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Callidus Software Inc – ‘PREM14A’ for 2/12/18

On:  Monday, 2/12/18, at 4:46pm ET   ·   For:  2/12/18   ·   Accession #:  1047469-18-754   ·   File #:  0-50463

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/12/18  Callidus Software Inc             PREM14A     2/12/18    1:1.6M                                   Merrill Corp/New/FA

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 1: PREM14A     Preliminary Proxy Solicitation Material - Merger    HTML   1.10M 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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CALLIDUS SOFTWARE INC.
4140 Dublin Boulevard, Suite 400
Dublin, California 94568
                        , 2018

Dear Stockholder:

       You are cordially invited to attend a special meeting of stockholders of Callidus Software Inc. ("Callidus" or "we," "us," or "our") to be held on                        , 2018, at 10:00 a.m., Pacific Time, at our headquarters located at 4140 Dublin Boulevard, Suite 400, Dublin, California 94568.

       At the special meeting, you will be asked to consider and vote upon a proposal to adopt an agreement and plan of merger ("Merger Agreement") by and among SAP America, Inc. ("SAP"), Emerson One Acquisition Corp., a wholly-owned subsidiary of SAP, and Callidus.

       If the Merger Agreement is adopted and the merger is completed, Callidus will become a wholly-owned subsidiary of SAP and each share of Callidus common stock that you own as of the date of the merger will be converted into the right to receive $36.00 in cash, without interest and less any withholding taxes required by applicable law (unless you have properly demanded your statutory rights of appraisal with respect to the merger).

       Our board of directors ("Board") considered a number of factors in evaluating the terms of the Merger Agreement. Based on its review, our Board unanimously determined that the terms and conditions of the merger and the Merger Agreement are advisable, fair to and in the best interests of Callidus and our stockholders. Accordingly, our Board has unanimously approved the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, and unanimously recommends that you vote "FOR" the adoption of the Merger Agreement.

       The enclosed proxy statement provides detailed information about the special meeting, the Merger Agreement and the merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement. We encourage you to read the proxy statement carefully in its entirety. The proxy statement is dated                        , 2018, and is first being mailed to Callidus stockholders on or about                        , 2018.

       Your vote is very important, regardless of the number of shares you own.    The proposal to adopt the Merger Agreement must be approved by the holders of a majority of the shares of Callidus common stock entitled to vote at the special meeting. Only stockholders who owned shares of Callidus common stock at the close of business on                        , 2018, the record date for the special meeting, will be entitled to vote at the special meeting.

       To vote your shares, you may return your proxy card, submit a proxy via the Internet or by telephone, as specified in the Internet and telephone voting instructions contained in the proxy statement, or attend the special meeting and vote in person. If your shares are held in the name of a brokerage firm, bank, trust or other nominee, you must instruct the brokerage firm, bank, trust or other nominee how to vote your shares or obtain a proxy, executed in your favor, from that record holder in order to vote at the special meeting. Even if you plan to attend the special meeting, we urge you to promptly submit a proxy for your shares via the Internet or by telephone or by completing, signing, dating and returning the enclosed proxy card.

       If you fail to return your proxy, attend the special meeting and vote in person, or give voting instructions to your brokerage firm, bank, trust or other nominee, then your shares will not be counted for determining whether a quorum is present at the special meeting and your decision not to respond will have the same effect as if you voted "AGAINST" the adoption of the Merger Agreement.

       If you attend the special meeting and wish to vote in person, you may revoke your proxy and vote in person.

       Thank you for your continued support of Callidus.

		Sincerely,
		ROXANNE OULMAN Executive Vice President, Chief Financial Officer

Dublin, California
                        , 2018

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CALLIDUS SOFTWARE INC.
4140 Dublin Boulevard, Suite 400
Dublin, California 94568

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT

To the Stockholders of Callidus Software Inc.:

       Callidus Software Inc., a Delaware corporation ("Callidus" or "we," "us," or "our"), will hold a special meeting of stockholders at our headquarters located at 4140 Dublin Boulevard, Suite 400, Dublin, California 94568, at 10:00 a.m., Pacific Time, on                        , 2018, to consider and vote upon the following proposals:

1.

To adopt the Agreement and Plan of Merger, dated as of January 29, 2018, by and among SAP America, Inc., a Delaware corporation ("SAP"), Emerson One Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of SAP ("Merger Sub"), and Callidus, as such agreement may be amended from time to time ("Merger Agreement");



2.

To approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Callidus's named executive officers that is based on or otherwise relates to the merger ("compensation proposal"); and



3.

To approve the adjournment of the special meeting to a later date, if our board of directors ("Board") determines that it is necessary or appropriate and is permitted by the Merger Agreement, to solicit additional proxies if there is not a quorum present or there are not sufficient votes in favor of the adoption of the Merger Agreement at the time of the special meeting ("adjournment proposal").

       Only record holders of Callidus common stock at the close of business on            , 2018, are entitled to receive notice of, and will be entitled to vote at, the special meeting, including any adjournments or postponements of the special meeting. Your vote is important, regardless of the number of shares of Callidus common stock you own.

       The affirmative vote of the holders of a majority of the shares of Callidus common stock outstanding and entitled to vote on the Merger Agreement is required to adopt the Merger Agreement. The affirmative vote of the holders of a majority of the outstanding shares of Callidus common stock present in person or represented by proxy and entitled to vote on the compensation proposal at the special meeting is required to approve the compensation proposal, and the affirmative vote of the holders of a majority of the outstanding shares of Callidus common stock present in person or represented by proxy and entitled to vote on the adjournment proposal at the special meeting is required to approve the adjournment proposal.

       In the event that a quorum is not present in person or represented by proxy at the special meeting, it is expected that the Board will recommend adjournment of the special meeting to solicit additional proxies if permitted by the Merger Agreement. If there is not a quorum of stockholders at the special meeting and the vote with respect to the adjournment proposal fails, our Board, if permitted by the Merger Agreement, may set a new record date and meeting date for a special meeting to consider the Merger Agreement, compensation proposal and adjournment proposal.

       If the merger is completed, Callidus stockholders who (i) submit a written demand for an appraisal of their shares prior to the stockholder vote on the adoption of the Merger Agreement, (ii) do not vote in favor of the adoption of the Merger Agreement or consent thereto in writing, (iii) take certain actions and meet certain conditions under Delaware law and (iv) do not thereafter withdraw their demand for appraisal of their shares of Callidus common stock or otherwise lose their appraisal rights, in each case in accordance with Delaware law, will have the right to have such shares appraised by the Delaware Court of Chancery and to receive payment of the fair value of such shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, as

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determined by the court. For a more detailed discussion of your appraisal rights, see "The Merger — Appraisal Rights" beginning on page 53 of this proxy statement and Annex C to this proxy statement.

       You are cordially invited to attend the special meeting in person. Whether or not you expect to attend the special meeting, please complete, date, sign and return the enclosed proxy card, or vote via the Internet or by telephone, as instructed in these materials as promptly as possible in order to ensure your representation at the special meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held in the name of your brokerage firm, bank, trust or other nominee and you wish to vote at the special meeting, you must instruct the brokerage firm, bank, trust or other nominee how to vote your shares or obtain a proxy issued in your name from that record holder.

       If you sign, date and return your proxy card or submit a proxy via the Internet or by telephone without indicating how you wish to vote, your proxy will be voted "FOR" the adoption of the Merger Agreement, "FOR" the compensation proposal and "FOR" the adjournment proposal. If you do attend the special meeting and wish to vote in person, you may revoke your proxy and vote in person. You may revoke your proxy in the manner described in the enclosed proxy statement at any time before it has been voted at the special meeting.

       Our Board unanimously recommends that you vote "FOR" adoption of the Merger Agreement, "FOR" the advisory compensation proposal and "FOR" the adjournment proposal.

       The merger is described in the accompanying proxy statement, which we urge you to read carefully. A copy of the Merger Agreement is attached as Annex A to this proxy statement.

		By Order of the Board of Directors,
		ROXANNE OULMAN Executive Vice President, Chief Financial Officer

Dublin, California
                        , 2018

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YOUR VOTE IS IMPORTANT

       Whether or not you expect to attend the special meeting, please complete, date, sign and return the enclosed proxy card, or vote via the Internet or by telephone as instructed in these materials, as promptly as possible in order to ensure your representation at the special meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held of record by a brokerage firm, bank, trust or other nominee and you wish to vote at the special meeting, you must instruct the brokerage firm, bank, trust or other nominee how to vote your shares or obtain a proxy issued in your name from that record holder.

REFERENCES FOR ADDITIONAL INFORMATION

       If you have any questions about this proxy statement, the special meeting, the merger or need assistance with voting procedures, you should contact:

Callidus Software Inc.
4140 Dublin Boulevard, Suite 400
Dublin, California 94568
Attention: General Counsel
Telephone: (925) 251-2200

or

D.F. King & Co., Inc.
48 Wall Street
New York, NY 10005
Email: CALD@dfking.com
Banks and Brokers Call: (212) 269-5550
All Others Call: (866) 342-1635

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CALLIDUS SOFTWARE, INC.

PROXY STATEMENT

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

       The following Q&A is intended to address some commonly asked questions about the special meeting of stockholders and the merger. These questions and answers may not address all questions that may be important to you as a Callidus stockholder. We urge you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement.

       Except as otherwise specifically noted in this proxy statement, "we," "our," "us" and similar words in this proxy statement refer to Callidus Software Inc. In addition, throughout this proxy statement, we refer to Callidus Software Inc., as "Callidus," to Emerson One Acquisition Corp. as "Merger Sub," to SAP America, Inc. as "SAP," and to SAP SE as "SAP SE."

Q:

Why am I receiving this proxy statement?

A:

You are receiving this proxy statement because you were a Callidus stockholder as of                              , 2018, the record date for the special meeting. To complete the merger, Callidus's stockholders holding a majority of the shares of Callidus common stock outstanding as of                              , 2018, the record date for the special meeting, must vote to adopt the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to this proxy statement.

The Merger

Q:

What will happen to my Callidus common stock as a result of the merger?

A:

If the merger is completed, each share of Callidus common stock that you hold at the effective time of the merger will be converted into the right to receive $36.00 in cash, without interest, less any withholding taxes required by applicable law. This does not apply to shares of Callidus common stock held by any Callidus stockholders who have properly demanded their appraisal rights under Delaware law (as more fully described below under the heading "The Merger — Appraisal Rights" beginning on page 53 of this proxy statement).

Q:

What will happen to Callidus generally as a result of the merger?

A:

If the merger is completed, Callidus will cease to be an independent public company and will be a company wholly-owned by SAP. As a result, you will no longer have any ownership interest in Callidus. Upon completion of the merger, shares of Callidus common stock will no longer be listed on any stock exchange or quotation system, including The Nasdaq Stock Market. In addition, following the completion of the merger, the registration of Callidus common stock and our reporting obligations under the Securities Exchange Act of 1934, as amended ("Exchange Act"), will be terminated.

Q:

What are the U.S. federal income tax consequences of the merger to me?

A:

The receipt of cash in exchange for shares of Callidus common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. Generally, you will recognize gain or loss equal to the difference between the amount of cash you receive and the adjusted tax basis of your shares of Callidus common stock. If you are a U.S. holder, you generally will be subject to U.S. federal income tax on any gain recognized in connection with the merger. If you are a non-U.S. holder, you generally will not be subject to U.S. federal income tax on any gain recognized in connection with the merger unless you have certain connections to the United States. The tax consequences of the merger to you will depend on your particular circumstances, and you should consult your own tax advisors to determine how the merger will affect you. For a more detailed summary of the U.S. federal income tax

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consequences of the merger, see "The Merger — Certain U.S. Federal Income Tax Consequences of the Merger" beginning on page 57 of this proxy statement.

Q:

Am I entitled to appraisal rights in connection with the merger?

A:

Statutory appraisal rights under Delaware law in connection with the merger will be available to stockholders who (i) submit a written demand for an appraisal of their shares prior to the stockholder vote on the adoption of the Merger Agreement, (ii) do not vote in favor of the adoption of the Merger Agreement or consent thereto in writing, (iii) take certain actions and meet certain conditions under Delaware law and (iv) do not thereafter withdraw their demand for appraisal of their shares of Callidus common stock or otherwise lose their appraisal rights, in each case in accordance with Delaware law. For a more detailed discussion of your appraisal rights, see the section entitled "The Merger — Appraisal Rights" beginning on page 53 of this proxy statement.

A copy of the full text of Section 262 of the Delaware General Corporation Law ("DGCL") is included as Annex C to this proxy statement. Failure to precisely follow any of the statutory procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights.

Q:

When do you expect the merger to be completed?

A:

We are working toward completing the merger as quickly as possible; however, the merger is subject to various closing conditions, including Callidus stockholder approval, the expiration or earlier termination of the required waiting period under the HSR Act and obtaining applicable foreign antitrust approvals. We cannot assure you that all conditions to the merger will be satisfied or, if satisfied, the date by which they will be satisfied.

The Special Meeting

Q:

When and where will the special meeting of stockholders be held?

A:

The special meeting of Callidus stockholders will be held at our headquarters located at 4140 Dublin Boulevard, Suite 400, Dublin, California 94568, at 10:00 a.m., Pacific Time, on                        , 2018.

Q:

What are the proposals that will be voted on at the special meeting?

A:

You will be asked to consider and vote on (i) a proposal to adopt the Merger Agreement; (ii) a proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the merger ("compensation proposal"); and (iii) a proposal to adjourn the special meeting to a later date or time, if our Board determines that it is necessary or appropriate and is permitted by the Merger Agreement, including to solicit additional proxies if there is not a quorum present or there are not sufficient votes in favor of the adoption of the Merger Agreement at the time of the special meeting ("adjournment proposal").

Q:

How does our Board recommend that I vote on the proposals?

A:

Our Board unanimously approved the Merger Agreement and determined that the merger and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Callidus and our stockholders and unanimously recommends that you vote:

•

"FOR" the proposal to adopt the Merger Agreement;



•

"FOR" the advisory compensation proposal; and

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•

"FOR" the adjournment proposal.

You should read the section entitled "The Merger — Recommendation of Callidus Board and Reasons for the Merger" beginning on page 34 of this proxy statement.

Q:

Who is entitled to attend and vote at the special meeting?

A:

The record date for the special meeting is                              , 2018. If you own shares of Callidus common stock as of the close of business on the record date, you are entitled to notice of, and to vote at, the special meeting or any adjournment of the special meeting. As of the record date, there were approximately                shares of Callidus common stock issued and outstanding held collectively by approximately                        stockholders of record.

Q:

How many votes are required to adopt the Merger Agreement?

A:

Under Delaware law, adoption of the Merger Agreement requires the affirmative approval of the holders of a majority of the shares of Callidus common stock outstanding and entitled to vote on the Merger Agreement.

Q:

How many votes are required to approve the compensation proposal?

A:

In accordance with the rules of the Securities and Exchange Commission ("SEC"), stockholders have the opportunity to cast a non-binding, advisory vote with respect to compensation that may be paid or become payable to our named executive officers based upon or otherwise relating to the merger, as reported in the "Golden Parachute Compensation" table on page 51 of this proxy statement. The vote to approve the compensation proposal is advisory and therefore will not be binding on Callidus or SAP, nor will it overrule any prior decision or require the Callidus Board (or any committee of the Board) to take any action, regardless of whether the merger is completed. The compensation that may be paid in connection with the proposed merger is contractual with respect to Callidus's named executive officers. Accordingly, if Callidus's stockholders adopt the Merger Agreement and the merger is completed, the compensation based on or otherwise relating to the merger will be paid to Callidus's named executive officers in accordance with the terms of their compensation agreements and arrangements, regardless of whether Callidus's stockholders approve the compensation proposal.

Callidus's Board will consider the affirmative vote of the holders of a majority of the shares of Callidus common stock that are present in person or represented by proxy and entitled to vote on the compensation proposal at the special meeting as advisory approval of the compensation proposal.

Q:

How many votes are required to adopt the adjournment proposal?

A:

Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the shares of Callidus common stock that are present in person or represented by proxy and entitled to vote on the proposal at the special meeting (even if less than a quorum).

Q:

How are votes counted? Why is my vote important? What happens if I abstain?

A:

If you do not submit a proxy or voting instructions or vote in person at the special meeting, it will be more difficult for us to obtain the necessary quorum to hold the special meeting.

Votes will be counted by the inspector of election appointed for the special meeting, who will separately count "FOR" and "AGAINST" votes and abstentions.

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If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the Merger Agreement.

If you abstain from voting, it will have the same effect as a vote against the advisory compensation proposal and adjournment proposal.

If you fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the advisory compensation proposal or adjournment proposal.

Q:

Do any Callidus directors or executive officers have interests in the merger that may differ from those of Callidus stockholders?

A:

In considering the recommendation of our Board with respect to the Merger Agreement, you should be aware that our directors and executive officers have interests in the merger that may be different from, or in addition to, those of our stockholders generally. These interests may create potential conflicts of interest. Our Board was aware that these interests existed and considered them, among other matters, when it approved the Merger Agreement and made its recommendation that our stockholders adopt the Merger Agreement. You should read the section entitled "The Merger — Interests of Callidus Directors and Executive Officers in the Merger" beginning on page 47 of this proxy statement.

Q:

What do I need to do now?

A:

After carefully reading and considering the information contained in this proxy statement, including the annexes and the other documents referred to in this proxy statement, please vote your shares in one of the manners described below. You have one vote for each share of Callidus common stock you own as of the record date.

Q:

How do I vote if I am a stockholder of record?

A:

You may vote:

•

by following the Internet voting instructions printed on your proxy card;



•

by following the telephone voting instructions printed on your proxy card;



•

by completing, signing and dating each proxy card you receive and returning it in the enclosed postage-paid envelope; or



•

by appearing and casting your vote in person at the special meeting.

If you are voting via the Internet or by telephone, your voting instructions must be received by the date and time indicated on the applicable proxy card(s).

Voting via the Internet, by telephone or by mailing in your proxy card will not prevent you from voting in person at the special meeting. You are encouraged to submit a proxy via the Internet, by telephone or by mail even if you plan to attend the special meeting in person, to ensure that your shares of Callidus common stock are present in person or represented at the special meeting.

If your shares are held by a brokerage firm, bank, trust or other nominee, you may direct your brokerage firm, bank, trust or other nominee to submit a proxy card by following the instructions that

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the brokerage firm, bank, trust or other nominee provides to you with these materials. If you hold shares through a brokerage firm, bank, trust or other nominee and wish to vote your shares in person at the special meeting, you must instruct the brokerage firm, bank, trust or other nominee how to vote your shares or obtain a proxy from your brokerage firm, bank, trust or other nominee and present it to the inspector of elections with your ballot when you vote at the special meeting.

If you return a properly signed and dated proxy card but do not mark the box showing how you wish to vote, your shares will be voted "FOR" the proposal to adopt the Merger Agreement, "FOR" the compensation proposal and "FOR" the adjournment proposal. Please do not send your stock certificate with your proxy card.

Q:

How do I vote if my shares are held by my brokerage firm, bank, trust or other nominee?

A:

If your shares are held in a brokerage account or by another nominee, such as a bank or trust, then the brokerage firm, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares. However, you still are considered to be the beneficial owner of those shares, with your shares being held in "street name." "Street name" holders generally cannot vote their shares directly and must instead instruct the brokerage firm, bank, trust or other nominee how to vote their shares. Your brokerage firm, bank, trust or other nominee will only be permitted to vote your shares for you at the special meeting if you instruct it how to vote. Therefore, it is important that you promptly follow the directions provided by your brokerage firm, bank, trust or other nominee regarding how to instruct them to vote your shares. If you wish to vote in person at the special meeting, you must bring a proxy from your brokerage firm, bank, trust or other nominee authorizing you to vote at the special meeting.

In addition, because any shares you may hold in "street name" will be deemed to be held by a different stockholder than any shares you hold of record, shares held in "street name" will not be combined for voting purposes with shares you hold of record. To be sure your shares are voted, you should instruct your brokerage firm, bank, trust or other nominee to vote your shares that you hold in "street name." Shares held by a corporation or business entity must be voted by an authorized officer of the entity.

Q:

May I change my vote after I have delivered my proxy?

A:

Yes. If you are the stockholder of record of Callidus common stock, you have the right to change or revoke your proxy at any time before the vote being taken at the special meeting:

•

by delivering to our General Counsel a signed written notice of revocation bearing a date later than the date of the proxy, stating that the proxy is revoked;



•

by attending the special meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy, so you must vote in person at the meeting to revoke your proxy);



•

by signing and delivering a new proxy, relating to the same shares of Callidus common stock and bearing a later date; or



•

by submitting another proxy by telephone or via the Internet after the date of your prior proxy and by the date and time indicated on the applicable proxy card(s).

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Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

Callidus Software Inc.
4140 Dublin Boulevard, Suite 400
Dublin, California 94568
Attn: General Counsel

If you are a "street name" holder of Callidus common stock, you should contact your brokerage firm, bank, trust or other nominee to obtain instructions as to how to change or revoke your proxy.

Q:

What is the deadline for voting my shares?

A:

If you are a stockholder of record, your proxy must be received via the Internet or by telephone by 11:59 p.m. Eastern time on                              , 2018, in order for your shares to be voted at the special meeting. However, if you are a stockholder of record, you may instead mark, sign, date and return the enclosed proxy card, which must be received before the polls close at the special meeting, in order for your shares to be voted at the special meeting. If you are a beneficial owner, please read the voting instructions provided by your bank, broker, trust or other nominee for information on the deadline for voting your shares.

Q:

Should I send in my stock certificates now?

A:

No. After the merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your shares of Callidus common stock for the merger consideration. If your shares are held in "street name" by your brokerage firm, bank, trust or other nominee, you will receive instructions from your brokerage firm, bank, trust or other nominee as to how to effect the surrender of your "street name" shares in exchange for the merger consideration. PLEASE DO NOT SEND IN YOUR CERTIFICATES NOW.

Q:

What happens if I sell my shares of Callidus common stock after the record date but before the special meeting?

A:

The record date for stockholders entitled to vote at the special meeting is earlier than the date of the special meeting and the expected closing date of the merger. If you transfer your shares of Callidus common stock after the record date but before the special meeting, you will, unless special arrangements are made, retain your right to vote at the special meeting but will transfer the right to receive the merger consideration to the person to whom you transfer your shares.

In addition, if you sell your shares prior to the special meeting or prior to the effective time of the merger, you will not be eligible to exercise your appraisal rights in respect of the merger. For a more detailed discussion of your appraisal rights and the requirements for properly demanding your appraisal rights, see "The Merger — Appraisal Rights" beginning on page 53 of this proxy statement and Annex C to this proxy statement.

Q:

What happens if the proposal to adopt the Merger Agreement is not approved by our stockholders or if the merger is not completed for any other reason?

A:

If the proposal to adopt the Merger Agreement is not approved by our stockholders or if the merger is not completed for any other reason, our stockholders will not receive any payment for their shares in connection with the merger. Instead, we will remain a stand-alone public company and Callidus common stock will continue to be listed and traded on The Nasdaq Stock Market. Under specified

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circumstances, we may be required to pay to SAP a termination fee, as described below under "The Merger Agreement — Termination Fee and Expenses" beginning on page 87 of this proxy statement.

Q:

How do our directors and executive officers intend to vote their shares of common stock in respect of the merger proposal?

A:

We currently expect that our directors and executive officers will vote their shares of common stock in favor of the merger proposal. At the close of business on the record date for the special meeting, directors and executive officers of Callidus and their affiliates were entitled to vote                shares of common stock at the special meeting, or approximately        % of the shares of common stock outstanding on such date.

Q:

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:

If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are considered, with respect to those shares, to be the "stockholder of record." If you are a stockholder of record, this proxy statement and your proxy card have been sent directly to you by or on behalf of Callidus.

If your shares are held through a brokerage firm, bank, broker or other nominee, you are considered the "beneficial owner" of shares of common stock held in "street name." If you are a beneficial owner of shares of common stock held in "street name," this proxy statement has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your brokerage firm, bank, broker or other nominee how to vote your shares by following their instructions for voting. You are also invited to attend the special meeting. However, because you are not the stockholder of record, you may not vote your shares in person by ballot at the special meeting unless you obtain a "legal proxy" from your brokerage firm, bank, broker or other nominee giving you the right to vote your shares at the special meeting.

Q:

What happens if I return my proxy card but I do not indicate how to vote?

A:

If you properly return your proxy card but do not include instructions on how to vote, your shares of common stock will be voted "FOR" the approval of the merger proposal, "FOR" the approval of the compensation proposal and "FOR" the approval of the adjournment proposal. We do not currently intend to present any other proposals for consideration at the special meeting.

Q:

Do I need to attend the special meeting?

A:

No. While our stockholders of record may exercise their right to vote their shares in person at the special meeting, it is not necessary for you to attend the special meeting in order to vote your shares of common stock.

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, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards, if your shares are registered differently or are held in more than one account. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please sign, date and return (or grant your

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proxy electronically over the Internet or by telephone) each proxy card and voting instruction form that you receive to ensure that all of your shares are voted.

Q:

Where can I find the voting results of the special meeting?

A:

If available, Callidus may announce preliminary voting results at the conclusion of the special meeting. Callidus intends to publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the special meeting. All reports that Callidus files with the SEC are publicly available when filed. For more information, see the section of this proxy statement captioned "Where You Can Find More Information."

Q:

Who can answer further questions?

A:

For additional questions about the merger, assistance in submitting proxies or voting shares of Callidus common stock, or to request additional copies of the proxy statement or the enclosed proxy card, please contact us at Callidus Software Inc., 4140 Dublin Boulevard, Suite 400, Dublin, California 94568, Attention: General Counsel, or call (925) 251-2200, or contact our proxy solicitor at D.F. King & Co., Inc., 48 Wall Street, New York, NY 10005 or call: (212) 269-5550.

If your brokerage firm, bank, trust or other nominee holds your shares in "street name," you should also call your brokerage firm, bank, trust or other nominee for additional information.

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FORWARD-LOOKING INFORMATION

       This proxy statement contains "forward-looking statements," as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), that are based on our current expectations, assumptions, beliefs, estimates and projections about the proposed merger, Callidus and our industry. The forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "plan," "project," "should," "could" and similar expressions. Factors that may affect those forward-looking statements include, among other things:

•

the parties' inability to consummate the merger due to failure to satisfy conditions to the completion of the transaction, including the receipt of stockholder approval or the regulatory approvals required for the transaction, which may not be obtained on the terms expected, on the anticipated schedule or at all;



•

the failure to recruit or retain Callidus employees;



•

the intense competition facing SAP and Callidus, which may pose unexpected future challenges;



•

the risk that the Merger Agreement may be terminated in circumstances that require us to pay SAP a termination fee of $75 million in connection therewith;



•

the costs, fees, expenses and charges we incur related to the merger;



•

risks arising from the merger's diversion of management's attention from our ongoing business operations;



•

the outcome of lawsuits that have been or may be brought by certain purported stockholders seeking to rescind the Merger Agreement or enjoin the consummation of the merger;



•

the effect of the announcement or pendency of the merger on our business relationships, operating results and business generally;



•

adverse effects on the market price of our common stock and on our operating results because of a failure to complete the merger;



•

the risk that our financial results differ from those set forth in the projections described in this proxy statement; and



•

other risks detailed in Callidus's filings with the SEC, including Callidus's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which discuss these and other important risk factors concerning our operations.

       We caution you that reliance on any forward-looking statement involves risks and uncertainties and that, although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to revise any of these forward-looking statements to reflect future events or circumstances.

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SUMMARY

       This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To understand the merger fully and for a more complete description of the legal terms of the merger, you should read carefully this entire proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement. See "Where You Can Find More Information" beginning on page 95 of this proxy statement. The Merger Agreement is attached as Annex A to this proxy statement. We encourage you to read the Merger Agreement, which is the legal document governing the merger. Each item in this summary references another section of this proxy statement with more detailed disclosure about that item. Throughout this proxy statement, all references to "Callidus," "we," "our," "us" and similar words refer to Callidus Software Inc. and its subsidiaries, unless otherwise indicated or the context otherwise requires. In addition, throughout this proxy statement, we refer to SAP America, Inc. as "SAP," to SAP SE as "SAP SE" and to Emerson One Acquisition Corp. as "Merger Sub."

The Companies (page 26)

Callidus Software Inc.

       Callidus was incorporated in 1996 in Delaware. Callidus, doing business as CallidusCloud®, is the global leader in cloud-based sales, marketing, learning, and customer experience solutions. Callidus enables organizations to accelerate and maximize their multi-product strategy with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate configure price quote, speed up contract negotiations, properly recognize revenue under ASC 606, and streamline sales compensation — driving bigger deals, faster. Over 6,400 leading organizations, across all industries, rely on Callidus to optimize their multi-product strategy to close more deals for more money in record time.

SAP America, Inc.

       SAP is a Delaware corporation, an indirect wholly-owned subsidiary of SAP SE and the principal U.S. operating subsidiary of SAP SE.

SAP SE

       SAP SE is a European Company (Societas Europaea or SE) established under the laws of the Federal Republic of Germany and the European Union. As the market leader in enterprise application software, SAP SE helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device — SAP SE empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP SE applications and services enable more than 378,000 business and public sector customers to operate profitably, adapt continuously, and grow sustainably.

Emerson One Acquisition Corp.

       Merger Sub is a Delaware corporation and wholly-owned subsidiary of SAP that was organized solely for the purpose of entering into the Merger Agreement and completing the merger and the other transactions contemplated by the Merger Agreement. Merger Sub has not conducted any business operations other than in connection with the transactions contemplated by the Merger Agreement. Upon consummation of the merger, Merger Sub will cease to exist as a separate corporation and Callidus will continue as the surviving corporation.

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Commercial Relationship Between the Companies

       Prior to entry into the Merger Agreement, Callidus entered into a services subscription agreement and a strategic OEM agreement with SAP. For further discussion regarding the commercial relationship between Callidus and SAP, see the section entitled "The Merger — Background to the Merger."

The Merger (page 27)

       Subject to the terms and conditions of the Merger Agreement and in accordance with Delaware law, at the effective time of the merger, Merger Sub, a wholly-owned subsidiary of SAP and a party to the Merger Agreement, will merge with and into Callidus; Callidus will survive the merger as a wholly-owned subsidiary of SAP and the separate corporate existence of Merger Sub will cease.

Special Meeting of Callidus's Stockholders (page 22)

       Date, Time and Place.    A special meeting of our stockholders will be held on                    , 2018, at our headquarters located at 4140 Dublin Boulevard, Suite 400, Dublin, California 94568, at 10:00 a.m., Pacific Time, to consider and vote upon:

•

a proposal to adopt the Merger Agreement;



•

a proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Callidus's named executive officers that is based on or otherwise relates to the merger ("compensation proposal"); and



•

a proposal to adjourn the special meeting to a later date, if our Board determines that it is necessary or appropriate and is permitted by the Merger Agreement, to solicit additional proxies if there is not a quorum present or there are not sufficient votes in favor of the adoption of the Merger Agreement at the time of the special meeting ("adjournment proposal").

       Record Date and Voting Power.    You are entitled to vote at the special meeting if you owned shares of our common stock at the close of business on                     , 2018, the record date for the special meeting. You will have one vote at the special meeting for each share of our common stock you owned at the close of business on the record date. There are            shares of our common stock outstanding and entitled to be voted at the special meeting.

       Quorum.    A quorum of stockholders is necessary to hold a valid special meeting. Under our bylaws, a quorum is present at the special meeting if the holders of a majority of the shares of our common stock outstanding and entitled to vote at a meeting of stockholders are represented in person or by proxy.

       Vote Required.    The adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding and entitled to vote on the Merger Agreement.

       Approval of the non-binding, advisory compensation proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock present in person or represented by proxy and entitled to vote on the compensation proposal at the special meeting.

       Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock present in person or represented by proxy and entitled to vote on the adjournment proposal at the special meeting (even if less than a quorum).

       In the event that a quorum is not present in person or represented by proxy at the special meeting, it is expected that the Board will recommend adjournment of the special meeting to solicit additional proxies if

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permitted by the Merger Agreement. If there is not a quorum of stockholders at the special meeting and the vote with respect to the adjournment proposal fails, then our Board, if permitted by the Merger Agreement, may set a new record date and meeting date for a special meeting to consider the Merger Agreement, compensation proposal and adjournment proposal.

Treatment of Outstanding Common Stock (page 63)

       The Merger Agreement provides that each share of our common stock outstanding immediately prior to the effective time of the merger will be converted at the effective time of the merger into the right to receive $36.00 in cash, without interest and less any withholding taxes required by applicable law.

       After the merger is completed, as a result of the merger, you will have the right to receive the merger consideration but you will no longer have any rights as a Callidus stockholder. Each Callidus stockholder will receive the merger consideration in exchange for the shares of Callidus common stock in accordance with the instructions contained in the letter of transmittal to be sent to Callidus stockholders as soon as reasonably practicable after the closing of the merger, unless the Callidus stockholder has properly demanded appraisal of its shares and not withdrawn the demand.

Treatment of Outstanding Stock Options, Restricted Stock Units and Performance-based Restricted Stock Units (page 63)

       Stock Options.    Each stock option (whether vested or unvested) that is unexpired, unexercised and outstanding at the effective time of the merger, without any further action of the parties or the optionholder, will be cancelled and converted into the right to receive an amount in cash equal to the product of (i) the aggregate number of shares subject to such stock option and (ii) the excess, if any, of the per share merger consideration of $36.00 over the applicable per share exercise price of such stock option (without interest and less any withholding taxes required by applicable law).

       Vested RSUs and PSUs.    Each time-based restricted stock unit ("RSU") or performance-based restricted stock unit ("PSU") that is vested (but not released or otherwise settled) at the effective time of the merger will be cancelled and exchanged for the right to receive the per share merger consideration of $36.00 for each share of our common stock underlying such RSU or PSU (without interest and less any withholding taxes required by applicable law).

       Unvested RSUs.    Each RSU granted prior to January 29, 2018 (other than RSUs held by our non-employee directors), that remains outstanding immediately prior to, and is not vested immediately prior to, the effective time of the merger will be cancelled in exchange for the unvested right to receive in cash the per share merger consideration of $36.00 for each share of our common stock underlying such RSU (without interest and less any withholding taxes required by applicable law), with such right to vest and become payable on the date upon which each such corresponding RSU would have vested under the time-based vesting terms and conditions set forth in the applicable award agreement or change of control agreement governing such RSU. If such terms and conditions are not satisfied and such right does not otherwise vest pursuant to the terms of the applicable award agreement or change of control agreement, no cash payment will be made with respect to such RSU.

       Unvested 2018 RSUs.    Each RSU granted on or after January 29, 2018, the Merger Agreement date (the "2018 RSUs") will be converted into a cash-settled restricted stock unit denominated in shares of SAP SE, pursuant to an exchange ratio determined based on SAP SE's average trading price over the five days immediately prior to the effective time of the merger, and will remain subject to the time and service-based vesting terms and conditions set forth in the applicable award agreement governing such 2018 RSU. Upon a given vesting date, the payment amount for the portion of each such 2018 RSU that vests will be determined based on SAP SE's average trading price over the five days immediately prior to the date upon

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which such portion would have vested under the time-based vesting terms and conditions set forth in the award agreement governing such 2018 RSU. Each such cash payment will be paid in the next practical payroll date after the applicable vesting date set forth in the award agreement governing the 2018 RSU, but not later than the month following such vesting date.

       Unvested PSUs.    Each PSU that remains outstanding immediately prior to, and is not vested immediately prior to, the effective time of the merger will be (i) deemed earned and credited for performance, as described in the section entitled "The Merger — Interests of Callidus Directors and Executive Officers in the Merger — Interests of Executive Officers" beginning on page 48 of this proxy statement, with respect to any uncompleted performance period as of the date of the Merger Agreement and (ii) cancelled in exchange for the unvested right to receive in cash the per share merger consideration of $36.00 for each share of our common stock underlying such PSU (after giving effect to the foregoing crediting of performance metrics), without interest and less any withholding taxes required by applicable law, with such payment to vest and become payable on the date upon which each such PSU would have vested under the time-based vesting terms and conditions applicable to such PSU immediately prior to the effective time of the merger. The pay-out levels set forth in the Merger Agreement (which were determined based on actual performance levels through 2017, except that uncompleted performance periods for PSUs granted in 2017 will be deemed to be earned at 100% of target, resulting in assumed 92% achievement for the full performance cycle). If such terms and conditions are not satisfied and such right does not otherwise vest pursuant to the terms of the applicable change of control agreement, no cash payment will be made with respect to such PSU.

       Unvested RSUs Held by Non-Employee Directors.    Each RSU held by our non-employee directors that is outstanding as of immediately prior to the effective time of the merger, whether vested or unvested, will be cancelled in exchange for the right to receive the per share merger consideration of $36.00 for each share of our common stock underlying such RSU (without interest), to be paid in cash in a single lump sum payment as soon as practicable (but in no event later than 30 days) following the effective time of the merger.

Treatment of Purchase Rights under Employee Stock Purchase Plan (page 64)

       Each current offering period in progress as of the date of the Merger Agreement under our Amended and Restated Employee Stock Purchase Plan ("ESPP") will continue after the date of the Merger Agreement and shares will be issued to participants thereunder on the next currently scheduled purchase dates that occur after the effective date of the Merger Agreement (subject to the terms and conditions of the ESPP). However, any offering period in progress as of the effective time of the merger will be shortened such that the last day of each such offering period will be two business days before the date on which the effective time of the merger occurs and each then outstanding purchase right under the ESPP will be exercised automatically at such time. No new offering period will commence under the ESPP at or after the date of the Merger Agreement, except following a valid termination of the Merger Agreement. Each purchased share under the ESPP will be converted at the effective time of the merger into the right to receive in cash the per share merger consideration of $36.00, without interest and less any withholding taxes required by applicable law. As of, or immediately prior to the effective time of the merger, we will terminate the ESPP.

Recommendation of Callidus's Board and Reasons for the Merger (page 34)

       At a meeting of our Board on January 29, 2018, our Board unanimously determined that the Merger Agreement and the merger are advisable, fair to and in the best interests of Callidus and its stockholders and unanimously approved the Merger Agreement. Our Board unanimously recommends that you vote "FOR" the adoption of the Merger Agreement, "FOR" the compensation proposal and "FOR" the adjournment proposal.

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       In the course of reaching its decision, our Board consulted with our senior management, reviewed a significant amount of information and considered a number of factors. For a discussion of the factors considered by our Board in reaching its decision to approve the Merger Agreement and recommend that our stockholders adopt the Merger Agreement, see "The Merger — Recommendation of Callidus's Board and Reasons for the Merger" beginning on page 34 of this proxy statement.

Opinion of Callidus's Financial Advisor (page 39 and Annex B)

       We retained Qatalyst Partners LP ("Qatalyst Partners") to act as our financial advisor in connection with the merger. We selected Qatalyst Partners to act as our financial advisor based on Qatalyst Partners' qualifications, expertise, reputation, its knowledge of our business and affairs and the industry in which we operate and its close familiarity with the Board, our business and management team, as well as Qatalyst Partners' prior experience representing other companies in transactions with SAP. Qatalyst Partners delivered its written opinion, dated as of January 29, 2018, that as of such date and based upon and subject to the considerations, limitations, qualifications, assumptions and other matters set forth therein, the $36.00 per share cash consideration to be received by the holders of Callidus common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement was fair, from a financial point of view, to such holders.

       The full text of the written opinion of Qatalyst Partners, dated as of January 29, 2018, is attached as Annex B and is incorporated by reference in this proxy statement in its entirety. See also "The Merger — Opinion of Callidus's Financial Advisor" beginning on page 39 of this proxy statement. 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 our Board and addresses only, as of the date of the opinion, the fairness from a financial point of view of the $36.00 per share cash consideration to be received by the holders of Callidus common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement, and it does not address any other aspect of the merger. It does not constitute a recommendation as to how any stockholder should vote with respect to the merger or any other matter and does not in any manner address the price at which our common stock will trade at any time. For a further discussion of Qatalyst Partners' opinion, see "The Merger — Opinion of Callidus's Financial Advisor" beginning on page 39 of this proxy statement.

Interests of Callidus Directors and Executive Officers in the Merger (page 47)

       When considering the recommendation of our Board, you should be aware that members of our Board and our executive officers have interests in the merger in addition to their interests as Callidus stockholders generally, as described below. These interests may be different from, or in conflict with, your interests as a Callidus stockholder, including interests arising from the following:

•

the Merger Agreement provides for cash merger consideration with respect to all stock options;



•

each of our non-employee directors is entitled to full acceleration of any unvested restricted stock units pursuant to the terms of his or her respective change of control agreement;



•

letter agreements between Callidus and certain of our executive officers executed in connection with the Merger Agreement clarify how performance goals will be measured at the effective time of the merger for purposes of determining pay-out levels;



•

certain of our executive officers are party to agreements with us that provide for cash severance and other benefits in the event of certain qualifying terminations of employment, including the

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acceleration of all unvested equity awards, in connection with a qualifying termination within 18 months of the merger; and

•

our directors and officers are entitled to continued indemnification and liability insurance following completion of the merger.

       The members of our Board were aware of the material facts as to these additional interests, and considered them, among other things, when they approved the Merger Agreement. For a discussion of the interests of Callidus directors and executive officers in the merger, see "The Merger — Interests of Callidus Directors and Executive Officers in the Merger" beginning on page 47 of this proxy statement.

Conditions to the Closing of the Merger (page 83)

       As more fully described in this proxy statement and in the Merger Agreement, the completion of the merger depends on a number of conditions being satisfied or waived (where legally possible). Our, SAP's and Merger Sub's obligations to effect the merger are subject to the satisfaction or waiver at or prior to the effective time of the merger of each of the following conditions (among others):

•

the adoption of the Merger Agreement by an affirmative vote of the holders of a majority of the outstanding shares of our common stock;



•

the expiration or earlier termination of the waiting period under the HSR Act;



•

the receipt of approval under certain other antitrust laws or the expiration of any mandatory waiting period related thereto; and



•

the absence of any order (whether temporary, preliminary or permanent) of a court of competent jurisdiction or any other governmental entity of competent jurisdiction restraining, enjoining or prohibiting the merger and the absence of any law that prevents the consummation of the merger.

       SAP's and Merger Sub's obligations to effect the merger are further subject to the satisfaction or waiver by SAP or Merger Sub at or prior to the effective time of the merger of the following conditions (among others):

•

the continued accuracy (subject to an enumerated dollar threshold) of certain of our representations and warranties related to our capitalization;



•

the continued accuracy in all material respects of certain "fundamental representations";



•

the continued accuracy of our representations and warranties other than those certain above-referenced representations and warranties, except as would not have a material adverse effect on us;



•

our performance in all material respects of all obligations and agreements contained in the Merger Agreement to be performed or complied with by us prior to or on the closing date; and



•

that a material adverse effect has not occurred and is not continuing.

       Our obligations to effect the merger are further subject to the satisfaction or waiver by us at or prior to the effective time of the merger of the following conditions:

•

the continued accuracy of the representations and warranties of SAP and Merger Sub, except for such failures as would not prevent the closing of the merger; and

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•

SAP's and Merger Sub's performance in all material respects of all obligations and agreements contained in the Merger Agreement to be performed or complied with by them prior to or on the closing date.

No Solicitation of Acquisition Proposals (page 76)

       The Merger Agreement restricts our ability to initiate, solicit, knowingly encourage or induce an acquisition proposal with respect to Callidus, or engage in discussions or negotiations with a third party regarding specified transactions involving Callidus. Notwithstanding these restrictions, prior to the time that our stockholders adopt the Merger Agreement, our Board may respond to a bona fide written acquisition proposal that our Board determines in good faith (after consultation with its outside legal counsel and financial advisor of nationally recognized reputation) is, or could reasonably be expected to result in, an acquisition proposal superior to the merger with SAP (as described under "The Merger Agreement — Covenants — No Solicitation of Acquisition Proposals" beginning on page 76) and with respect to which our Board determines in good faith (after consultation with its outside legal counsel and financial advisor of nationally recognized reputation) that failure to take action would be inconsistent with the Board's fiduciary duties, by furnishing information with respect to Callidus and by entering into discussions with the party or parties making the acquisition proposal, so long as we comply with the terms of the Merger Agreement.

       In addition, prior to the time our stockholders adopt the Merger Agreement, our Board may withdraw its recommendation of the Merger Agreement in connection with a superior proposal if it concludes in good faith (after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation) that in light of such superior proposal, the failure to change its recommendation would be inconsistent with its fiduciary duties to our stockholders, so long as we comply with the terms of the Merger Agreement. Our Board may also withdraw its recommendation of the Merger Agreement prior to the time our stockholders adopt the Merger Agreement in certain circumstances unrelated to an acquisition proposal if it concludes in good faith (after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation) that in light of an intervening event, the failure to do so would be inconsistent with its fiduciary duties to our stockholders, so long as we comply with the terms of the Merger Agreement.

Termination of the Merger Agreement (page 85)

       The Merger Agreement may be terminated under certain circumstances by both SAP and Callidus jointly and under other circumstances by either SAP or Callidus alone. The Merger Agreement may be terminated prior to the effective time under the following circumstances:

       by mutual written consent of Callidus and SAP;

       by either SAP or Callidus if:

•

the effective time of the merger has not occurred on or before the "Outside Date," which means July 30, 2018, except that the date may be extended for up to three months if all conditions to the consummation of the merger have been satisfied or waived, other than (i) the termination or expiration of any waiting period under the HSR Act, (ii) receipt of other antitrust or competition law approvals required under the Merger Agreement, (iii) existence of an order under any antitrust law prohibiting the closing of the merger, or (iv) existence of a pending action by a governmental entity that asserts, or the enactment or enforcement of a law that would result in, the illegality of, or placement of certain prohibitions or limitations on, the consummation of the merger or the ownership of Callidus by SAP;

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•

a court or governmental entity has issued a final order or taken a final action to permanently prohibit the merger; or



•

we fail to obtain stockholder approval of the merger;

       by Callidus if:

•

at any time prior to the adoption of the Merger Agreement by our stockholders, our Board determines to accept a superior proposal, and we are permitted to accept such superior proposal pursuant to the terms of the Merger Agreement, provided that we concurrently pay the termination fee to SAP as described below under the heading "— Termination Fee and Expenses;" or



•

an SAP representation or warranty is breached or SAP fails to perform a covenant contained in the Merger Agreement that would prevent closing of the merger and such breach or failure has not been or cannot be remedied within the specified cure period in the Merger Agreement;

       by SAP if:

•

our Board changes its recommendation with respect to adoption of the Merger Agreement or approves or recommends any acquisition proposal;



•

we fail to issue a press release that expressly reaffirms our Board recommendation within five business days after our receipt of a written request by SAP to provide such reaffirmation following a third party's acquisition proposal or declaration of its intent to issue an acquisition proposal, provided that SAP will be permitted only one such reaffirmation request per acquisition proposal;



•

a tender offer or exchange offer that constitutes an acquisition proposal is commenced, and our Board does not recommend that our stockholders reject the tender offer or exchange offer within a specified timeframe;



•

we breach the non-solicitation provisions of the Merger Agreement in any material respect;



•

we fail to include in this proxy statement our Board's recommendation for our stockholders to adopt the Merger Agreement;



•

we or our Board (or any committee thereof) resolves, authorizes or publicly proposes to do any of the actions specified above;



•

a Callidus representation or warranty is breached or Callidus fails to perform a covenant contained in the Merger Agreement so that the related closing conditions would not be satisfied and such breach or failure has not been or cannot be remedied within the specified cure period in the Merger Agreement; or



•

we experience a material adverse effect that cannot be remedied, or at least 20 business days have elapsed since the material adverse effect occurred.

Termination Fee and Expenses (page 87)

       We will be required to pay a termination fee of $75 million to SAP if at any time prior to the adoption of the Merger Agreement by our stockholders, our Board determines to terminate the Merger Agreement to accept a superior proposal pursuant to the terms of the Merger Agreement; provided, however, that

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such termination will not be effective unless we, concurrently with such termination, enter into the alternative acquisition agreement and pay the required termination fee. See "The Merger Agreement — Termination Fee and Expenses" beginning on page 87 of this proxy statement.

       We will be required to pay a termination fee of $75 million to SAP if the Merger Agreement is terminated by SAP for any of the reasons set forth in the first six bullets under the header above captioned "— Termination of the Merger Agreement — by SAP if."

       We will also be required to pay a termination fee of $75 million to SAP if:

•

the Merger Agreement is terminated by either SAP or us for any of the following reasons:



o

the Outside Date is reached, and (1) our stockholders have not adopted the Merger Agreement at the special meeting of stockholders or (2) SAP would then be entitled to terminate the Merger Agreement as a result of our willful breach of the Merger Agreement;



o

our stockholders do not adopt the Merger Agreement at the special meeting of stockholders; or



o

a willful breach of the Merger Agreement by us; and



•

prior to the date of such termination of the Merger Agreement, an acquisition proposal has been made known to us or publicly disclosed (and not publicly withdrawn prior to such termination) and concurrently with, or within 12 months after, such termination, we either (i) consummate a transaction that constitutes an acquisition proposal, or (ii) enter into a definitive agreement to engage in a transaction or a tender offer is commenced that, in either case, constitutes an acquisition proposal, and such transaction or tender offer is subsequently consummated or completed (whether or not such consummation or completion occurs before or after the 12-month period following such termination). However, if the party with which a transaction or tender offer is ultimately consummated is the same party that made an acquisition proposal prior to the termination of the Merger Agreement, the requirement that a breach by us be "willful," in the first and third sub-bullets of the preceding bullet will be disregarded for purposes of determining if SAP if entitled to the termination fee.

       Solely for purposes of this paragraph, an acquisition proposal is an offer or proposal concerning, for or relating to (1) the purchase of, or commencement of a tender offer that if consummated would result in the acquisition of, 50% or more of our equity interests of voting securities; (2) the acquisition of 50% or more of any class of equity or other voting security of one or more of our subsidiaries, which subsidiaries individually or in the aggregate generate 50% or more of our consolidated net revenues or net income or constitute more than 50% of our consolidated assets; (3) a merger, consolidation, business combination or another similar transaction, involving us or one or more of our subsidiaries, the businesses of which individually or in the aggregate generate or constitute 50% or more of our consolidated net revenues or net income or assets, where our stockholders or the stockholders of our subsidiaries, as applicable, immediately preceding such transaction would hold less than 50% of the stock or the voting securities in the surviving entity of such transaction; (4) the liquidation, dissolution, recapitalization or reorganization of Callidus or any of our subsidiaries other than a wholly-owned subsidiary; (5) the sale of our or our subsidiaries' assets which assets generate 50% or more of our consolidated net revenues or net income or constitute more than 50% of our consolidated assets; or (6) any combination of the foregoing.

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Guaranty

       Pursuant to the terms of the Merger Agreement, SAP SE has absolutely, irrevocably and unconditionally guaranteed the payment and performance of SAP's and Merger Sub's obligations under the Merger Agreement (including liabilities for a breach by SAP or Merger Sub of their obligations).

Regulatory Matters (page 60)

       The HSR Act prohibits us from completing the merger until we have furnished certain information and materials to the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission and the required waiting period has expired or been terminated. On February 12, 2018, the parties filed their respective notification and report forms pursuant to the HSR Act with the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission. On                    , 2018, the U.S. Department of Justice and the Federal Trade Commission terminated the waiting period under the HSR Act.

       The merger is also subject to review by the governmental authorities of various other jurisdictions under the antitrust or competition laws of those jurisdictions. Affiliates of SAP and Callidus conduct business outside of the United States.

•

German Antitrust Law: The Act against Restraints of Competition requires SAP and Callidus to file a notification with the Federal Cartel Office ("FCO") and provides that the merger shall not occur until a one-month waiting period has expired or otherwise been terminated. The parties filed such notification with the FCO in connection with the merger on                    , 2018.



•

Austrian Antitrust Law: Under the Austrian Cartel Act, the merger may not be completed until the expiration of a four-week waiting period following the filing of a notification with the Austrian Federal Competition Authority ("FCA"), unless the waiting period is terminated early. The parties filed such notification with the FCA in connection with the merger on                    , 2018.



•

Cyprus Antitrust Law: The Control of Concentrations Between Undertakings Law No. 83(I) of 2014 (Concentrations Law) requires SAP and Callidus to file a notification with the Commission of the Protection of Competition ("CPC") and provides that the merger shall not occur until a one-month waiting has expired or otherwise been terminated. The parties filed such notification with the CPC in connection with the merger on                    , 2018.

Based on a review of the information currently available relating to the countries and businesses in which SAP and Callidus are engaged, SAP and Callidus believe that no other mandatory antitrust premerger notification filing is required.

Market Prices and Dividend Data (page 21)

       Our common stock is listed on The Nasdaq Stock Market under the symbol "CALD." On January 29, 2018, the last full trading day before the public announcement of the merger, the closing price for our common stock was $32.70 per share, and on                    , 2018, the latest practicable trading day before the printing of this proxy statement, the closing price for our common stock was $            per share.

       We have never paid cash dividends on our common stock.

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Certain U.S. Federal Income Tax Consequences of the Merger (page 57)

       The conversion of shares of our common stock into the right to receive $36.00 per share of cash merger consideration generally will be a taxable transaction to our U.S. stockholders for U.S. federal income tax purposes. See "The Merger — Certain U.S. Federal Income Tax Consequences of the Merger" beginning on page 57 of this proxy statement.

       Tax matters can be complicated, and the tax consequences of the merger to you will depend on your particular circumstances. We strongly recommend that you consult your own tax advisor to determine how the merger will affect you.

Appraisal Rights (page 53)

       If the merger is completed, holders of Callidus common stock will be entitled to appraisal rights under Section 262 of the Delaware General Corporation Law ("DGCL"). A holder who is entitled to demand appraisal may elect to pursue his or her appraisal rights to receive the judicially determined fair value of his or her shares, which could be more or less than, or the same as, the per share merger consideration for the common stock, but only if he or she has properly demanded appraisal for such shares in accordance with, and complied in all respects with, Section 262 of the DGCL. For a more detailed discussion of appraisal rights and the requirements for properly demanding such rights, see "The Merger — Appraisal Rights" beginning on page 53 of this proxy statement and Annex C to this proxy statement. An executed proxy that is not marked "AGAINST" or "ABSTAIN" will, unless revoked, be voted "FOR" the adoption of the Merger Agreement and will disqualify the stockholder submitting that proxy from demanding appraisal rights.

       A copy of Section 262 of the DGCL is included as Annex C to this proxy statement.

       ANY CALLIDUS STOCKHOLDER WHO WISHES TO EXERCISE APPRAISAL RIGHTS OR WHO WISHES TO PRESERVE HIS, HER OR ITS RIGHT TO DO SO SHOULD REVIEW ANNEX C CAREFULLY AND IN ITS ENTIRETY AND SHOULD CONSULT HIS, HER OR ITS LEGAL ADVISOR, SINCE FAILURE TO TIMELY AND PROPERLY COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH RIGHTS.

Additional Information (page 95)

       You can find more information about Callidus in the periodic reports and other information we file with the SEC. The information is available at the SEC's public reference facilities and at the website maintained by the SEC at www.sec.gov. For a more detailed description of the additional information available, see "Where You Can Find More Information" beginning on page 95 of this proxy statement.

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MARKET PRICES AND DIVIDEND DATA

       Our common stock is listed on The Nasdaq Stock Market under the symbol "CALD." This table shows, for the periods indicated, the range of intraday high and low per share sales prices for our common stock as reported on The Nasdaq Stock Market.

       The following table sets forth the closing price per share of our common stock, as reported on The Nasdaq Stock Market on January 29, 2018, the last full trading day before the public announcement of the merger, and on                        , 2018, the latest practicable trading day before the printing of this proxy statement:

       You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock. If the merger is consummated, there will be no further market for our common stock and our common stock will be delisted from The Nasdaq Stock Market and deregistered under the Exchange Act.

Dividends

       We have never paid cash dividends on our common stock. In the event that the merger is not consummated, we would expect to retain earnings, if any, to fund the development and growth of our business and would not anticipate paying cash dividends on our common stock in the foreseeable future. In the event that the merger is not consummated, our payment of any future dividends would be at the discretion of our Board after taking into account various factors, including our financial condition, operating results, cash needs and growth plans.

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THE SPECIAL MEETING

       The enclosed proxy is solicited on behalf of our Board for use at the special meeting of stockholders or at any adjournment or postponement thereof.

Date, Time and Place

       We will hold the special meeting at our headquarters located at 4140 Dublin Boulevard, Suite 400, Dublin, California 94568, at 10:00 a.m., Pacific Time, on                        , 2018.

Purpose of the Special Meeting

       At the special meeting, we will ask the holders of our common stock to (i) adopt the Agreement and Plan of Merger, dated as of January 29, 2018, by and among SAP America, Inc., a Delaware corporation ("SAP"), Emerson One Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of SAP ("Merger Sub"), and Callidus, as such agreement may be amended from time to time ("Merger Agreement"); (ii) approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Callidus's named executive officers based on or otherwise relating to the merger ("compensation proposal"); and (iii) approve the adjournment of the special meeting to a later date, if our Board determines that it is necessary or appropriate and is permitted by the Merger Agreement, to solicit additional proxies if there is not a quorum present or there are not sufficient votes in favor of the adoption of the Merger Agreement at the time of the special meeting ("adjournment proposal").

Record Date; Shares Entitled to Vote; Quorum

       Only holders of record of our common stock at the close of business on                        , 2018, the record date, are entitled to notice of, and to vote at, the special meeting. On the record date, shares of our common stock were issued and outstanding and held by approximately            holders of record. Holders of record of our common stock on the record date are entitled to one vote per share at the special meeting on each of the proposals.

       A majority of the outstanding shares of common stock must be present or represented at the special meeting in order to have a quorum for the conduct of business. Votes cast at the special meeting, by proxy or in person, will be tabulated by the inspector of elections appointed for the special meeting. If shares are present at the special meeting in person or by proxy, but are not voted, those shares will count toward determining whether or not a quorum is present for the conduct of business at the Meeting, as will all shares voted "for", "against" or "abstain" on a proposal.

       In the event that a quorum is not present in person or represented by proxy at the special meeting, it is expected that the Board will recommend adjournment of the special meeting to solicit additional proxies if permitted by the Merger Agreement. If there is not a quorum of stockholders at the special meeting and the vote with respect to the adjournment proposal fails, our Board, if permitted by the Merger Agreement, may set a new record date and meeting date for a special meeting to consider the Merger Agreement, compensation proposal and adjournment proposal.

Vote Required

       The adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding and entitled to vote on the Merger Agreement at the close of business on the record date. Adoption of the Merger Agreement is a condition to the closing of the merger.

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       The affirmative vote of the holders of a majority of the shares of common stock present in person or represented by proxy and entitled to vote on the compensation proposal at the special meeting will constitute approval of the compensation proposal on an advisory basis. Our Board will consider the result of this vote, but because the proposal is advisory only it will not be binding on either Callidus or SAP.

       Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy and entitled to vote on the adjournment proposal at the special meeting (even if less than a quorum).

Voting by Callidus Directors and Executive Officers

       At the close of business on the record date, our directors and executive officers and their affiliates owned and were entitled to vote             shares of our common stock, which represented approximately        % of the shares of our outstanding common stock on that date. We expect that these directors and executive officers will vote all of their shares of our common stock "FOR" adoption of the Merger Agreement, "FOR" the advisory compensation proposal and "FOR" the adjournment proposal.

       Certain members of our management and our Board have interests in the merger that are in addition to those of stockholders generally and may be different from, or in conflict with, your interests as a Callidus stockholder. See the section entitled "The Merger — Interests of Callidus Directors and Executive Officers in the Merger" beginning on page 47 of this proxy statement.

Voting of Proxies

       If your shares are registered in your name, you may cause your shares to be voted at the special meeting by returning a signed proxy card or voting in person at the meeting. Additionally, you may submit a proxy authorizing the voting of your shares via the Internet at www.proxyvote.com or by telephone by calling (800) 690-6903. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy via the Internet or by telephone.

       If your shares are registered in your name and you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the meeting. If your shares are registered in your name, you are encouraged to submit a proxy card even if you plan to attend the special meeting in person.

       Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted "FOR" the adoption of the Merger Agreement, "FOR" the compensation proposal and "FOR" the adjournment proposal; provided, however, that no proxy that is specifically marked "AGAINST" the proposal to adopt the Merger Agreement will be voted "FOR" the compensation proposal or "FOR" the adjournment proposal unless it is specifically marked "FOR" the compensation proposal or "FOR" the adjournment proposal, respectively.

       If your shares are held in "street name" through a brokerage firm, bank, trust or other nominee, you may provide voting instructions by completing and returning the voting form provided by your nominee or via the Internet or by telephone through your nominee, if such a service is provided. To provide voting instructions via the Internet or telephone, you should follow the instructions on the voting form provided by your nominee. If you plan to attend the special meeting, you will need a proxy from your nominee in order to be given a ballot to vote the shares. If you do not return your nominee's voting form, provide voting instructions via the Internet or by telephone through your nominee or attend the special meeting and vote in person with a proxy from your nominee, it will have the same effect as if you voted

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"AGAINST" the adoption of the Merger Agreement, and will have no effect on the compensation proposal or the adjournment proposal.

Revocability of Proxies

       Any proxy you give pursuant to this solicitation may be revoked by you at any time before it is voted. Proxies may be revoked as follows:

       If you have sent a proxy directly to Callidus, you may revoke it by:

•

delivering a written revocation of the proxy or a later dated, signed proxy card, to our General Counsel at 4140 Dublin Boulevard, Suite 400, Dublin, California 94568, on or before the business day prior to the special meeting;



•

delivering a new, later dated proxy via the Internet or by telephone until the date set forth in the instructions for voting via the Internet or by telephone;



•

delivering a written revocation or a later dated, signed proxy card to us at the special meeting prior to the taking of the vote on the matters to be considered at the special meeting; or



•

attending the special meeting and voting in person.

       If you have instructed a broker or nominee to vote your shares, you may revoke your proxy only by following the directions received from your broker or nominee to change those instructions.

       Your attendance at the special meeting does not alone automatically revoke your proxy. If you have instructed your brokerage firm, bank, trust or other nominee how to vote your shares, the above-described options for revoking your proxy do not apply. Instead, you must follow the directions provided by your brokerage firm, bank, trust or other nominee to change your vote.

Board's Recommendations

       Our Board has unanimously approved the Merger Agreement and determined that the Merger Agreement and the merger are advisable, fair to and in the best interests of Callidus and its stockholders. Our Board unanimously recommends that Callidus stockholders (i) vote "FOR" the proposal to adopt the Merger Agreement, (ii) vote "FOR" the advisory compensation proposal and (iii) vote "FOR" the adjournment proposal. See "The Merger — Recommendation of Callidus's Board and Reasons for the Merger" beginning on page 34 of this proxy statement. Callidus stockholders should carefully read this proxy statement in its entirety for more detailed information concerning the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger. In addition, Callidus stockholders are directed to the Merger Agreement, which is attached as Annex A to this proxy statement.

Effect of Abstentions and Broker Non-Votes

       Abstentions and shares not in attendance at the special meeting and not voted by proxy will have the same effect as a vote "AGAINST" the proposal to adopt the Merger Agreement. Abstentions will have the same effect as a vote "AGAINST" the advisory compensation proposal and the adjournment proposal. Shares not in attendance at the special meeting and not voted by proxy will have no effect on the advisory compensation proposal or the adjournment proposal. Because brokerage firms, banks, trusts or other nominees holding shares of Callidus common stock in "street name" may not vote your shares of Callidus common stock on the adoption of the Merger Agreement, the compensation proposal or the adjournment proposal unless you provide instructions on how to vote, your failure to provide instructions will result in your shares not being present at the meeting and not being voted on those proposals. It is very important

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that all of our stockholders vote their shares, so please promptly complete and return the enclosed proxy card.

Solicitation of Proxies

       This proxy solicitation is being made by Callidus on behalf of the Board and will be paid for by Callidus. Our directors, officers and employees may also solicit proxies by personal interview, mail, e-mail, telephone, facsimile or other means of communication. These persons will not be paid additional remuneration for their efforts. We have also retained D.F. King & Co., Inc. to assist in the solicitation of proxies for a fee of $12,500 plus the reimbursement of out-of-pocket expenses incurred on behalf of Callidus. You should not send your stock certificates with your proxy card. A letter of transmittal with instructions for the surrender of your stock certificates, if any, will be mailed to our stockholders as soon as practicable after completion of the merger.

Stockholder List

       A list of our stockholders entitled to vote at the special meeting will be available for examination by any Callidus stockholder at the special meeting. For 10 days prior to the special meeting, this stockholder list will be available for inspection by any stockholder for any purpose germane to the special meeting during ordinary business hours at our corporate offices located at 4140 Dublin Boulevard, Suite 400, Dublin, California 94568.

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THE COMPANIES

Callidus Software Inc.
4140 Dublin Boulevard, Suite 400
Dublin, California 94568
Telephone: (925) 251-2200

       Callidus was incorporated in 1996 in Delaware. Callidus, doing business as CallidusCloud®, is the global leader in cloud-based sales, marketing, learning, and customer experience solutions. Callidus enables organizations to accelerate and maximize their multi-product strategy with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate configure price quote, speed up contract negotiations, properly recognize revenue under ASC 606, and streamline sales compensation — driving bigger deals, faster. Over 6,400 leading organizations, across all industries, rely on Callidus to optimize their multi-product strategy to close more deals for more money in record time.

SAP America, Inc.
3999 West Chester Pike
Newtown Square, Pennsylvania 19073
Telephone: (610) 661-1000

       SAP is a Delaware corporation, an indirectly wholly-owned subsidiary of SAP SE and the principal U.S. operating subsidiary of SAP SE.

       SAP SE
Dietmar-Hopp-Allee 16
69190 Walldorf
Germany
Telephone: +49-6227-7-47474

       SAP SE is a European Company (Societas Europaea or SE) established under the laws of the Federal Republic of Germany and the European Union. As the market leader in enterprise application software, SAP SE helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device — SAP SE empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP SE applications and services enable more than 378,000 business and public sector customers to operate profitably, adapt continuously, and grow sustainably.

       Emerson One Acquisition Corp.
3999 West Chester Pike
Newtown Square, Pennsylvania 19073
Telephone: (610) 661-1000

       Merger Sub is a Delaware corporation and wholly-owned subsidiary of SAP that was organized solely for the purpose of entering into the Merger Agreement and completing the merger and the other transactions contemplated by the Merger Agreement. Merger Sub has not conducted any business operations other than in connection with the transactions contemplated by the Merger Agreement. Upon consummation of the merger, Merger Sub will cease to exist as a separate corporation and Callidus will continue as the surviving corporation.

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THE MERGER

       The following discussion describes material aspects of the merger. While we believe that the following description covers the material terms of the merger, the description may not contain all of the information that may be important to you. The discussion of the merger in this proxy statement is qualified in its entirety by reference to the Merger Agreement, which is attached as Annex A to this proxy statement and incorporated by reference into this proxy statement. We encourage you to read carefully this entire proxy statement, including the Merger Agreement, for a more complete understanding of the merger.

Background to the Merger

       Our Board, together with our management and with the assistance of our advisors, has from time to time reviewed and considered various strategic and other opportunities available to Callidus to enhance stockholder value. These reviews included discussions as to whether the continued execution of our strategy as a standalone company or the possible sale of Callidus to a third party offered the best avenue to maximize stockholder value, and the potential benefits and risks of any such course of action.

       At the end of the second quarter of 2016, SAP became a customer of Callidus pursuant to a services subscription agreement, and in the second half of 2016, we entered into a strategic OEM agreement with SAP to integrate certain Callidus solutions with SAP solutions to drive sales performance. As part of these commercial relationships, our management team regularly communicated and met with SAP.

       On July 20, 2017, in Walldorf, Germany, Christian Klein, executive vice president and chief operating officer at SAP, met with Leslie Stretch, our president and chief executive officer, and Martin Schleipfer, our senior account executive. At the meeting, Mr. Klein discussed the success of the SAP-Callidus commercial partnership and his belief that SAP and Callidus share common cultural values. Mr. Klein did not make any specific proposal regarding a potential transaction at that time.

       On July 27, 2017, our Board held a regularly scheduled board meeting, with participation from representatives of Qatalyst Partners and Fenwick & West. Qatalyst Partners had been invited to the meeting in order to deliver a presentation updating our Board on the market environment and providing a perspective on potential strategic combinations within the sector, but had not been formally engaged to represent Callidus in any such transaction at such time. During the meeting, Mr. Stretch discussed his conversations with SAP and updated our Board on our strategic relationship with SAP. Our Board discussed establishing a process, including a subcommittee of our Board, to facilitate any consideration of an offer by SAP, if received. Representatives of Qatalyst Partners delivered their presentation and led a discussion regarding other companies that could have a strategic interest in acquiring Callidus.

       On August 29, 2017, in Danville, California, Arlen Shenkman, SAP's executive vice president, global business development and ecosystems, met with Mr. Stretch. At the meeting, Mr. Shenkman indicated that SAP might be interested in pursuing an acquisition of Callidus. However, Mr. Shenkman did not provide a specific proposal or initiate formal discussions regarding such a transaction.

       On September 19, 2017, in Las Vegas, Nevada, at a business conference hosted by Callidus for its customers, executives from SAP and Callidus met to discuss the existing commercial partnership between the two companies and also publicly announced the launch of an integrated solution combining the CallidusCloud Configure Price Quote and the SAP Hybris Cloud for Customer solutions. On the same date, Mr. Stretch met with Mr. Shenkman and Rob Enslin, SAP executive board member and president, business cloud group. Mr. Shenkman and Mr. Enslin indicated that SAP was considering making a proposal to acquire Callidus. Mr. Stretch stated that he would discuss any such offers with our Board. Mr. Shenkman asked Mr. Stretch for a meeting with our executive team, including Mr. Stretch, Roxanne Oulman, our chief financial officer and Giles House, our chief product officer, to review our business in

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more detail and confirm their view of our business. The next day, Mr. Shenkman sent Mr. Stretch a draft agenda for the meeting and, noting that they would like to discuss non-public information, a draft mutual non-disclosure agreement. On September 21, 2017, SAP and Callidus negotiated and entered into a mutual non-disclosure agreement, which included a 12-month standstill. The standstill provision did not restrict SAP from making confidential proposals to, or from requesting a waiver of the standstill from, our Board.

       On September 22, 2017, Mr. Stretch and Ms. Oulman spoke with representatives of Qatalyst Partners about the discussions with SAP. Also on September 22, 2017, our Board held a special meeting, together with representatives of Qatalyst Partners. At the meeting, Mr. Stretch updated our Board on discussions with SAP. Additionally, representatives of Qatalyst Partners provided our Board with an overview of the market landscape, including recent trends and market outlook as well as the mergers and acquisitions environment for technology companies, particularly SaaS companies. Our Board further discussed SAP's interest in Callidus and the possibility that it would make a formal proposal. At the meeting, our Board established a Strategic Advisory Committee of the Board, consisting of Chuck Boesenberg, Kevin Klausmeyer and Mr. Stretch, to work with our management and our outside advisors, and to facilitate our Board's consideration and review of strategic options for Callidus.

       On September 25, 2017, Mr. Stretch, Ms. Oulman and Mr. House met with representatives of SAP to provide a confidential overview of our operations, customers and financial performance.

       On September 26, 2017, the Strategic Advisory Committee held a meeting, together with representatives of Qatalyst Partners and members of our management. At the meeting, Mr. Stretch updated the Strategic Advisory Committee on the management meeting with SAP on September 25. Additionally, representatives of Qatalyst Partners discussed customary process steps in a potential strategic combination, including outreach to potentially interested parties, due diligence and negotiation of a definitive agreement.

       On September 27, 2017, our Board held a special meeting, during which Mr. Stretch updated our Board on the September 25 meeting with SAP. Our Board further discussed retaining a financial advisor to represent Callidus in our negotiations with SAP and our investigation of potential alternative strategic transactions. Our Board considered Qatalyst Partners' qualifications, expertise and reputation, its knowledge of our industry and its close familiarity with the Board, our business and management team, as well as Qatalyst Partners' prior experience representing other companies in transactions with SAP. Following such consideration, our Board determined to engage Qatalyst Partners as its financial advisor with respect to any sale, transfer or other disposition of majority ownership of the capital stock of Callidus or a majority of the assets of Callidus.

       On October 11, 2017, we entered into an agreement to formally engage Qatalyst Partners as our exclusive financial advisor with respect to a potential change of control transaction.

       On October 23, 2017, at its regularly scheduled board meeting, our Board discussed, among other things, the prospects for a potential sale transaction. Representatives of Fenwick & West attended the meeting and reviewed with our Board its fiduciary duties in considering a potential change of control transaction.

       The board meeting continued on October 24, 2017, with participation from representatives of Qatalyst Partners and Fenwick & West. At the meeting, our management and the Board discussed our financial plan for fiscal years 2017 through 2020. In addition, representatives of Qatalyst Partners made a presentation regarding a preliminary valuation of Callidus. Our Board, with input from representatives of Qatalyst Partners, discussed our business prospects on a stand-alone basis. Our Board also discussed raising additional capital as a means of expanding our operations.

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       On October 26, 2017, Mr. Stretch spoke with Mr. Enslin, and Mr. Enslin reiterated SAP's interest in a strategic transaction with Callidus. However, Mr. Enslin did not provide a specific proposal at this time.

       On November 6, 2017, Mr. Stretch contacted Mr. Shenkman to follow up on the management meeting of September 25, 2017. Mr. Shenkman indicated that SAP was still evaluating the opportunity and did not have any further update at that time, but indicated that SAP would respond within two weeks.

       On November 24, 2017, Mr. Stretch again followed up with Mr. Shenkman, and Mr. Shenkman indicated that SAP would send a proposal by the end of the following week.

       On November 30, 2017, SAP delivered to us a written non-binding preliminary indication of interest proposing an all-cash acquisition of Callidus at a price of $34.00 per share. The indication of interest noted that this valuation represented a premium of 28% to our 90-day volume-weighted average price and a premium of 13% to our 52-week high price. The indication of interest stated that SAP's proposed transaction would not be subject to any financing contingency. The indication of interest also stated that in order for SAP to proceed with its due diligence of Callidus and negotiation of a potential transaction, SAP would require that we agree to a 30-day exclusivity period. Later that day, our Strategic Advisory Committee held a special meeting, with representatives of Qatalyst Partners and Fenwick & West in attendance, to discuss the indication of interest submitted by SAP, and scheduled a special meeting of our full Board on the following day. On November 30, 2017, the closing price for shares of our common stock was $29.28, and the $34.00 offer price represented a 16% premium to the closing price.

       On December 1, 2017, our Board held a meeting, together with representatives of Qatalyst Partners and Fenwick & West. The representatives of Fenwick & West reviewed with our Board its fiduciary duties in the context of evaluating the SAP proposal. Our Board discussed with our management our business prospects on a stand-alone basis. The representatives of Qatalyst Partners made a presentation regarding a preliminary valuation of Callidus, and the financial aspects of SAP's proposal of $34.00 per share. Following such discussion, our Board determined that SAP's proposal of $34.00 per share represented insufficient value and instructed Mr. Stretch and Qatalyst Partners to negotiate with SAP to seek a higher purchase price, and that a higher price was necessary in order for Callidus to agree to enter into an exclusivity agreement at this time. Our Board also discussed other potential companies that might have the strategic interest and financial resources to acquire Callidus, and determined that only four other parties would likely have sufficient strategic interest and financial resources to consider acquiring Callidus, which we refer to in this proxy statement as Party A, Party B, Party C and Party D. Our Board further concluded that it was not advisable to contact additional parties that would be less likely to have such resources or interest, because such contacts would be unlikely to result in an attractive offer and would increase the risk of a public disclosure regarding our consideration of a potential acquisition transaction, resulting in potentially significant adverse effects on our business. Accordingly, our Board directed representatives of Qatalyst Partners to reach out to each of those companies regarding a potential acquisition transaction. Later that day, representatives of Qatalyst Partners contacted Party A, Party B, Party C and Party D via email. Later that same evening, representatives of Qatalyst Partners spoke to a representative of Party A by phone regarding their interest in a potential acquisition of Callidus.

       On December 2, 2017, representatives of Qatalyst Partners spoke to a representative of Party C by phone regarding their interest in a potential acquisition of Callidus.

       On December 4, 2017, representatives of Qatalyst Partners spoke to a representative of Party B by phone regarding their interest in a potential acquisition of Callidus. Later the same day, representatives of Qatalyst Partners spoke by phone a second time with a representative of Party B and had a separate phone call with a representative of Party A. Representatives of both Party A and Party B informed representatives of Qatalyst Partners that they were not interested in pursuing an acquisition of Callidus.

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       On December 5, 2017, Mr. Stretch called Mr. Shenkman and informed him that SAP's offer of $34.00 per share represented insufficient value for our shareholders, and noted that our Board anticipated that it would report strong performance for our fourth fiscal quarter. Mr. Stretch emphasized our Board's belief in our prospects as a standalone company and execution of our strategic vision. Mr. Shenkman reiterated SAP's interest in acquiring Callidus.

       On December 6, 2017, a representative of Qatalyst Partners contacted Mr. Shenkman and reiterated this message. The parties discussed the elements of a proposal that might be acceptable to our Board, including an increased purchase price, expedited deal timing and key protections around the certainty of closing the transaction. Later on the same day, representatives of Qatalyst Partners spoke with a representative of Party D by phone regarding its interest in a potential acquisition of Callidus.

       On December 8, 2017, Party C informed representatives of Qatalyst Partners that it was not interested in pursuing an acquisition of Callidus.

       On December 8, 2017, a reporter attempted to contact a representative of Qatalyst Partners to indicate that she had heard rumors about a potential sale transaction and to solicit feedback about such rumors. No representative of Qatalyst Partners responded to this inquiry.

       Also on December 8, 2017, a representative from Party E, a financial sponsor, contacted representatives of Qatalyst Partners and indicated that Party E had heard that Callidus was engaged in discussions with potential acquirors about a potential sale, and that Party E would like to participate in such discussions. A representative of Qatalyst Partners responded that while it regularly advised Callidus on strategic matters, Qatalyst Partners would not comment on whether Callidus was engaged in such discussions, but that our Board would consider a compelling offer from Party E with respect to an acquisition proposal. Later that day, Party E reached out to Mr. Stretch, and he responded similarly that our Board would consider any compelling offer.

       Later on December 8, 2017, the Strategic Advisory Committee held a special meeting, with representatives of Qatalyst Partners and Fenwick & West. The committee discussed Party E's communications with Mr. Stretch and representatives of Qatalyst Partners, and the Strategic Advisory Committee instructed Qatalyst Partners to engage with Party E to determine their interest in an acquisition of Callidus.

       On December 9, 2017, at the direction of the Strategic Advisory Committee, a representative from Qatalyst Partners discussed a potential acquisition of Callidus with Party E.

       On December 11, 2017, our Board held a meeting, with representatives of Qatalyst Partners and Fenwick & West. Mr. Stretch reported to the Board on his discussions with Mr. Shenkman on December 5, 2017 and reviewed the events of December 8, 2017. Representatives of Qatalyst Partners also provided an update on the outreach to parties potentially interested in a potential acquisition of Callidus. Our Board also discussed the recent communications with the other parties contacted regarding a potential acquisition of Callidus, and the fact that each of the parties (other than Party D, who had not responded to our inquiries) had stated that they were not interested in pursuing an acquisition of Callidus.

       On December 12, 2017, Party E informed a representative of Qatalyst Partners that Party E did not intend to pursue an acquisition of Callidus.

       On December 13, 2017, representatives of Qatalyst Partners contacted Mr. Shenkman to ask for a revised indication of interest. On December 15, 2017, Mr. Shenkman responded that SAP would have a meeting of its Executive Board, and that Callidus should expect a response from SAP on December 18, 2017.

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       On December 18, 2017, SAP delivered to us a revised written non-binding preliminary indication of interest proposing an all-cash acquisition of Callidus at a price of $35.00 per share. In its revised indication of interest, SAP stated that it would not proceed with the negotiation of a transaction at the increased price of $35.00 per share or start their due diligence exercise unless Callidus agreed to a 30-day exclusivity period, and attached a proposed exclusivity agreement.

       Later that day, our Board held a meeting, together with representatives of Qatalyst Partners and Fenwick & West. Representatives of Qatalyst Partners discussed with our Board the financial aspects of SAP's proposal of $35.00 per share. Our Board discussed with our management our business prospects on a stand-alone basis. Our Board determined that SAP's proposal of $35.00 per share represented insufficient value, and instructed representatives of Qatalyst Partners to submit a counteroffer to SAP at $37.50 per share.

       On December 19, 2017, representatives of Qatalyst Partners delivered a counteroffer to SAP at $37.50 per share.

       On December 21, 2017, Mr. Shenkman contacted Mr. Stretch and representatives of Qatalyst Partners and informed them that SAP would submit a best and final offer of $36.00 per share. A representative of Qatalyst Partners reached out to Mr. Shenkman later in the day and encouraged Mr. Shenkman to consider a higher offer, and indicated that the Board may find an offer of $36.00 per share to represent insufficient value for our stockholders. Mr. Shenkman reiterated that the $36.00 per share was SAP's best and final offer. Subsequently, SAP delivered to us a final written non-binding preliminary indication of interest proposing an all-cash acquisition of Callidus at a price of $36.00 per share. The final indication of interest again insisted that Callidus agree to a 30-day exclusivity period, and said that SAP would not proceed with the negotiation of a transaction at the increased price of $36.00 unless we entered into an exclusivity agreement with SAP.

       Later that day, our Board held a meeting, with representatives of Qatalyst Partners and Fenwick & West participating. The representatives of Qatalyst Partners discussed with our Board the financial aspects of SAP's revised proposal of $36.00 per share. Our Board and Qatalyst Partners discussed whether there were any other potential acquirers for Callidus that would be in a position to consummate a transaction on better terms than those offered by SAP and, following such discussion, our Board determined that the parties already contacted by Callidus and Qatalyst Partners were the most likely candidates for any such transaction with Callidus. Our Board discussed the merits and risks of contacting other parties, including the risk of SAP withdrawing its indication of interest and the likelihood of being able to find a potential buyer that would make a higher offer at this time, as well as the risk of a public disclosure that could harm our business. Our Board also discussed SAP's requirement that Callidus agree to a 30-day exclusivity arrangement in order for SAP to proceed. Our Board and representatives of Fenwick & West discussed the circumstances under which Callidus would be entitled to negotiate with third parties making an acquisition proposal after an agreement with SAP was signed, and the circumstances under which our Board could exercise its fiduciary duties to terminate an executed merger agreement with SAP and accept a competing proposal. After further discussion, and taking into consideration its discussions with our management and representatives of Qatalyst Partners and Fenwick & West, and the increase in price offered by SAP, our Board determined that it would be in the best interests of Callidus's stockholders to proceed with negotiations with SAP based on its indication of interest on an exclusive basis. Our Board approved the indication of interest containing the price per share of $36.00, including the obligation to negotiate exclusively with SAP for 30 days, and authorized our management team to negotiate and enter into an exclusivity agreement with SAP. Late on December 21, 2017, Mr. Stretch informed Mr. Shenkman of our Board's decision.

       On December 22, 2017, representatives of Callidus and Fenwick & West discussed the exclusivity agreement with a representative of Jones Day, outside counsel to SAP, and in the course of that discussion,

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the representative of Jones Day indicated that SAP would not be able to proceed to due diligence and negotiation of a merger agreement if we did not enter into the exclusivity agreement. During such discussions, SAP requested that the terms of the exclusivity agreement provide that we would negotiate the terms of a potential acquisition exclusively with SAP until 11:59 pm on January 30, 2018. We agreed to that request and executed the exclusivity agreement on December 23, 2017, and SAP executed it on December 26, 2017. On December 26, 2017, SAP delivered to Callidus a due diligence request list requesting documents and information relating to our business, products and technology, finance, accounting and tax, legal matters, procurement, employee benefits and other matters.

       On December 29, 2017, representatives and advisors for SAP were granted access to an online data room for purposes of SAP's due diligence review of Callidus. During the period from December 29, 2017 to January 28, 2018 representatives of SAP and its legal and financial advisors engaged in extensive due diligence activities with Callidus and our legal and financial advisors.

       On January 3, 2018, our Board held a meeting, with representatives of Qatalyst Partners and Fenwick & West participating, to discuss the due diligence process with SAP.

       On January 4 and January 5, 2018, representatives of Callidus and SAP, together with their outside legal advisors, held a series of due diligence meetings at the offices of Jones Day, outside counsel to SAP, in Palo Alto regarding our business, products and technology, finance, accounting and tax, legal matters, procurement, employee benefits and other topics. At these meetings, our management provided SAP with a subset of the financial projections prepared by our management and summarized below under "— Financial Projections". These projections were based on the financial plan previously discussed with our Board, updated for the impact of the acquisition of Learning Seat on December 4, 2017 (as well as certain other minor updates as a result of our recently completed budget review) and included prospective financial information about the fourth quarter of our 2017 fiscal year, our 2018 fiscal year and our 2019 fiscal year. Following these meetings, Callidus and its representatives continued to respond to additional diligence requests and hold numerous follow-up calls and meetings to discuss further questions raised and requests made by SAP and its representatives.

       On January 8, 2018, representatives of Allen & Overy LLP ("Allen & Overy") and Jones Day, outside co-counsel to SAP, delivered a draft of the Merger Agreement to Fenwick & West, reflecting proposed definitive terms of the transaction, including a proposed termination fee of 4.5% of the equity value of the transaction. The draft included customary restrictions on soliciting other proposals that allowed us to negotiate with respect to unsolicited alternative proposals, and to terminate the Merger Agreement to enter into an agreement with respect to a superior proposal.

       On January 9, 2018, our Board held a meeting, with representatives of Qatalyst Partners and Fenwick & West participating. Representatives of Fenwick & West discussed the terms of the draft Merger Agreement, including, among other things, the size and terms of the proposed termination fee, our Board's ability to consider unsolicited alternative proposals, and conditions to closing.

       On January 11, 2018, our Board held a meeting, with representatives of Qatalyst Partners and Fenwick & West participating. Representatives of Fenwick & West discussed the terms of the draft Merger Agreement with our Board in further detail, advised our Board of their fiduciary duties in considering the Merger Agreement and led a discussion with our Board regarding our negotiations with SAP. Our Board provided guidance on the terms of the draft Merger Agreement, and instructed management to negotiate a termination fee closer to 3% of the equity value of the transaction.

       On January 14, 2018, Fenwick & West provided to Jones Day and Allen & Overy proposed revisions to the draft Merger Agreement, including among other terms, a proposed termination fee equal to 2.5% of the equity value of the transaction.

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       On January 15, 2018, the Strategic Advisory Committee met, together with representatives of Fenwick & West. The Strategic Advisory Committee discussed the terms of the proposed Merger Agreement, including the outside date for consummating the merger, the treatment of our outstanding equity awards and the regulatory approvals that would be required to consummate the transaction.

       On January 17, 2018, our Board met, with advisors from Fenwick & West participating. Later that day, Allen & Overy provided to Fenwick & West proposed revisions to the draft Merger Agreement, including among other terms, a proposed termination fee equal to 4.5% of the equity value of the transaction.

       On January 18, 2018, the closing price for shares of our common stock increased to $30.40. The same day, our Strategic Advisory Committee met, together with representatives of Qatalyst Partners and Fenwick & West. Our Strategic Advisory Committee discussed the rising stock price of Callidus. Following a discussion, our Strategic Advisory Committee directed representatives of Qatalyst Partners to approach SAP and ask it to increase the purchase price for the proposed transaction.

       On January 19, 2018, representatives of Fenwick & West and Drew Grasham, our general counsel, as well as representatives of SAP, Jones Day and Allen & Overy met at the offices of Jones Day in Palo Alto, California, to discuss the open issues in the draft Merger Agreement, including the termination fee payable by Callidus, the triggers for payment of the termination fee, the regulatory approvals required for closing of the transaction, the representations and warranties to be made by Callidus and the restrictions on Callidus's activities, and other covenants applicable to the parties, between the signing of the Merger Agreement and the earlier of the closing of the transaction and the termination of the Merger Agreement. In addition, representatives of Fenwick & West and Callidus proposed a termination fee of 2.5% of the equity value of the transaction and the representatives of SAP, Allen & Overy and Jones Day expressed a strong desire for the termination fee to be in the region of 4.0%.

       On January 20, 2018, Fenwick & West provided to Jones Day and Allen & Overy proposed revisions to the draft Merger Agreement, including among other terms, a proposed termination fee of 2.5% of the equity value of the transaction. The parties and their legal counsel continued to negotiate the terms of the Merger Agreement through January 29, 2018.

       On January 21, 2018, a representative of Qatalyst Partners spoke with Mr. Shenkman of SAP and indicated that our Board may be unwilling to approve the transaction unless SAP raised its price beyond $36.00 per share, and encouraged SAP to increase the per share offer price.

       On January 22, 2018, Mr. Shenkman contacted a representative of Qatalyst Partners and said that SAP was unwilling to raise its price, and reiterated that SAP's offer to purchase Callidus at a price of $36.00 per share was its best and final offer. Later that day, the Strategic Advisory Committee met, together with representatives of Qatalyst Partners and Fenwick & West. A representative of Qatalyst Partners informed the members of the Strategic Advisory Committee about the communications it had with SAP and SAP's refusal to increase the proposed price for the transaction. The members of the Strategic Advisory Committee directed our management and advisors to continue negotiating the draft Merger Agreement, and also instructed Qatalyst Partners to again approach SAP with a proposal to raise its price.

       On January 23, 2018, Mr. Stretch and Mr. Shenkman discussed the proposed transaction. Mr. Stretch reiterated the request that SAP raise the price beyond $36.00 per share, which Mr. Shenkman rejected. The next day, a representative of Qatalyst Partners contacted Mr. Shenkman and again asked SAP to raise the per share price and also proposed that SAP accept a termination fee of $75 million, which represented approximately 2.96% of the equity value of the transaction. Mr. Shenkman stated that $36.00 was SAP's best and final offer, but agreed to accept a termination fee of $75 million. Mr. Stretch subsequently informed members of our Board of the discussions with Mr. Shenkman.

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       On January 28, 2018, our Board met, together with representatives of Qatalyst Partners and Fenwick & West, to discuss the transaction terms. Our Board reviewed the recent discussions between Mr. Shenkman of SAP and Mr. Stretch and a representative of Qatalyst Partners. Representatives of Qatalyst Partners reviewed with our Board their financial analysis of the $36.00 per share cash consideration to be received by holders of shares of Callidus common stock pursuant to the Merger Agreement, and indicated to our Board that Qatalyst Partners was prepared to deliver an opinion to the effect that, as of the date such opinion was delivered and based on and subject to the considerations, limitations, qualifications and other matters set forth in such opinion, the $36.00 per share cash consideration to be received by holders of shares of Callidus common stock (other than SAP or any of its affiliates) pursuant to, and in accordance with, the terms of the Merger Agreement was fair, from a financial point of view, to such holders. Members of our Board discussed the value of the proposed transaction to Callidus stockholders, including various transaction multiples implied by the purchase price, the premium to Callidus's current and historical stock price and the execution risks of our operating plan as a standalone company and the other factors described under "— Recommendation of Callidus's Board and Reasons for the Merger". Members of our Board also discussed their belief that the negotiated termination fee of $75 million (2.96% of the equity value of the transaction, calculated using the treasury method) would not preclude any offers by interested third parties.

       On January 29, 2018, legal counsel for Callidus and SAP completed their negotiations of the Merger Agreement and related documents. Later that evening, the supervisory board of SAP SE approved the acquisition of Callidus pursuant to the Merger Agreement.

       Later on January 29, 2018, our Board held a meeting, with representatives of Qatalyst Partners and Fenwick & West participating, to consider approval of the potential transaction. Representatives of Qatalyst Partners updated their financial analysis of the $36.00 per share cash consideration to be received by holders of shares of Callidus common stock pursuant to the Merger Agreement that they had provided at the January 28, 2018 Board meeting. The Qatalyst Partners representatives informed our Board that there had been no material change in any of the financial analyses previously provided by Qatalyst Partners at the January 28 Board meeting. The full text of the written opinion of Qatalyst Partners, with respect to the financial fairness of the merger, dated January 29, 2018, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken in connection with, such opinion, is attached as Annex B to this proxy statement. See also "— Opinion of Callidus's Financial Advisor." Following review of the proposed terms of the Merger Agreement and further discussions with management and its legal and financial advisors, our Board unanimously adopted resolutions that determined and declared that the transactions contemplated by the Merger Agreement, including the merger, were advisable, fair to and in the best interests of, Callidus and its stockholders, approved and declared advisable the Merger Agreement, the merger and the other transactions contemplated thereby, authorized Callidus to execute, deliver and perform the Merger Agreement and recommended that our stockholders adopt the Merger Agreement. Our Board also unanimously approved the amendment and restatement of our bylaws to adopt an exclusive Delaware forum selection bylaw, having determined that such amendment and adoption was in the best interests of our stockholders.

       Callidus, SAP and Merger Sub then executed the Merger Agreement and, shortly thereafter, released a joint press release announcing the signing of the Merger Agreement.

Recommendation of Callidus's Board and Reasons for the Merger

       At a meeting of our Board on January 29, 2018, our Board unanimously (1) approved and declared advisable the Merger Agreement, (2) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby and (3) determined that the Merger Agreement and the transactions contemplated thereby are advisable, fair to and in the best

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interests of Callidus and our stockholders. Our Board unanimously recommends that you vote (i) "FOR" the adoption of the Merger Agreement, (ii) "FOR" the advisory compensation proposal and (iii) "FOR" the adjournment proposal.

       In evaluating the Merger Agreement and reaching its decision to declare that the Merger Agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of Callidus and our stockholders, and to approve the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, our Board consulted with our management and its financial advisor, Qatalyst Partners. Our Board also consulted with outside legal counsel regarding its fiduciary duties and the terms and conditions of the Merger Agreement and other related matters. The following discussion includes the material reasons and factors that our Board considered in making its recommendation that Callidus stockholders vote in favor of adoption of the Merger Agreement, but is neither exhaustive nor intended to be exhaustive.

       Our Board considered the following factors in favor of the merger (which factors are not necessarily presented in order of relative importance):

       Merger Consideration.    With respect to the merger consideration to be received by our stockholders, our Board considered:

•

that our stockholders will be entitled to receive merger consideration of $36.00 per share in cash upon the closing of the merger, providing liquidity and certainty of value as compared to the uncertain future long-term value that our stockholders might or might not realize if we remained an independent public company, enabling them to realize value that had been created by Callidus, while eliminating the long-term business and execution risk;



•

the fact that the $36.00 per share value of the cash merger consideration represented a multiple of 9.8 times our revenue for the last twelve months ended September 30, 2017, a multiple of 8.3 times our projected revenue for the twelve-month period ended September 30, 2018 (based on consensus analyst estimates as of January 26, 2018) and a multiple of 7.9 times our projected revenue for the calendar year 2018, and the fact that these revenue multiples exceeded the revenue multiples in comparable merger transactions;



•

the fact that the $36.00 per share value of the cash merger consideration is a premium of 10% over the $32.70 closing price of our common stock on The Nasdaq Stock Market on January 29, 2018, which was the 52-week and all-time high closing price of our common stock;



•

the fact that the $36.00 per share value of the cash merger consideration represents a 21% premium over the 30-day volume weighted average closing price of our common stock on The Nasdaq Stock Market as of January 29, 2018 (the last trading day prior to our Board's approval of the Merger Agreement) and a 28% premium over the 90-day volume weighted average closing price;



•

the recent and historical market prices of our common stock, including the market price performance of our common stock relative to that of other industry participants over the last 12 months, and the financial market conditions during that period (See "Market Prices and Dividend Data" beginning on page 21 of this proxy statement for information about our common stock prices over time);



•

its belief, based on the course of negotiations between Callidus and SAP and the input from management and its financial advisor with respect to SAP's statements made and positions taken during repeated negotiations, that $36.00 per share (which SAP increased from an initial

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offer of $34.00 per share to the final offer of $36.00 per share during the course of negotiations, as more fully described under the section entitled "— Background of the Merger" beginning on page 27 of this proxy statement) was the highest price SAP would be willing to pay for our common stock; and

•

its belief, based on discussions with parties other than SAP and the understanding of our Board of the financial ability and likelihood that another counterparty having a potential strategic interest would emerge, that it was unlikely that any other party would be willing to pay more than $36.00 per share in cash or otherwise engage in a transaction with us that would be more favorable to Callidus and its stockholders than the merger.

       Solicitation of Interest.    Our Board considered the fact that, prior to entering into an exclusivity agreement with SAP SE, our Board, with the assistance of Qatalyst Partners considered other potential acquirers, including an inbound inquiry from a financial sponsor, and actively solicited interest from other parties that our Board determined would likely have the financial ability and strategic interest to be potentially interested in a business combination with us, and that each of the parties declined to pursue an acquisition of Callidus.

       Likelihood of Completion.    Our Board believed the business reputation of and existing relationship with SAP supported the conclusion that a transaction with SAP could be completed relatively quickly and in an orderly manner and posed a relatively low risk of non-completion. Our Board considered the business reputation of SAP, including its history of successful acquisitions, and the substantial financial resources of SAP. It also considered SAP's strong strategic interest in Callidus and its familiarity with Callidus and our products based on the existing commercial partnerships between the companies, and its belief that SAP was highly likely to complete the acquisition.

       Prospects in Remaining Independent.    Our Board considered the possibility of us continuing to operate as an independent public company, including our relative strengths in the SaaS industry and anticipated growth, in light of the risks and uncertainties of achieving elements of our business plan over the foreseeable future, as well as market and general economic risks. In considering this alternative, our Board considered the following factors:

•

the financial projections prepared by our management and summarized below under "— Financial Projections" beginning on page 45 of this proxy statement;



•

the potential for increased competition in the SaaS industry, including from larger competitors that have greater financial resources, larger sales forces, more extensive international presence and the ability to bundle services that compete with ours with their other product and service offerings (and which could potentially include SAP), as well as the importance of scale to compete in the SaaS industry and the trend of consolidation within the industry;



•

our historical revenue and operating results and financial prospects and the risks associated with achieving the Projections, including the difficulty of recruiting and retaining qualified personnel in a highly-competitive staffing market, the risk that we might be unable to continue to increase our sales force to achieve desired productivity levels and the significant investments we would have to make to continue our growth rate, including with respect to our learning and enablement solutions; and



•

the fact that, even if we were to achieve our operating objectives, there would be no assurance that the implied present value of our future stock price would exceed the $36.00 per share cash consideration to be paid in the merger.

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       Opinion of Qatalyst Partners.    Our Board received the opinion of Qatalyst Partners that as of January 29, 2018, and based upon and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Qatalyst Partners as set forth in its written opinion, the $36.00 per share cash consideration to be received by the holders of shares of our common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement was fair, from a financial point of view, to such holders. The full text of the written opinion of Qatalyst Partners, dated as of January 29, 2018, is attached as Annex B and is incorporated by reference in this proxy statement in its entirety. See also "— Opinion of Callidus's Financial Advisor" beginning on page 39 of this proxy statement.

       Timing of the Proposal; No Comparable Offer.    Our Board considered the timing of the merger and the risk that if Callidus did not accept the SAP offer now, it might not have another opportunity to do so or a comparable opportunity might not arise because other potential acquirers may not value the diversity of our product offerings to the same extent as SAP.

       Terms of the Merger Agreement.    Our Board considered the terms and conditions of the Merger Agreement and the course of robust, arms' length negotiations thereof, with the assistance of advisors, including:

•

the structure of the transaction as a merger, requiring approval by our stockholders, which would provide a period of time prior to stockholder approval during which an unsolicited competing proposal could be made;



•

our ability, under certain circumstances, to furnish information to and conduct negotiations with a third party, if our Board determines in good faith that the third party has made an acquisition proposal that is, or could reasonably be expected to result in, a superior proposal (as defined in the Merger Agreement);



•

the ability of our Board, subject to compliance with the terms and conditions of the Merger Agreement, to consider and to accept an unsolicited superior proposal and terminate the Merger Agreement, upon the payment to SAP of a termination fee of $75 million, in order to enter into a definitive agreement providing for a superior proposal, as long as we have complied with the notice and other requirements (including SAP's matching rights) described under "The Merger Agreement — Covenants — No Solicitation of Acquisition Proposals; Change of Board Recommendation or Termination" beginning on page 76 of this proxy statement;



•

the ability of our Board, subject to compliance with the terms and conditions of the Merger Agreement, to withdraw or modify its recommendation that our stockholders vote in favor of adopting the Merger Agreement under certain circumstances in response to its receipt of a superior proposal, as long as we have complied with the notice and other requirements (including SAP's matching rights) described under "The Merger Agreement — Covenants — No Solicitation of Acquisition Proposals; Change of Board Recommendation or Termination" beginning on page 76 of this proxy statement, and SAP's corresponding right to terminate the Merger Agreement and be paid a fee of $75 million by us;



•

the ability of our Board, subject to compliance with the terms and conditions of the Merger Agreement, to change its recommendation in favor of adoption of the Merger Agreement, under certain circumstances, in response to an intervening event (as defined in the Merger Agreement) as long as we have complied with the notice and other requirements (including SAP's matching rights) described under "The Merger Agreement — Covenants — No Solicitation of Acquisition Proposals; Change of Board Recommendation or Termination"

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beginning on page 76 of this proxy statement, and SAP's corresponding right to terminate the Merger Agreement and be paid a fee of $75 million by us;

•

our Board's belief that the termination fee of $75 million would not preclude or substantially impede a possible competing proposal;



•

our ability to specifically enforce SAP's obligations under the Merger Agreement, including SAP's obligations to consummate the merger;



•

our Board's belief that we will retain sufficient operating flexibility to conduct our business in the ordinary course between the execution of the Merger Agreement and consummation of the merger;



•

the conditions to SAP's obligation to complete the merger, including the absence of a financing condition, the absence of a need for a vote of SAP's stockholders and the definition of material adverse effect as described on page 83 of this proxy statement; and



•

that our stockholders will be entitled to appraisal rights under Delaware law.

       In the course of its deliberations, our Board also considered a variety of risks and factors weighing against the merger, including:

       Risks of Announcement; Risks of Closing.    Our Board considered:

•

the risks and contingencies related to the announcement and pendency of the merger, including the potential impact on our employees and our relationships with existing and prospective customers and business partners, as well as other third parties;



•

the conditions of SAP's obligation to complete the merger and the right of SAP to terminate the Merger Agreement under certain specified circumstances;



•

our risks and costs if the merger is not completed, including the diversion of management and employee attention, potential employee attrition, the potential impact on our stock price and the effect on our business relationships, including with SAP;



•

the risks of a delay in receiving, or a failure to receive, the necessary antitrust approvals and clearances to complete the merger in the United States, Germany, Austria and Cyprus, and the extent of SAP's obligations to expend efforts in seeking such approvals and clearances;



•

our obligations not to solicit proposals or offers that constitute, or would reasonably be expected to lead to, acquisition proposals; the limited circumstances in which we may enter into, continue, or otherwise participate in any discussions regarding acquisition proposals, or agree to, accept, or recommend any acquisition proposals other than as described above with respect to superior proposals; the ability of SAP to match a superior proposal; and the requirement that we pay a $75 million termination fee to SAP related to a termination of the Merger Agreement in connection with a superior proposal in the circumstances specified in the Merger Agreement, all of which could dissuade another party from making an acquisition proposal for us.

       Cash Transaction.    Our Board considered that the merger consideration is cash and, as a result, our stockholders will forego any potential future increase in our value that might result from our possible growth, and that gains realized as a result of the merger generally will be taxable to our stockholders.

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       Limitations on Our Business.    Our Board considered the potential limitations on our pursuit of business opportunities due to pre-closing covenants in the Merger Agreement whereby we agreed that we will carry on our business in the ordinary course of business consistent with past practice and, subject to specified exceptions, not to take certain actions related to the conduct of our business without the prior written consent of SAP.

       Interests of Directors and Officers.    Our Board was aware of, and considered, the interests that our directors and executive officers may have with respect to the merger in addition to their interests as our stockholders generally, as described in "— Interests of Callidus Directors and Executive Officers in the Merger" beginning on page 47 of this proxy statement.

       Exclusivity.    The fact that we entered into an exclusivity agreement, the execution of which SAP made a condition to its willingness to increase its offer price to $36.00 per share and proceed with its proposal for a possible acquisition of Callidus at such increased price, limited the Board's ability to solicit bids from other potential buyers or to conduct a formal auction process prior to entering into the Merger Agreement. However, in light of SAP's insistence on Callidus agreeing to pre-signing exclusivity obligations in order to proceed with the transaction and the market check process conducted by the Board prior to signing the exclusivity agreement, the Board was of the view, after discussion with Callidus's legal and financial advisors, that the risk of losing SAP's pursuit of a potential acquisition outweighed the possibility of receiving a more favorable proposal from another party.

       The foregoing discussion is not intended to be exhaustive, but we believe it addresses the material information and principal factors considered by our Board in its consideration of the merger.

       In light of the variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, our Board did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination, and individual directors may have given different weight to different factors. In addition, our Board did not reach any specific conclusion with respect to any of the factors or reasons considered. Instead, our Board conducted an overall analysis of the factors and reasons described above and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the Merger Agreement and based on the totality of the information presented to it and considered by it, accordingly recommends that our stockholders vote "FOR" the adoption of the Merger Agreement.

Opinion of Callidus's Financial Advisor

       We retained Qatalyst Partners to act as financial advisor to our Board in connection with a potential transaction such as the merger and to evaluate whether the $36.00 per share cash consideration to be received by the holders of our common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement was fair, from a financial point of view, to such holders. We selected Qatalyst Partners to act as our financial advisor based on Qatalyst Partners' qualifications, expertise, reputation, its knowledge of the business and affairs of Callidus and the industry in which it operates and its close familiarity with the Board, our business and management team, as well as Qatalyst Partners' prior experience representing other companies in transactions with SAP. Qatalyst Partners has provided its written consent to the reproduction of Qatalyst Partners' opinion in this proxy statement. Qatalyst Partners delivered its written opinion, dated January 29, 2018, that, as of such date and based upon and subject to the considerations, limitations, qualifications, assumptions and other matters set forth therein, the $36.00 per share cash consideration to be received by the holders of our common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement was fair, from a financial point of view, to such holders.

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       The full text of Qatalyst Partners' written opinion, dated January 29, 2018, to our Board is attached hereto as Annex B 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. You should read the opinion carefully in its entirety. Qatalyst Partners' opinion was provided to our Board and addresses only, as of the date of the opinion, the fairness from a financial point of view of the $36.00 per share cash consideration to be received by the holders of our common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement, and it does not address any other aspect of the merger. It does not constitute a recommendation as to how any stockholder should vote with respect to the merger or any other matter and does not in any manner address the price at which our 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.

       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 Callidus. Qatalyst Partners also reviewed certain forward-looking information relating to Callidus prepared by our management, including financial projections and operating data prepared by our management ("Company Projections") and which are described below in the section entitled "— Financial Projections." Additionally, Qatalyst Partners discussed our past and current operations and financial condition and prospects with senior executives of Callidus. Qatalyst Partners also reviewed the historical market prices and trading activity for our common stock and compared our financial performance and the prices and trading activity of our 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 Callidus. With respect to the Company Projections, Qatalyst Partners was advised by our management, and Qatalyst Partners assumed, that the Company Projections had been reasonably prepared on bases reflecting the best currently available estimates and judgments of our management of our capitalization and future financial performance and other matters covered thereby. Qatalyst Partners assumed that the merger will be consummated in accordance with the terms set forth in the Merger Agreement, without any modification, waiver or delay. In addition, Qatalyst Partners assumed that in connection with the receipt of all the necessary approvals of the proposed merger, no delays, limitations, conditions or restrictions will be imposed that could have an adverse effect on Callidus or Parent or the contemplated benefits expected to be derived in the proposed merger. Qatalyst Partners did not make any independent evaluation or appraisal of our assets or liabilities (contingent or otherwise), nor was Qatalyst Partners furnished with any such evaluation or appraisal. In addition, Qatalyst Partners relied, without independent verification, upon the assessment of our management as to our existing and future technology and products 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 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 not address the underlying business decision of Callidus to engage in the merger, or the relative merits of the merger as compared to any strategic alternatives that may be available to Callidus. Qatalyst Partners' opinion is limited to the fairness, from a financial point of view, of the $36.00

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per share cash consideration to be received by the holders of our common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement, and Qatalyst Partners expressed no opinion with respect to the fairness of the amount, nature or timing of the compensation to any of our officers, directors or employees, or any class of such persons, relative to the $36.00 per share cash consideration.

       The following is a brief summary of the material analyses performed by Qatalyst Partners in connection with its opinion dated January 29, 2018. 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 ("Analyst Projections") and the Company 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.

Discounted Cash Flow Analysis

       Qatalyst Partners performed an illustrative discounted cash flow ("DCF") analysis, which is designed to imply a potential, present value of per share values for our common stock as of December 31, 2017 by:

•

adding:

       (a)  the implied net present value of the estimated future unlevered free cash flows of Callidus, based on the Company Projections, for calendar year 2018 through calendar year 2022 (which implied present value was calculated by using a range of discount rates of 9.0% to 15.0%, based on an estimated weighted average cost of capital for Callidus);

       (b)  the implied net present value of a corresponding terminal value of Callidus, calculated by multiplying the estimated unlevered free cash flow in calendar year 2023, based on the Company Projections (assuming an effective tax rate of 17.5%, as provided by Callidus' management, and which tax rate excludes the effect of Callidus' estimated remaining tax attributes for 2023, as such tax attributes were separately valued, as described in item (c) below), by a range of multiples of enterprise value to next-twelve-months estimated unlevered free cash flow of 25.0x to 30.0x selected by Qatalyst based on its professional judgment, and discounted to present value using the same range of discount rates used in item (a) above;

       (c)  the implied net present value of Callidus' forecasted tax attributes outstanding as of December 31, 2022 based on the Company Projections (which implied present value was calculated by using the same range of discount rates used in item (a) above and the statutory tax rate applicable to us, as provided by Callidus' management); and

       (d)  the net cash of Callidus as of December 31, 2017, as estimated by Callidus' management;

•

applying a dilution factor of approximately 12%, as projected by Callidus' management, to reflect the dilution to current stockholders over the projected period due to the effect of future equity compensation grants; and



•

dividing the resulting amount by the number of fully-diluted shares of our common stock outstanding (calculated utilizing the treasury stock method), adjusted for restricted stock units (including equity awards expected to be granted by Callidus in February 2018), performance stock units, and stock options outstanding as of January 26, 2018, as well as shares of common stock expected to be purchased under the Callidus employee stock purchase plan in February 2018, all of which amounts were provided by Callidus' management (the "Fully Diluted Shares").

Based on the calculations set forth above, this analysis implied a range of per share values of approximately $29.46 to $43.70.

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Selected Companies Analysis

       Qatalyst Partners compared selected financial information and public market multiples for Callidus with publicly available information and public market multiples for selected companies. The companies used in this comparison included 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 Callidus, 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 2018, and using the closing prices as of January 26, 2018 for shares of the selected companies, Qatalyst Partners calculated, among other things, the implied fully-diluted enterprise value divided by the estimated consensus revenue for calendar year 2018 (the "CY2018E Revenue Multiples"), for each of the selected companies.

       The CY2018E Revenue Multiple for Callidus was 7.0x based on the Analyst Projections and the fully-diluted enterprise value of Callidus was calculated using the closing price of Callidus as of January 26, 2018.

       Based on an analysis of the CY2018E Revenue Multiples for each of the selected companies and the application of its professional judgment, Qatalyst Partners selected a representative range of 5.5x to 7.5x and applied this range to our estimated calendar year 2018 revenue based on each of the Company Projections and the Analyst Projections. Based on the Fully Diluted Shares, this analysis implied a range of per share values for our common stock of approximately $26.63 to $35.54 based on the Company Projections and approximately $25.92 to $34.42 based on the Analyst Projections.

       No company included in the selected companies analysis is identical to Callidus. 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 our control, such as the impact of competition on our business and the industry in general, industry growth and the absence of any material adverse change in our financial condition and prospects or our industry or in the financial markets in general. Mathematical analysis, such as determining the arithmetic mean, median, or the high or low, is not in itself a meaningful method of using selected company data. In addition, certain publicly available information and data that was used in the selected companies analysis might not, in whole or in part, reflect the impact of recent changes in U.S. tax laws.

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Selected Transactions Analysis

       Qatalyst Partners compared 26 selected public SaaS transactions announced between September 2009 and December 2017. These transactions are listed below:

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       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 (a) the last-twelve months revenue of the target company ("LTM Revenue Multiple"), and (b) the next-twelve months revenue of the target company ("NTM Revenue Multiple"), as reflected in certain publicly available financial statements, research analyst reports and press releases.

       Based on an analysis of the LTM Revenue Multiple for each of the selected transactions, and the application of its professional judgment, Qatalyst Partners selected a representative range of 5.5x to 12.6x and applied that range to our last-twelve months (ending September 30, 2017) revenue. Based on the Fully Diluted Shares, this analysis implied a range of per share values for our common stock of approximately $21.25 to $45.43.

       Based on an analysis of the NTM Revenue Multiple for each of the selected transactions, and the application of its professional judgment, Qatalyst Partners selected a representative range of 4.5x to 10.2x and applied that range to our next-twelve months (ending September 30, 2018) estimated revenue reflected in the Analyst Projections. Based on the Fully Diluted Shares, this analysis implied a range of per share values for our common stock of approximately $20.75 to $43.84.

       No company or transaction utilized in the selected transactions analysis is identical to Callidus or the merger. 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 our control, such as the impact of competition on our business or the industry generally, industry growth and the absence of any material adverse change in our financial condition 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 to which they are being compared. Because of the unique circumstances of each of these transactions and the merger, Qatalyst Partners cautioned against placing undue reliance on this information.

Miscellaneous

       In connection with the review of the merger by our 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 Callidus. 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 our control. 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 $36.00 per share cash consideration to be received by the holders of our common stock, other than SAP or any affiliates of SAP, pursuant to, and in accordance with, the terms of the Merger Agreement, and in connection with the delivery of its opinion to our Board. These analyses do not purport to be appraisals or to reflect the price at which our common stock might actually trade.

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       Qatalyst Partners' presentation as to the fairness of the $36.00 per share cash consideration to be received by the holders of shares of our common stock (other than SAP and its affiliates) pursuant to, and in accordance with, the terms of the Merger Agreement to our Board was one of many factors considered by our Board in deciding to approve the Merger Agreement. Consequently, the analyses as described above should not be viewed as determinative of the opinion of our Board with respect to the $36.00 per share cash consideration to be received by our stockholders pursuant to the merger or of whether our Board would have been willing to agree to a different consideration. The $36.00 per share cash consideration was determined through arm's-length negotiations between Callidus and SAP and was approved by our Board. Qatalyst Partners provided advice to Callidus during these negotiations. Qatalyst Partners did not, however, recommend any specific consideration to Callidus or that any specific consideration constituted the only appropriate consideration for the merger.

       Qatalyst Partners provides investment banking and other services to a wide range of entities 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 Callidus, SAP or certain of their respective affiliates. During the two year period prior to the date of Qatalyst Partners' opinion, no material relationship existed between Qatalyst Partners or any of its affiliates and Callidus or SAP pursuant to which compensation was received by Qatalyst Partners or its affiliates; however, Qatalyst Partners and/or its affiliates may in the future provide investment banking and other financial services to Callidus or SAP and their respective affiliates for which Qatalyst Partners or they would expect to receive compensation.

       Under the terms of its engagement letter, Qatalyst Partners provided Callidus with financial advisory services in connection with the proposed merger for which it will be paid approximately $32 million, $125,000 of which was payable upon the execution of such engagement letter and $2,000,000 of which was payable upon delivery of its opinion (regardless of the conclusion reached in the opinion), and the remaining portion of which will be paid upon, and subject to, consummation of the merger. We have also agreed to reimburse Qatalyst Partners for its expenses incurred in performing its services. We have 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 federal securities law, and certain expenses related to or arising out of Qatalyst Partners' engagement.

Financial Projections

       Our management made available prospective financial information about Callidus ("Projections") for use in connection with the financial analyses performed by Qatalyst Partners in connection with delivering its fairness opinion to our Board. Our management provided the same projections to Qatalyst Partners and our Board. A subset of this information, including prospective financial information about the fourth quarter of our 2017 fiscal year, our 2018 fiscal year and our 2019 fiscal year, was delivered to SAP to assist with its due diligence review.