives.
Under the merger agreement, Tableau must enforce, and not waive, terminate or modify without Salesforce’s prior written consent, any confidentiality, standstill or similar provision in any confidentiality, standstill or other agreement; provided that, if the Tableau board of directors determines in good faith after consultation with Tableau’s outside legal counsel that the failure to waive a particular standstill provision would be reasonably likely to violate the directors’ fiduciary duties under applicable law, Tableau may, with prior written notice to Salesforce, waive such standstill solely to the extent necessary to permit the applicable person (if it has not been solicited in violation of the merger agreement) to make, on a confidential basis to the Tableau board of directors, an acquisition proposal, conditioned upon such person agreeing to disclosure of such acquisition proposal to Salesforce, in each case as contemplated by the merger agreement.
Notwithstanding the prohibitions described above, if Tableau receives, prior to the acceptance time, an unsolicited bona fide written acquisition proposal that did not result from a breach of Tableau’s non-solicitation obligations, Tableau, its subsidiaries and its representatives are permitted to contact the person or any of its representatives who has made such acquisition proposal to clarify the terms and conditions of such acquisition proposal so that Tableau may inform itself about such acquisition proposal. Further, Tableau, its subsidiaries and its representatives are permitted to furnish non-public information to such person and engage in discussions or negotiations with such person with respect to the acquisition proposal, as long as:
the Tableau board of directors determines in good faith, after consulting with Tableau’s outside legal counsel and financial advisors, that such proposal constitutes, or would reasonably be expected to result in, a superior proposal;
the Tableau board of directors determines in good faith, after consulting with Tableau’s outside legal counsel, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law; and
(x) prior to providing any such non-public information, the person making the acquisition proposal enters into a confidentiality agreement that contains terms that are no less favorable in the aggregate to Tableau than those contained in the confidentiality agreement between Salesforce and Tableau (provided that the confidentiality agreement is not required to include a standstill provision) and that does not in any way restrict Tableau or its representatives from complying with its disclosure obligations under the merger agreement, and (y) Tableau also provides Salesforce, prior to or substantially concurrently with the time such information is provided or made available to such person, any nonpublic information furnished to such other person that was not previously furnished to Salesforce.
Under the merger agreement, Tableau will notify Salesforce promptly (and in any event within 24 hours) of Tableau’s or any of Tableau’s controlled affiliates’ or its or their respective representatives’ receipt of any acquisition proposal, any proposals or inquiries that would reasonably be expected to lead to an acquisition proposal, or any inquiry or request for non-public information relating to Tableau or any of its subsidiaries by any person who has made or would reasonably be expected to make any acquisition proposal. The notice must include the identity of the person making the acquisition proposal, inquiry or request, and the material terms and conditions of any such proposal or offer or the nature of the information requested pursuant to any such inquiry or request, including unredacted copies of all proposals or offers (including any proposed agreements received by Tableau relating to such acquisition proposal) or, if such acquisition proposal is not in writing, a reasonably detailed written description of the material terms and conditions thereof. Tableau will keep Salesforce reasonably informed on a prompt and timely basis of the status and material terms (including any amendments or proposed amendments to such material terms) of any such acquisition proposal or potential acquisition proposal, and as to the nature of any information requested of Tableau with respect thereto and provide to Salesforce copies of all proposals, offers and proposed agreements relating to an acquisition proposal received by Tableau or, if such
information or communication is not in writing, a reasonably detailed written description of the material contents thereof. Tableau also must promptly provide (and in any event within 24 hours) Salesforce with any material non-public information concerning Tableau provided to any other person in connection with any acquisition proposal that was not previously provided to Salesforce. Without limiting the foregoing, Tableau will promptly (and in any event within 24 hours after such determination) inform Salesforce in writing if Tableau determines to begin providing information or to engage in discussions or negotiations concerning an acquisition proposal to the extent otherwise permitted by the merger agreement.
The “acceptance time” for purposes of the merger agreement is the time that the Offeror accepts for payment all Tableau shares that are validly tendered and not validly withdrawn pursuant to the offer promptly after the expiration of the offer (as it may be extended pursuant to the terms of the merger agreement) or, at Salesforce’s election, concurrently with the expiration of the offer if all conditions to the offer have been satisfied or waived in accordance with the merger agreement.
An “acquisition proposal” for purposes of the merger agreement means any offer, proposal or indication of interest from any person or group (as defined in Section 13(d) of the Exchange Act), other than a proposal or offer by Salesforce or a subsidiary of Salesforce, at any time relating to any transaction or series of related transactions involving:
any acquisition or purchase by any person, directly or indirectly, of more than 15% of any class of outstanding Tableau voting or equity securities (whether by voting power or number of shares);
any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any person or group beneficially owning more than 15% of any class of outstanding Tableau voting or equity securities (whether by voting power or number of shares);
any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction, in each case involving Tableau and any other person or group, pursuant to which the Tableau stockholders immediately prior to such transaction hold less than 85% of the equity interests in the surviving, resulting or ultimate parent entity of such transaction (whether by voting power or number of shares); or
any sale, lease, exchange, transfer or other disposition to any person or group of more than 15% of the consolidated assets of Tableau and its subsidiaries (measured by fair market value).
A “superior proposal” for purposes of the merger agreement means a bona fide, written acquisition proposal by a third party which the Tableau board of directors determines in good faith (after consultation with Tableau’s outside legal counsel and financial advisors) to be more favorable to Tableau stockholders from a financial point of view than the offer and the merger, taking into account all relevant factors, including all the terms and conditions of such proposal or offer (including the transaction consideration, conditionality, timing, certainty of financing or regulatory approvals and likelihood of consummation) and the merger agreement, as well as any changes to the terms of the merger agreement proposed by Salesforce in response to any acquisition proposal. When determining whether an offer constitutes a superior proposal, references in definition of the term “acquisition proposal” to “15%” or “85%” will be replaced with references to “80%” and “20%,” respectively.
Change of Recommendation; Match Rights
At any time prior to the acceptance time:
the Tableau board of directors may make a change of recommendation in response to an intervening event (as defined below) if the Tableau board of directors has determined in good faith, after consultation with Tableau’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law; or
the Tableau board of directors may make a change of recommendation and cause Tableau to terminate the merger agreement in order to enter into a definitive agreement providing for an unsolicited
| acquisition proposal that did not result from a breach of Tableau’s non-solicitation obligations (subject to payment by Tableau to Salesforce of the termination fee described under “—Termination Fee and Expenses”) which the Tableau board of directors has determined in good faith after consultation with Tableau’s outside legal counsel and financial advisors is a superior proposal, but only if the Tableau board of directors has determined in good faith after consultation with Tableau’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law.
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Prior to making a change of recommendation for any reason set forth above, Tableau must provide Salesforce with four business days’ prior written notice advising Salesforce that the Tableau board of directors intends to make a change of recommendation. The notice must specify in reasonable detail the reasons for such change of recommendation due to an intervening event, or the material terms and conditions of the acquisition proposal (including a copy of any proposed definitive agreement) for any change of recommendation due to a superior proposal. In each case, Tableau must procure that its representatives negotiate in good faith (solely to the extent Salesforce desires to negotiate) any proposal by Salesforce to amend the merger agreement in a manner that would eliminate the need for the Tableau board of directors to make such change of recommendation, and the Tableau board of directors must make the required determination regarding its fiduciary duties again at the end of such four business day negotiation period (after in good faith taking into account the amendments to the merger agreement proposed by Salesforce, if any). With respect to any change of recommendation in response to a superior proposal, if there is any material amendment, revision or change to the terms of the then-existing superior proposal (including any revision to the amount, form or mix of consideration proposed to be received by Tableau stockholders as a result of such superior proposal), Tableau must notify Salesforce of each such amendment, revision or change and the applicable four day business period will be extended until at least three business days after the time that Salesforce receives notification of such revision.
An “intervening event” for purposes of the merger agreement means any change, effect, development, circumstance, condition, state of facts, event or occurrence that is material to Tableau and its subsidiaries, taken as a whole, and was not known by or reasonably foreseeable to Tableau or the Tableau board of directors as of or prior to the date of the merger agreement, except that in no event will the following events, changes or developments constitute an “intervening event”: (a) the receipt, existence or terms of an acquisition proposal or any matter relating thereto or consequence thereof, (b) changes in the market price or trading volume of the Tableau Class A common stock, the Salesforce common stock or any other securities of Tableau, Salesforce or their respective subsidiaries, or any change in credit rating or the fact that Tableau meets or exceeds (or that Salesforce fails to meet or exceed) internal or published estimates, projections, forecasts or predictions for any period, (c) changes in general economic, political or financial conditions or markets (including changes in interest rates, exchange rates, stock, bond or debt prices) or (d) changes in GAAP, other applicable accounting rules or applicable law or, in any such case, changes in the interpretation thereof.
Nothing in the merger agreement prohibits Tableau or the Tableau board of directors from (a) disclosing to Tableau stockholders a position contemplated by Item 1012(a) of Regulation M-A or Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, (b) making any “stop, look and listen” communication to Tableau stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act, or (c) making any legally required disclosure to Tableau stockholders with regard to an acquisition proposal, in each case so long as any such disclosure (x) includes an express reaffirmation of the Tableau board of directors’ recommendation that Tableau stockholders accept the offer and tender their Tableau shares into the offer, without any amendment, withdrawal, alteration, modification or qualification thereof and (y) does not include any statement that constitutes, and does not otherwise constitute, a change of recommendation under the merger agreement.
Conduct of Business Before Completion of the MergerMergers Restrictions on Tableau’sSlack’s Operations The merger agreement provides for certain restrictions on Tableau’sSlack’s and its subsidiaries’ activities until the earlier of the first effective time of the merger or the date (if any) the merger agreement is terminated. In general, except as specifically permitted, set forth in Tableau’sSlack’s confidential disclosure letter, or required by the merger agreement, as required by applicable law or as consented to in writing by Salesforce, subject to specified exceptions set forth in the merger agreement, TableauSlack and each of its subsidiaries is required to use reasonable best efforts to conduct its business in all material respects in the ordinary course of business including by (i) preservingand use reasonable best efforts to (a) preserve intact its and their present business organizations, goodwill and ongoing business, (ii) keeping(b) keep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preserving(c) preserve its and their relationships with customers, suppliers, vendors, resellers, licensors, licensees, governmental entities, employees and other persons with whom it and they have material business relations. In addition, except as specifically permitted or required by the merger agreement, as required by applicable law or as consented to in writing by Salesforce (which, in certain specified cases, may not be unreasonably withheld, conditioned or delayed), subject to specified exceptions set forth in the merger agreement, TableauSlack must not and must not permit anycause each of its subsidiaries not to, directly or indirectly: amend, modify, waive, rescind, change or otherwise restate Tableau’sSlack’s or any of its subsidiaries’ certificate of incorporation, bylaws or equivalent organizational documents; authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of TableauSlack or any of its subsidiaries) (other than dividends or distributions made by any wholly owned subsidiary of TableauSlack to TableauSlack or any wholly owned subsidiary of Tableau)Slack); enter into any agreement andor arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or securities; split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests, except for (a) the acceptance of shares of TableauSlack common stock as payment of the exercise price of TableauSlack options or for withholding taxes in respect of TableauSlack equity awards or (b) any such transaction involving only wholly owned subsidiaries of Tableau;Slack; -106-
issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in TableauSlack or any of its subsidiaries or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units; ��
take any action to cause to be exercisable or vested any otherwise unexercisable or unvested TableauSlack equity award under any existing TableauSlack equity plan (except as otherwise provided by the express terms of any TableauSlack equity award), other than (a) issuances of TableauSlack common stock in respect of any exercise of TableauSlack options outstanding on the date of the merger agreement or the vesting or settlement of TableauSlack equity awards outstanding on the date of the merger agreement, in all cases in accordance with their respective terms as of the date of the merger agreement, (b) issuances of TableauSlack common stock in respect of any awards outstanding under the ESPP in respect of the current ESPP offering periods, (c) sales of shares of TableauSlack common stock pursuant to the exercise of TableauSlack options if necessary to effectuate an optionee direction upon exercise or pursuant to the settlement of TableauSlack equity awards in order to satisfy tax withholding obligations or (d) transactions solely between TableauSlack and its wholly owned subsidiaries or between such wholly owned subsidiaries; except as required by any TableauSlack benefit plan in existence as of the date of the merger agreement and set forth in Tableau’sSlack’s confidential disclosure letter, (a) increase the compensation or benefits payable or to become payable to any TableauSlack director, executive officer or employee; (b) grant to any TableauSlack director, executive officer or employee any increase in severance or termination pay; (c) pay or award, or commit to pay or award, any bonuses, retention or incentive compensation to any of Tableau’sSlack’s directors, executive officers or employees; (d) enter into any employment, severance or retention agreement (excluding offer letters that do not provide for severance or change in controlchange-in-control benefits) with any of Tableau’sSlack’s directors, executive officers or employees; (e) establish, adopt, enter into, amend or terminate any collective bargaining agreement or TableauSlack benefit plan, except for certain exceptions described in the merger agreement; (f) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any TableauSlack benefit plan; (g) terminate the employment of any TableauSlack employee at the level of senior vice president or above, other than for cause; (h) hire any new TableauSlack employees, except for non-officer employees at the level of vice president level andor below; or (i) provide any funding for any rabbi trust or similar arrangement; (j) enter into a contract or relationship with a professional employer organization; or (k) form or otherwise establish any employing entity in any country that does not currently have an employing entity; acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or publicly announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or a material portion of the assets of any person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations, except for (a) transactions solely between Tableau and its wholly owned subsidiaries or between such wholly owned subsidiaries, (b) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice or (c) capital expenditures in accordance with Tableau’s capital budget provided to Salesforce prior to the date of the merger agreement;
| • | | acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or assets of any person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations, except for (a) transactions solely between Slack and its wholly owned subsidiaries or between such wholly owned subsidiaries, (b) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice or (c) transactions involving an amount up to $50 million cash consideration in the aggregate, in each case, that (x) does not included any “earnout,” deferred or contingent payment obligations or any other future obligation to pay and (y) would not reasonably be expected to materially delay, impede or prevent the consummation of the transactions on or before the outside date (with such term as described under “—Termination of the Merger Agreement”); |
liquidate (completely or partially), dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization or reorganization between or among any of Tableau Slack and/or its subsidiaries), or adopt any plan or resolution providing for any of the foregoing; make any loans, advances or capital contributions to, or investments in, any other person, except for (a) loans solely among TableauSlack and its wholly owned subsidiaries or solely among Tableau’sSlack’s wholly owned subsidiaries or (b) advances for reimbursable employee expenses in the ordinary course of business; -107-
| subsidiaries, (b) advances for reimbursable employee expenses in the ordinary course of business consistent with past practice or (c) loans, advances, capital contributions or investments in entities not listed on a national securities exchange of up to $15 million cash consideration in the aggregate (so long as such loans, advances, capital contributions or investments are non-controlling minority interests of less than 10% of the total outstanding capital stock of such person and do not involve any board seat or other indicia of control); |
sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any lien (other than certain permitted liens), any of its material properties, rights or assets (including shares of Slack or its subsidiaries), except (a) dispositions of obsolete or worthless equipment, in the ordinary course of business consistent with past practice, (b) nonexclusive license or other nonexclusive grantslicenses of rights in or under any of Tableau’sSlack’s intellectual property or products entered into in the ordinary course of business consistent with past practice with customers and resellers, and (c) pursuant to transactions solely among TableauSlack and its wholly owned subsidiaries or solely among such wholly owned subsidiaries or (d) pursuant to certain agreements in effect prior to the execution of the merger agreement and set forth in Tableau’s confidential disclosure letter;subsidiaries; terminate or materially amend or modify any written policies or procedures with respect to the use or distribution by TableauSlack or any of its subsidiaries of any open source software; enter into or become bound by, or amend, modify, terminate or waive any contract related to the acquisition or disposition or grantinggrant of any license with respect to material intellectual property, other than amendments, modifications, terminations or waivers in the ordinary course of business consistent with past practice, or otherwise encumber any of Slack’s material intellectual property (including by the granting of any covenants, including any covenant not to sue or covenant not to assert), other than (a) nonexclusive licenses of Tableau’s(x) Slack’s intellectual property (other than patents on a stand-alone basis) or (y) Slack products, in each case entered into in the ordinary course of business consistent with past practice and (b) amendments and modifications, in each case, to existing exclusive, limited distribution rights for TableauSlack products made or entered into in the ordinary course of business consistent with past practice; (a) enter into certain specified types of material contracts or any other material contract outside of the ordinary course of business consistent with past practice, (b) materially modify, materially amend, extend or terminate any material contract (other than non-renewals occurring in the ordinary course of business),business consistent with past practice) any material contract, or, other than in the ordinary course of business consistent with past practice, waive, release or assign any material rights or claims thereunder, or (c) materially modify or amend or terminate, or waive or release or assign any material rights under, any material government bid or submit any new government contract bid that would have been a material government bid if submitted prior to the date of the merger agreement; except in accordance with Tableau’sSlack’s capital budget provided to Salesforce prior tobefore the date of the merger agreement, make any capital expenditures,expenditure, enter into agreements or arrangements providing for any capital expendituresexpenditure or otherwise commit to do so; commence, waive, release, assign, compromise or settle any claim, litigation, investigation or proceeding other than the compromise or settlement of any claim, litigation or proceeding that is not brought by governmental entities and that (a) is for an amount not to exceed, for any such compromise or settlement individually $1,000,000 or in the aggregate, $2,000,000, (b) does not impose any injunctive relief on TableauSlack or its subsidiaries and does not involve the admission of wrongdoing by Tableau,Slack, any of its subsidiaries or any of their respective officers or directors or otherwise establish a materially adverse precedent for similar settlements by Salesforce or any of its subsidiaries and (c) does not provide for the license of any intellectual property or the termination, modification or amendment of any license of TableauSlack intellectual property; make any change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable law; amend or modify in any material respect any privacy statement of TableauSlack or any of its subsidiaries; -108-
make, change or revoke any material tax election, adopt or change any tax accounting period or material method of tax accounting, amend any material tax return, file any material tax return that is materially inconsistent with a previously filed tax return of the same type for a prior taxable period (taking into account any amendments prior to the date hereof and other than inconsistencies intended to take advantage of changes in law since the date of the previously filed tax return)merger agreement), settle or compromise any material liability for taxes or any tax audit, claim or other proceeding relating to a material amount of taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law) law), surrender any right to claim a material refund of taxes, or except extensions in connection with extensions of time obtained in the ordinary course of business consistent with past practice for the filing of tax returns, agree to an extension or waiver of the statute of limitations with respect to a material amount of taxes; take any action, or knowingly fail to take any action, which action or failure to act would or would be reasonably expected to prevent or impede the offer and the merger,mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for the incurrence and repayment of any indebtedness solely among TableauSlack and its wholly owned subsidiaries or solely among such wholly owned subsidiaries; enter into any transactions or contracts with any affiliate or other person that would be required to be disclosed by TableauSlack under Item 404 of Regulation S-K of the SEC; fail to use commercially reasonable efforts to maintain Tableau’sSlack’s insurance policies or comparable replacement policies with respect to the material assets, operations and activities of TableauSlack and its subsidiaries; (a) acquire any real property or enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), (b) materially modify or amend or exercise any right to renew any TableauSlack lease, or waive any material term or condition thereof or grant any material consents thereunder, (c) grant or otherwise knowingly create or consent to the creation of any material easement, covenant, restriction, assessment or charge affecting any real property leased by Tableau,Slack, or any interest therein or part thereof, (d) knowingly commit any waste or nuisance on any such property or (e) make any material changes in the construction or condition of any such property, in each case of (b) through (e), other than in the ordinary course of business consistent with past practice; other than the Slack special meeting, convene any special meeting (or any adjournment or postponement thereof) of the holders of TableauSlack common stock; terminate or modify or waive in any material respect any right under any material permit; adopt or otherwise implement any stockholder rights plan, “poison-pill”“poison pill” or other comparable agreement; amend, modify, supplement or terminate the convertible notes indenture or certain capped call confirmations or take any action that would result in a change to the conversion rate (as defined in the convertible notes indenture as in effect on December 1, 2020) or the applicable percentage, option entitlement, strike price or cap price (each as defined in the applicable capped call confirmations as in effect on December 1, 2020) from that set forth in the merger agreement; take or cause to be taken any action that would reasonably be expected to materially delay, impede or prevent the consummation of the transactions contemplated by the merger agreement on or before the outside date; to the extent within Slack’s or any of its subsidiaries’ control, take any action to cause, or that would result in, the conversion of Class B common stock of Slack into Class A common stock of Slack; or agree or authorize, in writing or otherwise, to take any of the foregoing actions. -109-
Restrictions on Salesforce’s Operations The merger agreement provides for certain restrictions on Salesforce’s and its subsidiaries’ activities until the earlier of the first effective time of the merger or the date (if any) on which the merger agreement is terminated. In general, except as specifically permitted or required by the merger agreement, as required by applicable law or as consented to in writing by TableauSlack (which consent may not be unreasonably withheld, conditioned or delayed), subject to specified exceptions set forth in the merger agreement, Salesforce must not and must cause its subsidiaries not to, directly or indirectly: amend, modify, waive, rescind, change or otherwise restate the organizational documents of Salesforce (whether by merger, consolidation, operation of law or otherwise) in a manner that would materially and adversely affect the holders of TableauSlack common stock, or adversely affect the holders of TableauSlack common stock relative to other holders of Salesforce common stock; authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, stock or other securities of Salesforce or any of its subsidiaries), except dividends and distributions paid or made in the ordinary course of business consistent with past practice by Salesforce or its subsidiaries to Salesforce or any other wholly owned subsidiary of Salesforce; split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, except for any such transaction involving only wholly owned subsidiaries of Salesforce;Salesforce and any transaction that would require an adjustment to the merger consideration and for which the proper adjustment is made; liquidate (completely or partially), dissolve or adopt any plan or resolution providing for any of the foregoing, in each case, with respect to Salesforce, OfferorMerger Sub I or any direct or indirect parent entity of Offeror;Merger Sub II; acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or publicly announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or a material portion of the assets of any person (or any business or division thereof) that (a) would require (i) the filing by Salesforce or any of its subsidiaries of a Notification and Report Form pursuant to the HSR Act with respect to such acquisition or (ii) any pre-closing approvals, consents, waivers or clearances under certain specified antitrust and foreign investment laws with respect to such acquisition and (b) would reasonably be expected to prevent (i) any waiting period (or extensions thereof) applicable to the transactions contemplated by the merger agreement under the HSR Act from expiring or terminating prior to the outside date or (ii) Salesforce, Merger Sub I or Merger Sub II from obtaining, prior to the outside date, any of the required pre-closing approvals, consents, waivers or clearances applicable to the transactions contemplated by the merger agreement under certain specified antitrust and foreign investment laws; | or division thereof) that (i) would require (a) the filing by Salesforce or any of its subsidiaries of a Notification and Report Form pursuant to the HSR Act with respect to such acquisition or (b) any pre-closing approvals, consents, waivers or clearances under the applicable antitrust laws of Germany with respect to such acquisition and (ii) would, or would reasonably be expected to, prevent (a) any waiting period (or extensions thereof) applicable to the transactions contemplated by the merger agreement under the HSR Act from expiring or terminating prior to the outside date or (b) Salesforce or Offeror from obtaining, prior to the outside date, any of the required pre-closing approvals, consents, waivers or clearances applicable to the transactions contemplated by the merger agreement under the applicable antitrust laws of Germany;
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take any action, or knowingly fail to take any action, which action or failure to act would, or would be reasonably expected to prevent or impede the offer and the merger,mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; take or cause to be taken any action that would reasonably be expected to materially delay, impede or prevent the consummation of the transactions contemplated by the merger agreement on or before the outside date; or agree or authorize, in writing or otherwise, to take any of the foregoing actions. AccessSlack Special Meeting and Board Recommendation
FromThe merger agreement requires Slack to (a) as promptly as practicable following effectiveness of the registration statement of which this proxy statement/prospectus forms a part, duly call, set a record date for, give notice of, convene (in any event on a date within 45 days of the effectiveness of this registration statement,
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subject to adjournment or postponement) and hold a meeting of its stockholders for the purpose of seeking the Slack stockholder approval, (b) submit the merger proposal to its stockholders at such meeting and (c) not submit any other proposal in connection with such meeting (other than the merger-related compensation proposal and the adjournment proposal) without the prior written consent of Salesforce. Slack is only entitled to adjourn or postpone the special meeting without Salesforce’s consent (x) after consultation with Salesforce, if adjournment or postponement is required by law to ensure any supplement or amendment to this proxy statement/prospectus or the registration statement is provided to stockholders within a reasonable amount of time in advance of the special meeting, or (y) if there are not sufficient votes at such meeting to constitute a quorum or to obtain approval of the merger proposal (to allow additional time for solicitation of proxies), subject to certain limits on the number and length of such adjournments or postponements. In addition, Salesforce has the right to require Slack to effect one adjournment or postponement for a period up to 10 business days each under the circumstances described in the foregoing clause (y) so long as no resulting change in the record date would be required. Slack will use its reasonable best efforts to (A) solicit from the Slack stockholders proxies in favor of the adoption of the merger agreement and approval of the transactions contemplated by the merger agreement and (B) take all other action necessary or advisable to secure the Slack stockholder approval, including, unless the Slack board has validly made a change of recommendation in accordance with the terms of the merger agreement, communicating the Slack board recommendation and include the Slack board recommendation in this proxy statement/prospectus. Even if an adverse recommendation change has been made pursuant to the terms of the merger agreement, unless the merger agreement has been terminated in accordance with its terms, the Slack special meeting will be convened and the merger agreement will be submitted to the Slack stockholders for approval at the Slack special meeting, and the obligations of the parties under the merger agreement will continue in full force and effect and will not be affected by the commencement, public proposal, public disclosure or communication to Slack of any acquisition proposal, as defined below under the section entitled “—No Solicitation of Other Offers by Slack.” No Solicitation of Other Offers by Slack Under the terms of the merger agreement, subject to certain exceptions described below, Slack has agreed that, from December 1, 2020 (the date of the merger agreementagreement) until the earlier of the first effective time of the merger or the date (if any) on which the merger agreement is terminated, to the extent permitted by applicable law, TableauSlack will give,not and will cause each of its subsidiaries, to give, Salesforce and its representatives reasonable access during normal business hours and upon reasonable advance noticetheir respective officers and directors not to, Tableau’s offices, properties, contracts, personnel, books and records (so long as such access does not unreasonably interfere with Tableau’s business), and TableauSlack will use reasonable best efforts to cause its and its subsidiaries’ other representatives not to, directly or indirectly: | (a) | solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer, which constitutes or would reasonably be expected to lead to an acquisition proposal (as defined below); |
| (b) | participate in any negotiations regarding, or furnish to any person any information relating to Slack or any of its subsidiaries in connection with, an actual or potential acquisition proposal; |
| (c) | adopt, approve, endorse or recommend, or propose to adopt, approve, endorse or recommend, any acquisition proposal; |
| (d) | withdraw, change, amend, modify or qualify, or otherwise propose to withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, the Slack board recommendation, or resolve or agree to take any such action; |
| (e) | if an acquisition proposal has been publicly disclosed, fail to publicly recommend against any such acquisition proposal within 10 business days after the public disclosure of such acquisition proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Salesforce, such |
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| rejection of such acquisition proposal) and reaffirm the Slack board’s recommendation that Slack stockholders approve the transactions contemplated by the merger agreement, including the first merger, and adopt the merger agreement within such 10-business-day period (or, if earlier, by the second business day prior to the Slack special meeting); |
| (f) | fail to include the Slack board’s recommendation that Slack approve the transactions contemplated by the merger agreement, including the first merger, and adopt the merger agreement in this proxy statement/prospectus; |
| (g) | approve, or authorize, or cause or permit Slack or any of its subsidiaries to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or document with respect to, or any other agreement or commitment providing for, any acquisition proposal (other than certain confidentiality agreements); |
| (h) | call or convene a meeting of Slack stockholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or |
| (i) | resolve or agree to do any of the foregoing. |
We refer to each action set forth in clauses (c), (d), (e), (f), (g), (h) and (i) (to the extent clause (i) is related to the foregoing clauses (c), (d) (e), (f), (g) or (h)) above as a “change of recommendation.” In addition, under the merger agreement, Slack has agreed that: it will and will cause each of its subsidiaries, and its and their respective officers and directors to, and Slack will use its reasonable best efforts to furnish as promptly as practicable to Salesforce all information concerning Tableau’s business, properties, offices, contracts and personnel as Salesforce reasonably requests. However, Tableau is not required to provide access to or disclose information that may not be disclosed pursuant to contractual or legal restrictions, that is subject to attorney-client, attorney work product or other legal privilege, or in the good faith judgement of the Tableau, would violate applicable law, provided that Tableau will use commercially reasonable efforts to make alternative arrangements for disclosure that do not violate such restrictions or privileges. Tax Matters
The merger agreement provides that none of the parties shall (and each party shall cause its respective subsidiaries not to) knowingly takeand its subsidiaries’ other representatives to, immediately cease any action (or knowingly failand all solicitations, encouragements, discussions or negotiations with any persons, or provision of any information to take any reasonable action) which action (or failurepersons, with respect to act)any inquiry, proposal or offer that constitutes, or would reasonably be expected to prevent or impede the offer and the merger, taken together, from qualifying aslead to, an acquisition proposal;
it will promptly request in writing that each person that previously executed a “reorganization” within the meaning of Section 368(a) of the Code. The mergerconfidentiality agreement provides that the parties intend to report and, except to the extent otherwise required by a determination as such term is used in Section 1313 of the Code, shall report, for U.S. federal income tax purposes, the offer and the merger, taken together, as a “reorganization” within the meaning of Section 368(a) of the Code. Each of the parties agree to cooperate in good faith and use their reasonable best efforts to deliver to Salesforce’s and Tableau’s tax counsel and tax advisors a certificate signed by an officer of Salesforce (and the Offeror) or Tableau, as applicable, containing representations reasonably satisfactory to such counsel or advisorswith Slack in connection with the renderingits consideration of an acquisition proposal or a potential acquisition proposal promptly destroy or return to Slack all nonpublic information furnished by Slack or any tax opinionsof its representatives to be issued by such counselperson or advisors with respect to the treatmentany of the offer and the merger, taken together, as a reorganization within the meaning of Section 368(a) of the Code, and Salesforce’s and Tableau’s tax counsel and tax advisors shall be entitled to rely upon such representationsits representatives in rendering any such opinions. Additional Agreements
Under the merger agreement, Salesforce and Tableau are required to use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the merger agreement as soon as practicable, including:
preparing and filing or otherwise providing, in consultationaccordance with the other party and as promptly as practicable and advisable, all documentation to effect all necessary applications, notices, petitions, filings, and other documents and to obtain as promptly as reasonably practicable all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any governmental entity in order to consummate the transactions contemplated by the mergerterms of such confidentiality agreement; and
taking all steps as may be necessary, subjectit will terminate access to the limitations inany physical or electronic data rooms relating to a possible acquisition proposal by such person and its representatives.
Under the merger agreement, Slack must enforce, and not waive, terminate or modify without Salesforce’s prior written consent, any confidentiality, standstill or similar provision in any confidentiality, standstill or other agreement; provided that, if the Slack board determines in good faith after consultation with Slack’s outside legal counsel that the failure to obtain allwaive a particular standstill provision would be reasonably likely to violate the directors’ fiduciary duties under applicable law, Slack may, with prior written notice to Salesforce, waive such waiting period expirationsstandstill solely to the extent necessary to permit the applicable person (if it has not been solicited in violation of the merger agreement) to make, on a confidential basis to the Slack board, an acquisition proposal, conditioned upon such person agreeing to disclosure of such acquisition proposal to Salesforce, in each case as contemplated by the merger agreement. Notwithstanding the prohibitions described above, if Slack receives, prior to the receipt of the Slack stockholder approval, an unsolicited bona fide written acquisition proposal that did not result from a breach of Slack’s non-solicitation obligations, then Slack, its subsidiaries and its representatives are permitted to contact the person or terminations, consents, clearances, waivers, licenses, registrations, permits, authorizations, orders and approvals. Further, Salesforce and Tableau each agree to:any of its representatives who has made such acquisition proposal to clarify (and not to negotiate or
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make an appropriate filingengage in any discussions regarding or relating to) the material terms and conditions of a Notificationsuch acquisition proposal so that Slack may inform itself about such acquisition proposal. Further, Slack, its subsidiaries and Report Form pursuantits representatives are permitted to the HSR Actfurnish nonpublic information to such person and engage in discussions or negotiations with such person with respect to the transactions contemplated by the merger agreementacquisition proposal, as promptly as practicable, and in any event within 10 business days after the date of the merger agreement (unless a later date is mutually agreed between the parties), and to supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as reasonably practicable; and
make all other necessary filings as promptly as reasonably practicable, and supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested under any other applicable antitrust laws.
Notwithstanding the foregoing, none of Salesforce, the Offeror or any of their respective subsidiaries is required to, and Tableau may not and may not permit any of its subsidiaries to, without the prior written consent of Salesforce, become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (1) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of Tableau, the surviving company, Salesforce or any of their respective subsidiaries, (2) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of Tableau, the surviving company, Salesforce or any of their respective subsidiaries or (3) impose any restriction, requirement or limitation on the operation of the business or portion of the business of Tableau, the surviving company, Salesforce or any of their respective subsidiaries. However, if requested by Salesforce, Tableau or its subsidiaries will become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on Tableau or its subsidiaries in the event the merger is completed.
Under the merger agreement, in connection with obtaining all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations for the transactions under the HSR Act or any other antitrust laws, Salesforce and Tableau also agree to:as:
cooperatethe Slack board determines in all respectsgood faith, after consulting with Slack’s outside legal counsel and consult with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party;
promptly inform the other party of any communication with the DOJ, the FTC or any other governmental entity, by promptly providing copies to the other party of any such written
| communications, and of any communication received or given in connection with any proceeding by a private party; and
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permit the other party to review in advance any communication that it gives to, and consult with each other in advance of any meeting, substantive telephone call or conference with, the DOJ, the FTC or any other applicable governmental entity, or, in connection with any proceeding by a private party, with any other person, and to the extent permitted by the DOJ, the FTC or other applicable governmental entity or other person, give the other party the opportunity to attend and participate in any in-person meetings, substantive telephone calls or conferences with the DOJ, the FTC or any other governmental entity or other person.
Treatment of Tableau Equity Awards
Consideration for Tableau Options in the Merger—Generally
At the effective time, each Tableau option that is outstanding and unexercised immediately prior to the effective time (whether vested or unvested) held by any former employee of Tableau will be cancelled and converted into the right to receive the transaction consideration in respect of each “net share” covered by such Tableau option, where “net share” means the quotient obtained by dividing (a) the product of (i) the excess, if any, of the “per share cash equivalent consideration” (as defined below) over the per share exercise price applicable to the Tableau option, multiplied by (ii) the number of Tableau shares subject to the Tableau option immediately prior to the effective time, by (b) the per share cash equivalent consideration, less applicable tax withholdings. As used in the offer, the “per share cash equivalent consideration” means the product (rounded to the nearest cent) obtained by multiplying (i) the exchange ratio by (ii) the Salesforce trading price.
At the effective time, each Tableau option that is outstanding and unexercised immediately prior to the effective time not held by a former employee of Tableau will be assumed and automatically converted into an option to purchase the number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau option immediately prior to the effective time by the exchange ratio (each, an “adjusted option”). Each adjusted option will have an exercise price per share of Salesforce common stock (rounded up to the nearest whole cent) determined by dividing the per share exercise price of the Tableau option by the exchange ratio and will otherwise be subject to the same terms and conditions that were applicable to such Tableau option prior to the effective time.
Consideration for Tableau Restricted Stock Units and Performance Share Units in the Merger—Generally
At the effective time, each Tableau RSU award that is outstanding immediately prior to the effective time held by a non-employee director of Tableau will vest as of the effective time and will be cancelled and converted into the right to receive the transaction consideration in respect of each share of Tableau common stock subject to such Tableau RSU award.
At the effective time, each Tableau RSU award that is outstanding immediately prior to the effective time not held by a non-employee director of Tableau will be assumed and automatically converted into a restricted stock unit, on the same terms and conditions that were applicable to such Tableau RSU award prior to the effective time, with respect to a number of shares of Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau RSU award by the exchange ratio (each, a “converted RSU award”). Each converted RSU award will be subject to the same terms and conditions as were applicable to such Tableau RSU award prior to the effective time.
At the effective time, each Tableau PSU award that is outstanding immediately prior to the effective time will be assumed and automatically converted into a converted RSU award with respect to a number of shares of
Salesforce common stock (rounded to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to the Tableau PSU award by the exchange ratio; provided that the number of shares of Tableau common stock subject to a Tableau PSU award will equal the number of shares Tableau common stock that would have vested based on the achievement of performance at target levels. Each converted RSU award will be subject to the same terms and conditions as were applicable to such Tableau PSU award prior to the effective time, exceptfinancial advisors, that such converted RSU award will vest after the effective time solely based on continued serviceproposal constitutes, or would reasonably be expected to Salesforce and its affiliates, subject to any accelerated vesting provisions applicable to such converted RSU award.
Tableau Employee Stock Purchase Plan
Pursuant to the merger agreement, as soon as practicable following the date of the merger agreement, Tableau shall take all actions with respect to the ESPP that are necessary to provide that: (i) with respect to the current ESPP offering periods, no Tableau employee who is not a participant in the ESPP as of the date of the merger agreement may become a participant in the ESPP and no current participant may increase the percentage amount of such participant’s payroll deduction election from that in effect on the date of the merger agreement for such current ESPP offering periods; (ii) subject to the consummation of the merger, the ESPP shall terminate effective immediately prior to the effective time; (iii) if the current ESPP offering periods terminate prior to the effective time, then the ESPP shall be suspended and no new offering period shall be commenced under the ESPP prior to the termination of this Agreement; and (iv) if any current ESPP offering period is still in effect at the effective time, then the last day of such current ESPP offering period shall be accelerated to a date prior to the closing date of the merger.
Registration of Salesforce Common Stock
Pursuant to the merger agreement, as soon as reasonably practicable after the effective time, Salesforce will file one or more appropriate registration statements with the SEC (on Form S-3 or Form S-8, or any successor or other appropriate forms) relating to the shares of Salesforce common stock issuable with respect to the adjusted options and converted RSU awards. Salesforce will use commercially reasonable efforts to maintain the effectiveness of such registration statement or statements for so long as any adjusted options and converted RSU awards remain outstanding and will reserve a sufficient number of shares of Salesforce common stock for issuance upon exercise or settlement thereof.
Employee Matters
Under the merger agreement, Salesforce will assume, honor and fulfill all of Tableau’s benefit plans in accordance with their terms as in effect immediately prior to the date of the merger agreement or as subsequently amended or terminated as permitted pursuant to the terms of such Tableau benefit plans and the merger agreement.
For a period of twelve months following the effective time, Salesforce has agreed to, with respect to each employee of Tableau who becomes an employee of Salesforce or its subsidiaries as of the effective time (which we refer to as the “continuing employees”), (a) maintain at least the same wage rate or base salary of each continuing employee and (b) provide employee benefits (including cash bonus opportunities, retirement, health and welfare benefits, but excluding equity compensation) that are, in the aggregate, in Salesforce’s discretion, either no less favorable to such continuing employee than (i) those in effect for such continuing employee immediately prior to the effective time or (ii) those in effect for similarly situated employees of Salesforce and its subsidiaries.
Salesforce also has agreed under the merger agreement to recognize years of service with Tableau or its subsidiaries under all employee benefit plans maintained by Salesforce or its affiliates for the benefit of continuing employees, except to the extent that any such recognition would result in, a duplication of benefits,
and to waive certain participation restrictions for continuing employees who become eligible to participate in Salesforce welfare plans. Tableau will terminate its 401(k) plan(s) as of the day immediately preceding the effective time if Salesforce provides timely, written notice requesting such termination in accordance with the merger agreement.
Directors’ and Officers’ Indemnification and Insurance
Under the merger agreement, for six years after the effective time, Salesforce must, or must cause the surviving corporation in the merger to, indemnify and hold harmless, to the fullest extent permitted under applicable law and the organizational documents of Tableau or its subsidiaries, or any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce, each current and former director and executive officer of Tableau and its subsidiaries (which we refer to as the “indemnified parties”) against any costs and expenses (including advancing attorneys’ fees and expenses) in connection with any actual or threatened claims in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time of the merger, whether asserted or claimed prior to, at or after the effective time of the merger, in connection with such person serving as an executive officer, director, employee or other fiduciary of Tableau, any of its subsidiaries or any other person if such service was at the request or for the benefit of Tableau or any of its subsidiaries.
In addition, for a period of six years following the effective time, Salesforce is required to maintain in effect the provisions in the organizational documents of Tableau and any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce (except to the extent such agreement provides for an earlier termination) regarding elimination of liability, indemnification of executive officers, directors and employees and advancement of expenses that are in existence as of the date of the merger agreement.
At or prior to the effective time, Tableau is required to purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the effective time with respect to matters arising at or prior to the effective time, with a one-time cost not in excess of 300% of the last aggregate annual premium paid by Tableau for its directors’ and officers’ liability insurance and fiduciary liability insurance prior to the date of the merger agreement, and if the cost of such “tail” insurance policy would otherwise exceed such amount, Tableau may purchase as much coverage as reasonably practicable for such amount.
Termination of the Merger Agreement
Termination by Salesforce or Tableau
The merger agreement may be terminated at any time before the acceptance time:
by mutual written consent of Salesforce and Tableau; or
by either Salesforce or Tableau, if:
any governmental entity of competent jurisdiction has issued a final, non-appealable order, injunction, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the merger agreement;superior proposal;
the offer shall have terminated or expiredSlack board determines in accordancegood faith, after consulting with its terms (subjectSlack’s outside legal counsel, that the failure to take such action would be reasonably likely to violate the rightsdirectors’ fiduciary duties under applicable law; and obligations of Salesforce or the Offeror to extend the offer pursuant to the merger agreement) without the Offeror having accepted for payment any Tableau shares pursuant to the offer; except that this right to terminate the merger agreement will not be available to Salesforce if Salesforce or the Offeror has failed to comply in any material respect with its obligations under the merger agreement related to the extension of the offer or the acceptance of Tableau shares and this right to terminate the merger agreement will not be available to Tableau if Tableau or has failed to comply | | • | | (x) prior to providing any such nonpublic information, the person making the acquisition proposal enters into a confidentiality agreement that contains terms that are no less favorable in the aggregate to Slack than those contained in the confidentiality agreement between Salesforce and Slack (provided that the confidentiality agreement is not required to include a standstill provision) and that does not in any material respectway restrict Slack or its representatives from complying with its disclosure obligations under the merger agreement, relatedand (y) Slack also provides Salesforce, prior to offering documents or its obligations described under “—No Solicitation of Other Offers by Tableau”substantially concurrently with the time such information is provided or “—Change of Recommendation; Match Rights”; ormade available to such person, any nonpublic information furnished to such other person that was not previously furnished to Salesforce. |
the acceptance time has not occurred by on or before October 9, 2019 (which we refer to as the “outside date”), except that (a) if on the outside date all of the conditions to the offer, other than certain conditions related to clearances under the HSR Act and those conditions to the offer that by their nature are to be satisfied at the expiration of the offer (if such conditions (other than the minimum tender condition) would be satisfied or validly waived were the expiration of the offer to occur at such time), have been satisfied or waived, then the outside date will automatically be extended to January 9, 2020 and (b) this right to terminateUnder the merger agreement, Slack will not be available tonotify Salesforce promptly (and in any party whose actionevent within 24 hours) of Slack’s or failure to fulfill any obligation under the merger agreement has been a proximate cause of Slack’s controlled affiliates’ or directly resulted in, the failure of the transactions to be consummated by the outside date and such actionits or failure to act constitutes a material breach of the merger agreement.
Termination by Tableau
The merger agreement may be terminated at any time before the acceptance time by Tableau if:
the Tableau board of directors effects a change of recommendation and Tableau concurrently enters into a definitive agreement providing for a superior proposal, as long as (1) Tableau has complied in all material respects with its obligations to provide notice and negotiate with Salesforce regarding amendments to the merger agreement, as described under “—Change of Recommendation; Match Rights” and (2) concurrently with or prior to (and as a condition to) such termination, Tableau pays to Salesforce the $552 million termination fee described below; or
(1) Salesforce or the Offeror has breached, failed to perform or violated their respective covenantsrepresentatives’ receipt of any acquisition proposal, any proposals or agreements under the merger agreement, which breach, failure to perform or violationinquiries that would reasonably be expected to have a material adverse effect on Salesforce,lead to an acquisition proposal, or any inquiry or request for nonpublic information relating to Slack or any of the representations and warranties of Salesforceits subsidiaries by any person who has made or the Offeror in the merger agreement have become inaccurate and such inaccuracy would reasonably be expected to havemake any acquisition proposal. The notice must include the identity of the person making the acquisition proposal, inquiry or request, and the material terms and conditions of any such proposal or offer or the nature of the information requested pursuant to any such inquiry or request, including unredacted copies of all written requests, proposals, correspondence or offers (including any proposed agreements received by Slack or its representatives relating to such acquisition proposal) or, if such acquisition proposal is not in writing, a reasonably detailed written description of the material adverse effectterms and conditions thereof. Slack will keep Salesforce reasonably informed on Salesforce; (2)a prompt and timely basis of the status and material terms (including any amendments or proposed amendments to such breach, failurematerial terms) of any such acquisition proposal or potential acquisition proposal, and as to perform, violationthe nature of any information requested of Slack with respect thereto and promptly (and in any event within 24 hours), provide to Salesforce copies of all proposals, offers and proposed agreements relating to an acquisition proposal received by Slack or inaccuracyits representatives or, if such information or communication is incapablenot in writing, a reasonably detailed written description of being curedthe material contents thereof. Slack also must promptly provide (and in any event within 24 hours) Salesforce with any material nonpublic information concerning Slack provided to any other person in connection with any acquisition proposal that was not previously provided to Salesforce. Without limiting the foregoing, Slack will promptly (and in any event within 24 hours after such determination) inform Salesforce in writing if Slack determines to begin providing information or to engage in discussions or negotiations concerning an acquisition proposal to the extent otherwise permitted by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside date and the 30th calendar day following receipt of written notice from Tableau of such breach, failure to perform, violation or inaccuracy; and (3) Tableau is not then in material breachmerger agreement.
An “acquisition proposal” for purposes of the merger agreement such that the related conditions to themeans any offer, would not then be satisfied if the expiration dateproposal or indication of theinterest from any person or entity, other than a proposal or offer (including any extensions pursuant to the merger agreement) were the dateby Salesforce or a subsidiary of termination of the merger agreement. Termination by Salesforce,
The merger agreement may be terminated at any time before the acceptance time by Salesforce if:relating to any transaction or series of related transactions involving:
any acquisition or purchase by any person, directly or indirectly, of more than 15% of any class of outstanding Slack voting or equity securities (whether by voting power or number of shares); any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any person or group beneficially owning more than 15% of any class of outstanding Slack voting or equity securities (whether by voting power or number of shares); -113-
any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction, in each case involving Slack and any other person or group, pursuant to which the Tableau boardSlack stockholders immediately prior to such transaction hold less than 85% of directors has effected a changethe equity interests in the surviving, resulting or ultimate parent entity of recommendationsuch transaction (whether by voting power or Tableau has materially breached its obligations described under “—No Solicitationnumber of Other Offers by Tableau” or “—Change of Recommendation; Match Rights”shares); or (1) Tableau has breached, failedany sale, lease, exchange, transfer or other disposition to performany person or violatedgroup of more than 15% of the consolidated assets of Slack and its covenants or agreements undersubsidiaries (measured by fair market value).
A “superior proposal” for purposes of the merger agreement means a bona fide, written acquisition proposal by a third party which the Slack board determines in good faith (after consultation with Slack’s outside legal counsel and financial advisors) to be more favorable to Slack stockholders from a financial point of view than the mergers, taking into account all relevant factors, including all the terms and conditions of such proposal or anyoffer (including the merger consideration, conditionality, timing, certainty of the representationsfinancing and/or regulatory approvals and warrantieslikelihood of Tableau inconsummation) and the merger agreement, have become inaccurate, in either case in a manner that would give riseas well as any changes to the rightterms of the merger agreement proposed by Salesforce in response to any acquisition proposal. When determining whether an offer constitutes a superior proposal, references in the definition of the term “acquisition proposal” to “15%” or “85%” will be replaced with references to “80%” and the Offeror not to accept for payment and pay for“20%,” respectively. Change of Recommendation; Match Rights At any shares of Tableau common stock pursuanttime prior to the receipt of Slack stockholder approval: the Slack board may make a change of recommendation in response to an intervening event (as defined below) if the Slack board has determined in good faith, after consultation with Slack’s outside legal counsel and financial advisors, that the failure of any ofto take such action would be reasonably likely to violate the conditions to the consummation of the offer related to Tableau’s compliance with its covenants and agreementsdirectors’ fiduciary duties under applicable law; or the accuracy of Tableau’s representations and warranties; (2) such | | • | | breach, failure to perform, violation or inaccuracy is incapablethe Slack board may make a change of being cured by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside daterecommendation and the 30th calendar day following receipt of written notice from Salesforce of such breach, failure to perform, violation or inaccuracy; and (3) neither Salesforce nor the Offeror is then in material breach of the merger agreement such that Tableau would have the rightcause Slack to terminate the merger agreement asin order to enter into a definitive agreement providing for an unsolicited acquisition proposal received after December 1, 2020 (the date of the merger agreement) that did not result from a breach of Slack’s non-solicitation obligations and such material breach.
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Termination Fee and Expenses
Expenses
Except as otherwise expressly provided in the merger agreement, all costs and expenses incurred in connection with the merger agreement, the offer, the merger and the other transactions contemplated thereby will be paid by the party incurring the cost or expense.
acquisition proposal is not withdrawn (subject to payment by Slack to Salesforce of the termination fee described under the section entitled “—Termination Fee” and “—Expenses”), which the Slack board has determined in good faith after consultation with Slack’s outside legal counsel and financial advisors that such acquisition proposal constitutes a superior proposal, but only if the Slack board has determined in good faith, after consultation with Slack’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable law. |
