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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-261512

 

 

LOGO           

  

 

LOGO

MERGER PROPOSAL—YOUR VOTE IS VERY IMPORTANT

Dear Zendesk Stockholders and Momentive Stockholders:

On October 28, 2021, Zendesk, Inc., which is referred to as “Zendesk,” Milky Way Acquisition Corp., a wholly owned subsidiary of Zendesk, which is referred to as “Merger Sub,” and Momentive Global Inc., which is referred to as “Momentive,” entered into an Agreement and Plan of Merger, as it may be amended from time to time, which is referred to as the “merger agreement,” that provides for the acquisition of Momentive by Zendesk. Upon the terms and subject to the conditions set forth in the merger agreement, Zendesk will acquire Momentive through a merger of Merger Sub with and into Momentive, which is referred to as the “merger,” with Momentive continuing as the surviving corporation and as a wholly owned subsidiary of Zendesk.

Subject to the terms and conditions of the merger agreement, at the effective time of the merger, each outstanding share of common stock, par value $0.00001 per share, of Momentive, which is referred to as “Momentive common stock,” (subject to certain exceptions set forth in the merger agreement) will be converted into the right to receive 0.225, which number is referred to as the “exchange ratio,” of a share of common stock, par value $0.01 per share, of Zendesk, which is referred to as “Zendesk common stock,” with a cash payment (without interest and less any applicable withholding taxes) for any fractional shares of Zendesk common stock resulting from the calculation. Zendesk stockholders will continue to own their existing shares of Zendesk common stock.

The exchange ratio is fixed and will not be adjusted for changes in the market price of either Zendesk common stock or Momentive common stock prior to the effective time of the merger. As a result, the number of shares of Zendesk common stock that Momentive stockholders will receive as consideration in the merger is fixed and will not change. However, the market value of the consideration payable to Momentive stockholders in the merger will fluctuate with the market price of Zendesk common stock. Zendesk common stock is traded on the New York Stock Exchange, which is referred to as “NYSE,” under the symbol “ZEN.” Momentive common stock is traded on the Nasdaq Global Select Market under the symbol “MNTV.” Based on the closing price of Zendesk common stock on NYSE of $103.53 on January 3, 2022, the latest practicable trading day prior to the date of the accompanying joint proxy statement/prospectus, the implied value of the consideration payable to Momentive stockholders in the merger was approximately $23.29 per share of Momentive common stock.

Based on the number of shares of Zendesk common stock and Momentive common stock outstanding on January 3, 2022, the latest practicable date prior to the date of the accompanying joint proxy statement/prospectus, it is expected that Zendesk will issue approximately 33.8 million shares of Zendesk common stock in the merger and, upon completion of the merger, the current Zendesk stockholders are expected to own approximately 78% of the outstanding shares of Zendesk common stock and former Momentive stockholders are expected to own approximately 22% of the outstanding shares of Zendesk common stock.

Zendesk and Momentive will each hold a special meeting of their respective stockholders to vote on the proposals necessary to complete the merger. Such special meetings are referred to as the “Zendesk special meeting” and the “Momentive special meeting,” respectively. We encourage you to obtain current quotes for both Zendesk common stock and Momentive common stock before voting at the Zendesk special meeting or the Momentive special meeting.

At the Zendesk special meeting, Zendesk stockholders will be asked to consider and vote on (i) a proposal to approve the issuance of shares of Zendesk common stock to Momentive stockholders in connection with the merger, which proposal is referred to as the “Zendesk share issuance proposal,” and (ii) a proposal to approve the adjournment of the Zendesk special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zendesk special meeting to approve the Zendesk share issuance proposal. The Zendesk board of directors unanimously recommends that Zendesk stockholders vote “FOR” each of the proposals to be considered at the Zendesk special meeting.

At the Momentive special meeting, Momentive stockholders will be asked to consider and vote on (i) a proposal to adopt the merger agreement, which proposal is referred to as the “Momentive merger proposal,” (ii) a proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Momentive named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, and (iii) a proposal to approve the adjournment of the Momentive special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Momentive special meeting to approve the Momentive merger proposal. The Momentive board of directors unanimously recommends that Momentive stockholders vote “FOR” each of the proposals to be considered at the Momentive special meeting.

We cannot complete the merger unless the Zendesk share issuance proposal is approved by Zendesk stockholders and the Momentive merger proposal is approved by Momentive stockholders. Your vote on these matters is very important, regardless of the number of shares you own. Whether or not you plan to virtually attend your company’s respective special meeting, please vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to authorize the individuals named on your proxy card to vote your shares at the applicable special meeting.

 

 

The accompanying joint proxy statement/prospectus provides you with important information about Zendesk, Momentive, the merger, the merger agreement and the special meetings. We encourage you to read the entire document carefully, in particular the information under “Risk Factors” beginning on page 34 for a discussion of material risks relevant to the merger.


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We look forward to the successful completion of the merger.

Sincerely,

 

 

LOGO

 

Mikkel Svane

Chair of the Board of Directors and Chief Executive Officer

Zendesk, Inc.

  

LOGO

 

Zander Lurie

Chief Executive Officer and Director

Momentive Global Inc.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Zendesk common stock to be issued in connection with the merger or passed upon the adequacy or accuracy of the accompanying joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying joint proxy statement/prospectus is dated January 7, 2022 and is first being mailed to Zendesk stockholders and Momentive stockholders on or about January 10, 2022.


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LOGO

Zendesk, Inc.

989 Market Street

San Francisco, California 94103

(415) 418-7506

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON FEBRUARY 25, 2022

Notice is hereby given that Zendesk, Inc., which is referred to as “Zendesk,” will hold a special meeting of its stockholders, which is referred to as the “Zendesk special meeting,” virtually via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time.

Zendesk stockholders will be able to virtually attend and vote at the Zendesk special meeting by visiting www.cesonlineservices.com/zen22_vm, which is referred to as the “Zendesk special meeting website.” To attend the Zendesk special meeting, you must pre-register at www.cesonlineservices.com/zen22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

The Zendesk special meeting will be held for the purpose of Zendesk stockholders considering and voting on the following proposals:

 

  1.

to approve the issuance of shares of Zendesk common stock to the stockholders of Momentive Global Inc., which is referred to as “Momentive,” in connection with the merger contemplated by the Agreement and Plan of Merger, dated October 28, 2021, as it may be amended from time to time, which is referred to as the “merger agreement,” by and among Zendesk, Milky Way Acquisition Corp., a wholly owned subsidiary of Zendesk, and Momentive, which issuance is referred to as the “share issuance” and which proposal is referred to as the “Zendesk share issuance proposal”; and

 

  2.

to approve the adjournment of the Zendesk special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zendesk special meeting to approve the Zendesk share issuance proposal, which proposal is referred to as the “Zendesk adjournment proposal.”

These proposals are described in more detail in the accompanying joint proxy statement/prospectus, which you should read carefully and in its entirety before you vote. A copy of the merger agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

Only Zendesk stockholders of record at the close of business on January 3, 2022, the record date for the Zendesk special meeting, which is referred to as the “Zendesk record date,” are entitled to notice of and to vote at the Zendesk special meeting and any adjournments or postponements thereof.

The Zendesk board of directors has unanimously determined that the merger and the share issuance, on the terms and subject to the conditions set forth in the merger agreement, are advisable and fair to, and in the best interests of, Zendesk and its stockholders, and has approved the merger agreement and the transactions contemplated thereby, including the merger and the share issuance. Accordingly, the Zendesk board of directors unanimously recommends that Zendesk stockholders vote:

 

   

“FOR” the Zendesk share issuance proposal; and

 

   

“FOR” the Zendesk adjournment proposal.

Your vote is very important, regardless of the number of shares of Zendesk common stock you own. The parties cannot complete the merger unless the Zendesk share issuance proposal is approved by Zendesk stockholders. Assuming a quorum is present at the Zendesk special meeting, approval of the Zendesk share issuance proposal requires the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal.


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Whether or not you plan to virtually attend the Zendesk special meeting, please vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to authorize the individuals named on your proxy card to vote your shares of Zendesk common stock at the Zendesk special meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) please follow the instructions on the voting instruction form provided by your bank, broker or nominee to vote your shares. The list of Zendesk stockholders entitled to vote at the Zendesk special meeting will be available at Zendesk’s headquarters during regular business hours for examination by any Zendesk stockholder for any purpose germane to the Zendesk special meeting for a period of at least ten days prior to the Zendesk special meeting. The stockholder list will also be available for examination during the Zendesk special meeting via the Zendesk special meeting website.

PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ZENDESK SPECIAL MEETING VIA THE ZENDESK SPECIAL MEETING WEBSITE. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS. FOR FURTHER INFORMATION CONCERNING THE PROPOSALS BEING VOTED UPON, THE MERGER AGREEMENT, THE MERGER, USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.

By Order of the Board of Directors,

Mikkel Svane

Chair of the Board of Directors and Chief Executive Officer

Zendesk, Inc.

San Francisco, California


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LOGO

Momentive Global Inc.

One Curiosity Way

San Mateo, California 94403

(650) 543-8400

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON FEBRUARY 25, 2022

Notice is hereby given that Momentive Global Inc., which is referred to as “Momentive,” will hold a special meeting of its stockholders, which is referred to as the “Momentive special meeting,” virtually via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time.

You will be able to virtually attend and vote at the Momentive special meeting by visiting www.cesonlineservices.com/mntv22_vm, which is referred to as the “Momentive special meeting website.” To attend the Momentive special meeting, you must pre-register at www.cesonlineservices.com/mntv22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

The Momentive special meeting will be held for the purpose of Momentive stockholders considering and voting on the following proposals:

 

  1.

to adopt the Agreement and Plan of Merger, dated October 28, 2021, as it may be amended from time to time, which is referred to as the “merger agreement,” among Zendesk, Inc., which is referred to as “Zendesk,” Milky Way Acquisition Corp., a wholly owned subsidiary of Zendesk, which is referred to as “Merger Sub,” and Momentive, which proposal is referred to as the “Momentive merger proposal”;

 

  2.

to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Momentive named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, which proposal is referred to as the “Momentive compensation proposal”; and

 

  3.

to approve the adjournment of the Momentive special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Momentive special meeting to approve the Momentive merger proposal, which proposal is referred to as the “Momentive adjournment proposal.”

These proposals are described in more detail in the accompanying joint proxy statement/prospectus, which you should read carefully and in its entirety before you vote. A copy of the merger agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

Only Momentive stockholders of record at the close of business on January 3, 2022, the record date for the Momentive special meeting, which is referred to as the “Momentive record date,” are entitled to notice of and to vote at the Momentive special meeting and any adjournments or postponements thereof.

The Momentive board of directors has unanimously determined and believes that the merger agreement and the merger of Merger Sub with and into Momentive, which is referred to as the “merger,” are advisable and fair to, and in the best interests of, Momentive and its stockholders, and approved the merger agreement and the transactions contemplated thereby, including the merger in accordance with the requirements of the General Corporation Law of the State of Delaware. Accordingly, the Momentive board of directors unanimously recommends that Momentive stockholders vote:

 

   

“FOR” the Momentive merger proposal;

 

   

“FOR” the Momentive compensation proposal; and

 

   

“FOR” the Momentive adjournment proposal.


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Your vote is very important, regardless of the number of shares of Momentive common stock you own. The parties cannot complete the transactions contemplated by the merger agreement, including the merger, without approval of the Momentive merger proposal. Approval of the Momentive merger proposal requires the affirmative vote of the holders of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date.

Whether or not you plan to virtually attend the Momentive special meeting, please vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to authorize the individuals named on your proxy card to vote your shares of Momentive common stock at the Momentive special meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) please follow the instructions on the voting instruction form provided by your bank, broker or nominee to vote your shares. The list of Momentive stockholders entitled to vote at the Momentive special meeting will be available at Momentive’s headquarters during ordinary business hours for examination by any Momentive stockholder for any purpose germane to the Momentive special meeting for a period of at least ten days prior to the Momentive special meeting. The stockholder list will also be available for examination during the Momentive special meeting via the Momentive special meeting website.

PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MOMENTIVE SPECIAL MEETING VIA THE MOMENTIVE SPECIAL MEETING WEBSITE. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE JOINT PROXY STATEMENT/PROSPECTUS. FOR FURTHER INFORMATION CONCERNING THE PROPOSALS BEING VOTED UPON, THE MERGER AGREEMENT, THE MERGER, USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS.

By Order of the Board of Directors,

 

David. A. Ebersman    Zander Lurie
Chair of the Board of Directors    Chief Executive Officer and Director
Momentive Global Inc.    Momentive Global Inc.

San Mateo, California


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REFERENCES TO ADDITIONAL INFORMATION

The accompanying joint proxy statement/prospectus incorporates important business and financial information about Zendesk, Inc. (“Zendesk”) and Momentive Global Inc. (“Momentive”) from other documents that Zendesk and Momentive have filed with the U.S. Securities and Exchange Commission (“SEC”) and that are not contained in and are instead incorporated by reference in the accompanying joint proxy statement/prospectus. For a list of documents incorporated by reference in the accompanying joint proxy statement/prospectus, see “Where You Can Find More Information.” This information is available for you, without charge, to review through the SEC’s website at www.sec.gov.

You may request a copy of the accompanying joint proxy statement/prospectus, any of the documents incorporated by reference in the accompanying joint proxy statement/prospectus or other information filed with the SEC by Zendesk or Momentive, without charge, by written or telephonic request directed to the appropriate company at the following contacts:

 

For Zendesk stockholders:    For Momentive stockholders:

Zendesk, Inc.

Attention: Shanti Ariker, Corporate Secretary

secretary@zendesk.com

(415) 418-7506

  

Momentive Global Inc.

Attention: Secretary

One Curiosity Way

San Mateo, California 94403

(650) 543-8400

In order for you to receive timely delivery of the documents in advance of the special meeting of Zendesk stockholders to be held on February 25, 2022, which is referred to as the “Zendesk special meeting,” or the special meeting of Momentive stockholders to be held on February 25, 2022, which is referred to as the “Momentive special meeting,” as applicable, you must request the information no later than February 17, 2022.

If you have any questions about the Zendesk special meeting or the Momentive special meeting, or need to obtain proxy cards or other information, please contact the applicable company’s proxy solicitor at the following contacts:

 

For Zendesk stockholders:

  For Momentive stockholders:

 

LOGO

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

(800) 322-2885

proxy@mackenziepartners.com

 

 

LOGO

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders may call toll free: (877) 825-8772

Banks and Brokers may call collect: (212) 750-5833

The contents of the websites of the SEC, Zendesk, Momentive or any other entity are not incorporated in the accompanying joint proxy statement/prospectus. The information about how you can obtain certain documents that are incorporated by reference in the accompanying joint proxy statement/prospectus at these websites is being provided only for your convenience.

 

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ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by Zendesk (Registration No. 333-261512), constitutes a prospectus of Zendesk under Section 5 of the Securities Act with respect to the shares of Zendesk common stock to be issued to Momentive stockholders pursuant to the Agreement and Plan of Merger, dated October 28, 2021, as it may be amended from time to time, by and among Zendesk, Milky Way Acquisition Corp., a wholly owned subsidiary of Zendesk (“Merger Sub”), and Momentive, which is referred to as the “merger agreement.” This document also constitutes a proxy statement of each of Zendesk and Momentive under Section 14(a) of the Exchange Act. This joint proxy statement/prospectus also constitutes a notice of meeting with respect to each of the Zendesk special meeting and the Momentive special meeting.

Zendesk has supplied all information contained or incorporated by reference in this joint proxy statement/prospectus relating to Zendesk and Merger Sub, and Momentive has supplied all such information relating to Momentive. Zendesk and Momentive have both contributed to such information relating to the merger.

You should rely only on the information contained or incorporated by reference in this joint proxy statement/prospectus. Zendesk and Momentive have not authorized anyone to provide you with information that is different from that contained or incorporated by reference in this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated January 7, 2022, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein.

Further, you should not assume that the information incorporated by reference in this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to Zendesk stockholders or Momentive stockholders nor the issuance by Zendesk of shares of Zendesk common stock pursuant to the merger agreement will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

Unless otherwise indicated or the context otherwise requires, when used in this joint proxy statement/prospectus:

 

   

“Allen & Company” refers to Allen & Company LLC, a financial advisor to Momentive in connection with the merger;

 

   

“Code” refers to the Internal Revenue Code of 1986, as amended;

 

   

“combined company” refers to Zendesk immediately following the completion of the merger and the other transactions contemplated by the merger agreement;

 

   

“DGCL” refers to the General Corporation Law of the State of Delaware;

 

   

“effective time” refers to the date and time when the merger becomes effective under the DGCL, which will be the date and time at which the certificate of merger with respect to the merger is filed with the Secretary of State of the State of Delaware, or such later date and time as may be mutually agreed to by Zendesk and Momentive and specified in the certificate of merger;

 

   

“end date” refers to July 28, 2022, the date on which, subject to certain limitations in the merger agreement, the merger agreement may be terminated and the merger abandoned by either Zendesk or Momentive;

 

   

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

 

   

“exchange ratio” refers to 0.225, which reflects the number of shares of Zendesk common stock that Momentive stockholders will be entitled to receive in the merger for each share of Momentive common

 

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stock held immediately prior to the effective time pursuant to, and in accordance with, the terms of the merger agreement;

 

   

“GAAP” refers to U.S. generally accepted accounting principles;

 

   

“Goldman Sachs” refers to Goldman Sachs & Co. LLC, financial advisor to Zendesk in connection with the merger;

 

   

“HSR Act” refers to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

   

“J.P. Morgan” refers to J.P. Morgan Securities LLC, a financial advisor to Momentive in connection with the merger;

 

   

“merger agreement” refers to the Agreement and Plan of Merger, dated as of October 28, 2021, as it may be amended from time to time, by and among Zendesk, Merger Sub and Momentive;

 

   

“merger consideration” refers to (a) 0.225 of a share of Zendesk common stock, (b) any cash in lieu of fractional shares of Zendesk common stock that a holder of Momentive common stock is entitled to receive pursuant to the merger agreement, and (c) any dividends or other distributions that a holder of Momentive common stock is entitled to receive pursuant to the merger agreement, collectively, which each share of Momentive common stock that is outstanding immediately prior to the effective time (other than shares of Momentive common stock held, directly or indirectly, by Momentive or Zendesk, any of their respective wholly owned subsidiaries, or held in Momentive’s treasury) will be converted into the right to receive pursuant to, and in accordance with, the terms of the merger agreement;

 

   

“Merger Sub” refers to Milky Way Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Zendesk, formed for the purpose of effecting the merger as described in this joint proxy statement/prospectus;

 

   

“merger” refers to the merger of Merger Sub with and into Momentive;

 

   

“Momentive” refers to Momentive Global Inc., a Delaware corporation;

 

   

“Momentive adjournment proposal” refers to the proposal for Momentive stockholders to approve the adjournment of the Momentive special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Momentive special meeting to approve the Momentive merger proposal;

 

   

“Momentive board of directors” refers to the board of directors of Momentive;

 

   

“Momentive bylaws” refers to the Fourth Amended and Restated Bylaws of Momentive adopted on June 15, 2021;

 

   

“Momentive charter” refers to the Fourth Amended and Restated Certificate of Incorporation of SVMK Inc., dated as of September 28, 2018, as amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation of SVMK Inc., dated as of June 14, 2021.

 

   

“Momentive common stock” refers to the common stock, par value $0.00001 per share, of Momentive;

 

   

“Momentive compensation proposal” refers to the proposal for Momentive stockholders to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Momentive named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement;

 

   

“Momentive merger proposal” refers to the proposal for Momentive stockholders to adopt the merger agreement;

 

   

“Momentive record date” refers to January 3, 2022;

 

   

“Momentive special meeting” refers to the special meeting of Momentive stockholders to consider and vote upon the Momentive merger proposal, the Momentive compensation proposal and the Momentive adjournment proposal;

 

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“Momentive stockholders” refers to holders of Momentive common stock;

 

   

“Nasdaq” refers to the Nasdaq Global Select Market;

 

   

“NYSE” refers to the New York Stock Exchange;

 

   

“SEC” refers to the U.S. Securities and Exchange Commission;

 

   

“Securities Act” refers to the Securities Act of 1933, as amended;

 

   

“share issuance” refers to the issuance of shares of Zendesk common stock to Momentive stockholders in connection with the merger;

 

   

“Zendesk” refers to Zendesk, Inc., a Delaware corporation;

 

   

“Zendesk adjournment proposal” refers to the proposal for Zendesk stockholders to approve the adjournment of the Zendesk special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zendesk special meeting to approve the Zendesk share issuance proposal;

 

   

“Zendesk board of directors” refers to the board of directors of Zendesk;

 

   

“Zendesk bylaws” refers to the Second Amended and Restated Bylaws of Zendesk adopted on July 27, 2021;

 

   

“Zendesk charter” refers to the Amended and Restated Certificate of Incorporation of Zendesk, dated as of May 20, 2014;

 

   

“Zendesk common stock” refers to the common stock, par value $0.01 per share, of Zendesk;

 

   

“Zendesk record date” refers to January 3, 2022;

 

   

“Zendesk share issuance proposal” refers to the proposal for Zendesk stockholders to approve the issuance of shares of Zendesk common stock to Momentive stockholders in connection with the merger;

 

   

“Zendesk special meeting” refers to the special meeting of Zendesk stockholders to consider and vote upon the Zendesk share issuance proposal and the Zendesk adjournment proposal; and

 

   

“Zendesk stockholders” refers to holders of Zendesk common stock.

 

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TABLE OF CONTENTS

 

     Page  

SUMMARY

     13  

The Parties to the Merger

     13  

The Merger and the Merger Agreement

     13  

Merger Consideration

     14  

Treatment of Momentive Equity Awards

     14  

Zendesk’s Reasons for the Merger and Recommendation of the Zendesk Board of Directors

     15  

Momentive’s Reasons for the Merger and Recommendation of the Momentive Board of Directors

     15  

Opinion of Zendesk’s Financial Advisor

     15  

Opinions of Momentive’s Financial Advisors

     16  

The Zendesk Special Meeting

     17  

The Momentive Special Meeting

     18  

Interests of Zendesk Directors and Executive Officers in the Merger

     19  

Interests of Momentive Directors and Executive Officers in the Merger

     19  

Certain Beneficial Owners of Zendesk Common Stock

     20  

Certain Beneficial Owners of Momentive Common Stock

     20  

Regulatory Approvals and Related Matters

     20  

Litigation Relating to the Merger

     21  

No Appraisal Rights

     21  

Conditions to the Completion of the Merger

     21  

No Solicitation or Discussions By Momentive

     22  

Momentive Recommendation Change

     23  

Zendesk Recommendation Change

     24  

Termination of the Merger Agreement

     25  

Termination Fees

     26  

Voting Agreements

     27  

U.S. Federal Income Tax Consequences of the Merger

     28  

Comparison of Stockholders’ Rights

     28  

Listing of Zendesk Common Stock; Delisting and Deregistration of Momentive Common Stock

     28  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     29  

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

     30  

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

     31  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     32  

RISK FACTORS

     34  

Risks Relating to the Merger

     34  

Risks Relating to the Combined Company

     41  

THE PARTIES TO THE MERGER

     49  

THE ZENDESK SPECIAL MEETING

     50  

ZENDESK PROPOSAL 1: APPROVAL OF THE SHARE ISSUANCE

     57  

ZENDESK PROPOSAL 2: ADJOURNMENT OF THE ZENDESK SPECIAL MEETING

     58  

THE MOMENTIVE SPECIAL MEETING

     59  

MOMENTIVE PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

     67  

MOMENTIVE PROPOSAL 2: ADVISORY NON-BINDING VOTE ON MERGER-RELATED COMPENSATION FOR NAMED EXECUTIVE OFFICERS

     68  

MOMENTIVE PROPOSAL 3: ADJOURNMENT OF THE MOMENTIVE SPECIAL MEETING

     69  

THE MERGER

     70  

General

     70  

Merger Consideration

     70  

Background of the Merger

     70  

Zendesk’s Reasons for the Merger and Recommendation of the Zendesk Board of Directors

     88  

 

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Momentive’s Reasons for the Merger and Recommendation of the Momentive Board of Directors

     93  

Opinion of Zendesk’s Financial Advisor

     97  

Opinions of Momentive’s Financial Advisors

     107  

Zendesk Unaudited Financial Projections

     123  

Momentive Unaudited Financial Projections

     127  

Closing and Effective Time of the Merger

     130  

Regulatory Approvals and Related Matters

     130  

U.S. Federal Securities Law Consequences

     131  

Accounting Treatment

     131  

Litigation Relating to the Merger

     131  

Exchange of Momentive Certificates

     132  

Delisting and Listing

     132  

THE MERGER AGREEMENT

     133  

The Merger

     133  

Effective Time and Completion of the Merger

     133  

Merger Consideration

     134  

Fractional Shares

     134  

Exchange Agent

     135  

Exchange of Momentive Certificates

     135  

Treatment of Momentive Equity Awards

     136  

Representations and Warranties

     137  

Interim Operations of Zendesk and Momentive

     140  

No Solicitation or Discussions by Momentive

     144  

No Solicitation or Discussions by Zendesk

     148  

Stockholder Meetings; Board Recommendations

     150  

Employee Matters

     157  

Indemnification and Insurance

     158  

Regulatory Approvals and Related Matters

     158  

Delisting and Listing

     159  

Momentive Credit Agreement

     160  

Other Covenants

     160  

Conditions to the Completion of the Merger

     160  

Termination of the Merger Agreement

     163  

Effect of Termination

     165  

Transaction Expenses and Termination Fees

     166  

Enforcement; Remedies

     167  

Amendment

     168  

Waiver

     168  

Third-Party Beneficiaries

     168  

Governing Law

     169  

VOTING AGREEMENTS

     170  

Voting

     170  

Restrictions on Inconsistent Arrangements and Transfers

     170  

Termination

     170  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     172  

INTERESTS OF ZENDESK DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER

     184  

INTERESTS OF MOMENTIVE DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER

     185  

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

     194  
COMPARISON OF STOCKHOLDERS’ RIGHTS      198  
NO APPRAISAL RIGHTS      207  
LEGAL MATTERS      208  
EXPERTS      208  

 

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     Page  
CERTAIN BENEFICIAL OWNERS OF ZENDESK COMMON STOCK      209  
CERTAIN BENEFICIAL OWNERS OF MOMENTIVE COMMON STOCK      212  
STOCKHOLDER PROPOSALS      216  
HOUSEHOLDING OF PROXY MATERIALS      216  
WHERE YOU CAN FIND MORE INFORMATION      218  
ANNEX A—Agreement and Plan of Merger, dated October 28, 2021      A-1  
ANNEX B—Opinion of Goldman Sachs & Co. LLC      B-1  
ANNEX C—Opinion of Allen & Company LLC      C-1  
ANNEX D—Opinion of J.P. Morgan Securities LLC      D-1  
ANNEX E-1—Voting Agreement, dated as of October 28, 2021 (Ryan Nabil Finley)      E-1-1  

ANNEX E-2—Voting Agreement, dated as of October 28, 2021 (Sheryl K Sandberg Revocable Trust Dated 9/3/2004)

     E-2-1  

ANNEX E-3—Voting Agreement, dated as of October 28, 2021 (SM Profits, LLC)

     E-3-1  

ANNEX E-4—Voting Agreement, dated as of October 28, 2021 (Alexander Joseph Lurie)

     E-4-1  

ANNEX E-5—Voting Agreement, dated as of October 28, 2021 (Eliza and Larry Becker Family 2018 Irrevocable Trust Dated May 31, 2018)

     E-5-1  

ANNEX E-6—Voting Agreement, dated as of October 28, 2021 (Jason and Jennifer Lurie Family 2018 Irrevocable Trust Dated May 31, 2018)

     E-6-1  

ANNEX E-7—Voting Agreement, dated as of October 28, 2021 (Scott and Caitlin Vogelsong Family 2018 Irrevocable Trust Dated May 31, 2018)

     E-7-1  

 

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QUESTIONS AND ANSWERS

The following questions and answers briefly address some questions that you, as a Zendesk stockholder or Momentive stockholder, may have regarding the merger and the other matters being considered at the Zendesk special meeting or the Momentive special meeting, as applicable. You are urged to carefully read this joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus in their entirety because this section may not provide all the information that is important to you regarding these matters. See “Summary” for a summary of important information regarding the merger agreement, the merger and the related transactions. Additional important information is contained in the annexes to, and the documents incorporated by reference in, this joint proxy statement/prospectus. You may obtain the information incorporated by reference in this joint proxy statement/prospectus, without charge, by following the instructions in the section titled “Where You Can Find More Information.”

Why am I receiving this joint proxy statement/prospectus?

You are receiving this joint proxy statement/prospectus because Zendesk and Momentive have entered into the merger agreement, which provides for the acquisition of Momentive by Zendesk through a merger of Merger Sub with and into Momentive, with Momentive continuing as the surviving corporation in the merger and as a wholly owned subsidiary of Zendesk. The merger agreement, which governs the terms and conditions of the merger, is attached as Annex A hereto.

Your vote is required in connection with the merger. Zendesk and Momentive are sending these materials to their respective stockholders to help them decide how to vote their shares with respect to the share issuance, in the case of Zendesk, the adoption of the merger agreement, in the case of Momentive, and other important matters.

What matters am I being asked to vote on?

In order to complete the merger, among other things:

 

   

Zendesk stockholders must approve the Zendesk share issuance proposal; and

 

   

Momentive stockholders must approve the Momentive merger proposal.

Zendesk: Zendesk is holding the Zendesk special meeting to obtain approval of the Zendesk share issuance proposal. At the Zendesk special meeting, Zendesk stockholders will also be asked to consider and vote on the Zendesk adjournment proposal.

Momentive: Momentive is holding the Momentive special meeting to obtain approval of the Momentive merger proposal. At the Momentive special meeting, Momentive stockholders will also be asked to consider and vote on the Momentive compensation proposal and the Momentive adjournment proposal.

Does my vote matter?

Yes, your vote is very important, regardless of the number of shares that you own. The merger cannot be completed unless the Zendesk share issuance proposal is approved by Zendesk stockholders and the Momentive merger proposal is approved by Momentive stockholders.

The approval of the Zendesk adjournment proposal, the Momentive compensation proposal and the Momentive adjournment proposal are not required to complete the merger.

When and where will each of the special meetings take place?

Zendesk: The Zendesk special meeting will be held virtually via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time. There will not be a physical meeting location. In light of continuing public health and

 

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travel concerns arising from the coronavirus (COVID-19) outbreak, Zendesk believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Zendesk board of directors and Zendesk management. Additionally, the virtual nature of the Zendesk special meeting is generally designed to enable participation of and access by more of Zendesk stockholders while decreasing the cost of conducting the Zendesk special meeting. Zendesk stockholders will be able to virtually attend and vote at the Zendesk special meeting by visiting www.cesonlineservices.com/zen22_vm, which is referred to as the “Zendesk special meeting website.” To attend the Zendesk special meeting, you must pre-register at www.cesonlineservices.com/zen22_vm by 10:00 a.m. Pacific Time on February 24, 2022. For additional information on how to pre-register for the Zendesk special meeting, see the section titled “The Zendesk Special Meeting—Pre-Registering for the Zendesk Special Meeting.”

Momentive: The Momentive special meeting will be held virtually via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time. There will not be a physical meeting location. In light of continuing public health and travel concerns arising from the coronavirus (COVID-19) outbreak, Momentive believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Momentive board of directors and Momentive management. Momentive stockholders will be able to virtually attend and vote at the Momentive special meeting by visiting www.cesonlineservices.com/mntv22_vm, which is referred to as the “Momentive special meeting website.” To attend the Momentive special meeting, you must pre-register at www.cesonlineservices.com/mntv22_vm by 10:00 a.m. Pacific Time on February 24, 2022. For additional information on how to pre-register for the Momentive special meeting see the section titled “The Momentive Special Meeting—Pre-Registering for the Momentive Special Meeting.

Even if you plan to virtually attend your respective company’s special meeting, Zendesk and Momentive recommend that you vote by proxy in advance as described below so that your vote will be counted if you later decide not to or become unable to virtually attend the applicable special meeting.

What will Momentive stockholders receive for their shares of Momentive common stock if the merger is completed?

If the merger is completed, each share of Momentive common stock outstanding as of immediately prior to the effective time will be converted into the right to receive 0.225 of a share of Zendesk common stock and a cash payment (without interest and less any applicable withholding taxes) for any fractional shares of Zendesk common stock resulting from such calculation.

Because Zendesk will issue a fixed number of shares of Zendesk common stock in exchange for each share of Momentive common stock, the value of the merger consideration that Momentive stockholders will receive in the merger will depend on the market price of shares of Zendesk common stock at the time the merger is completed. The market price of shares of Zendesk common stock that Momentive stockholders receive at the time the merger is completed could be greater than, less than or the same as the market price of shares of Zendesk common stock on the date of this joint proxy statement/prospectus or on the date of the Zendesk special meeting and the Momentive special meeting. Accordingly, you should obtain current market quotations for Zendesk common stock and Momentive common stock before deciding how to vote on the Zendesk share issuance proposal and the Momentive merger proposal, as applicable. Zendesk common stock is traded on the NYSE and Momentive common stock is traded on Nasdaq, under the symbols “ZEN” and “MNTV,” respectively. Shares of Zendesk common stock will continue trading on the NYSE under the symbol “ZEN” after completion of the merger. For more information regarding the merger consideration to be received by Momentive stockholders if the merger is completed, see the section titled “The Merger Agreement—Merger Consideration.”

How does the Zendesk board of directors recommend that I vote at the Zendesk special meeting?

The Zendesk board of directors unanimously recommends that you vote “FOR” the Zendesk share issuance proposal and “FOR” the Zendesk adjournment proposal.

Other than with respect to continued service for, employment by and the right to continued indemnification by the combined company, as of the date of this joint proxy statement/prospectus, Zendesk directors and executive

 

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officers do not have interests in the merger that are different from, or in addition to, the interests of other Zendesk stockholders generally. See the section titled “Interests of Zendesk Directors and Executive Officers in the Merger.”

How does the Momentive board of directors recommend that I vote at the Momentive special meeting?

The Momentive board of directors unanimously recommends that you vote “FOR” the Momentive merger proposal, “FOR” the Momentive compensation proposal and “FOR” the Momentive adjournment proposal.

In considering the recommendations of the Momentive board of directors, Momentive stockholders should be aware that Momentive directors and executive officers have interests in the merger that are different from, or in addition to, their interests as Momentive stockholders generally. These interests may include, among others, the payment of severance benefits and acceleration of outstanding Momentive equity awards upon certain terminations of employment or service, and the combined company’s agreement to indemnify Momentive directors and executive officers against certain claims and liabilities. For a more complete description of these interests, see the section titled “Interests of Momentive Directors and Executive Officers in the Merger.”

Who is entitled to vote at each special meeting?

Zendesk

All holders of record of shares of Zendesk common stock who held shares at the close of business on January 3, 2022, the Zendesk record date, are entitled to receive notice of, and to vote at, the Zendesk special meeting. Virtual attendance at the Zendesk special meeting via the Zendesk special meeting website is not required to vote. See below and the section titled “The Zendesk Special Meeting—Methods of Voting” for instructions on how to vote without virtually attending the Zendesk special meeting.

Momentive

All holders of record of shares of Momentive common stock who held shares at the close of business on January 3, 2022, the Momentive record date, are entitled to receive notice of, and to vote at, the Momentive special meeting. Virtual attendance at the Momentive special meeting via the Momentive special meeting website is not required to vote. See below and the section titled “The Momentive Special Meeting—Methods of Voting” for instructions on how to vote without virtually attending the Momentive special meeting.

What is a proxy?

A proxy is a stockholder’s legal designation of another person to vote shares owned by such stockholder on their behalf. If you are a stockholder of record, you can vote by proxy over the internet, by telephone or by mail by following the instructions provided in the enclosed proxy card. If you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.

How many votes do I have at each special meeting?

Zendesk

Each Zendesk stockholder is entitled to one vote on each proposal for each share of Zendesk common stock held of record at the close of business on the Zendesk record date. At the close of business on the Zendesk record date, there were 121,595,601 shares of Zendesk common stock outstanding.

Momentive

Each Momentive stockholder is entitled to one vote on each proposal for each share of Momentive common stock held of record at the close of business on the Momentive record date. At the close of business on the Momentive record date, there were 150,398,525 shares of Momentive common stock outstanding.

 

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What constitutes a quorum for each special meeting?

A quorum is the minimum number of shares required to be represented, either through virtual attendance or through representation by proxy, to hold a valid meeting.

Zendesk

The holders of a majority of the issued and outstanding shares of Zendesk common stock entitled to vote at the Zendesk special meeting must be present in person or represented by proxy in order to constitute a quorum for the transaction of business at the Zendesk special meeting. Virtual attendance at the Zendesk special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Zendesk special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Zendesk special meeting. Since all of the proposals currently expected to be voted on at the Zendesk special meeting are considered non-routine matters, shares held in “street name” through a bank, broker or other nominee will not be counted as present for the purpose of determining the existence of a quorum if such bank, broker or nominee does not have instructions to vote on any such proposals.

Momentive

The holders of a majority of the issued and outstanding shares of Momentive common stock entitled to vote at the Momentive special meeting must be present in person or represented by proxy in order to constitute a quorum for the transaction of business at the Momentive special meeting. Virtual attendance at the Momentive special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Momentive special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Momentive special meeting. Since all of the proposals currently expected to be voted on at the Momentive special meeting are considered non-routine matters, shares held in “street name” through a bank, broker or other nominee will not be counted as present for the purpose of determining the existence of a quorum if such bank, broker or nominee does not have instructions to vote on any such proposals.

What happens if the merger is not completed?

If the Zendesk share issuance proposal is not approved by Zendesk stockholders, if the Momentive merger proposal is not approved by Momentive stockholders or if the merger is not completed for any other reason, Momentive stockholders will not receive the merger consideration or any other consideration in connection with the merger, and their shares of Momentive common stock will remain outstanding.

If the merger is not completed, Momentive will remain an independent public company, the Momentive common stock will continue to be listed and traded on Nasdaq under the symbol “MNTV” and Zendesk will not complete the share issuance contemplated by the merger agreement, regardless of whether the Zendesk share issuance proposal has been approved by Zendesk stockholders.

If the merger agreement is terminated under specified circumstances, Zendesk or Momentive may be required to pay the other a termination fee of $150 million. See the section titled “The Merger Agreement—Termination Fees.”

How can I vote my shares at my respective special meeting?

Zendesk

To vote your shares at the Zendesk special meeting, you must pre-register for the Zendesk special meeting at www.cesonlineservices.com/zen22_vm by 10:00 a.m. Pacific Time on February 24, 2022. For additional information on how to pre-register for the Zendesk special meeting, see the section titled “The Zendesk Special Meeting—Pre-Registering for the Zendesk Special Meeting.”

 

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Shares held directly in your name as a Zendesk stockholder of record may be voted at the Zendesk special meeting via the Zendesk special meeting website at www.cesonlineservices.com/zen22_vm, provided you have pre-registered for the Zendesk special meeting. See the section titled “The Zendesk Special Meeting—Virtually Attending the Zendesk Special Meeting.”

Shares held in “street name” may be voted at the Zendesk special meeting via the Zendesk special meeting website at www.cesonlineservices.com/zen22_vm only if you obtain a legal proxy from your bank, broker or other nominee, and provided you have pre-registered for the Zendesk special meeting. See the section titled “The Zendesk Special Meeting—Virtually Attending the Zendesk Special Meeting.”

Momentive

To vote your shares at the Momentive special meeting, you must pre-register for the Momentive special meeting at www.cesonlineservices.com/mntv22_vm by 10:00 a.m. Pacific Time on February 24, 2022. For additional information on how to pre-register for the Momentive special meeting, see the section titled “The Momentive Special Meeting—Pre-Registering for the Momentive Special Meeting.”

Shares held directly in your name as a Momentive stockholder of record may be voted at the Momentive special meeting via the Momentive special meeting website at www.cesonlineservices.com/mntv22_vm, provided you have pre-registered for the Momentive special meeting. See the section titled “The Momentive Special Meeting—Virtually Attending the Momentive Special Meeting.”

Shares held in “street name” may be voted at the Momentive special meeting via the Momentive special meeting website at www.cesonlineservices.com/mntv22_vm only if you obtain a legal proxy from your bank, broker or other nominee, and provided you have pre-registered for the Momentive special meeting. See the section titled “The Momentive Special Meeting—Virtually Attending the Momentive Special Meeting.”

Even if you plan to virtually attend your respective company’s special meeting via the applicable special meeting website, Zendesk and Momentive recommend that you vote by proxy in advance as described below so that your vote will be counted if you later decide not to or become unable to virtually attend the respective special meeting.

For additional information on virtually attending the special meetings, see the sections titled “The Zendesk Special Meeting” and “The Momentive Special Meeting.”

How can I vote my shares without virtually attending my company’s special meeting?

Whether you hold your shares directly as a stockholder of record of Zendesk or Momentive or beneficially in “street name,” you may direct your vote by proxy without virtually attending the Zendesk or Momentive special meeting, as applicable.

Zendesk

If you are a stockholder of record, you can vote by proxy:

 

   

by Internet 24 hours a day, seven days a week, until 8:00 a.m. Pacific Time on February 25, 2022 by accessing the website indicated on the enclosed proxy card and following the instructions (have your proxy card in hand when you visit the website);

 

   

by telephone until 8:00 a.m. Pacific Time on February 25, 2022 by using the telephone number indicated on the enclosed proxy card and following the instructions (have your proxy card in hand when you call); or

 

   

by completing and mailing your proxy card in accordance with the instructions provided on the proxy card.

If you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.

For additional information on voting procedures, see the section titled “The Zendesk Special Meeting.”

 

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Momentive

If you are a stockholder of record, you can vote by proxy:

 

   

by Internet 24 hours a day, seven days a week, by accessing the website indicated on the enclosed proxy card and following the instructions (have your proxy card in hand when you visit the website);

 

   

by telephone by using the telephone number indicated on the enclosed proxy card and following the instructions (have your proxy card in hand when you call); or

 

   

by completing and mailing your proxy card in accordance with the instructions provided on the proxy card.

If you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.

For additional information on voting procedures, see the section titled “The Momentive Special Meeting.”

What is a “broker non-vote”?

Under NYSE and Nasdaq rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. All of the proposals currently expected to be voted on at the Zendesk special meeting and Momentive special meeting are “non-routine” matters.

A “broker non-vote” occurs on a proposal when (i) a bank, broker or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other proposals without instructions from the beneficial owner of the shares, and (ii) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. Because all of the proposals currently expected to be voted on at the Zendesk special meeting and Momentive special meeting are non-routine matters for which brokers do not have discretionary authority to vote, Zendesk and Momentive do not expect there to be any broker non-votes at the Zendesk or Momentive special meetings.

What stockholder vote is required for the approval of each proposal at the Zendesk special meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Zendesk special meeting?

Zendesk Proposal 1: Zendesk Share Issuance Proposal

Assuming a quorum is present at the Zendesk special meeting, approval of the Zendesk share issuance proposal requires the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal. If you are a Zendesk stockholder and fail to vote, fail to instruct your bank, broker or other nominee to vote, or abstain from voting, it will have no effect on the result of the vote on the Zendesk share issuance proposal, provided that a quorum is otherwise present at the Zendesk special meeting.

Zendesk Proposal 2: Zendesk Adjournment Proposal

Assuming a quorum is present at the Zendesk special meeting, approval of the Zendesk adjournment proposal requires the affirmative vote of a majority of the votes cast on the Zendesk adjournment proposal. If you are a Zendesk stockholder and fail to vote, fail to instruct your bank, broker or other nominee to vote, or abstain from voting, it will have no effect on the result of the vote on the Zendesk adjournment proposal, provided that a quorum is otherwise present at the Zendesk special meeting.

 

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What stockholder vote is required for the approval of each proposal at the Momentive special meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Momentive special meeting?

Momentive Proposal 1: Momentive Merger Proposal

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive merger proposal requires the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date. If you are a Momentive stockholder and fail to vote, fail to instruct your bank, broker or other nominee to vote or abstain from voting, it will have the same effect as a vote “AGAINST” the Momentive merger proposal.

Momentive Proposal 2: Momentive Compensation Proposal

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive compensation proposal requires the affirmative vote of a majority of the shares of Momentive common stock present in person or by proxy at the Momentive special meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Momentive compensation proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the Momentive compensation proposal will have the same effect as a vote “AGAINST” the Momentive compensation proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive compensation proposal, it will have the same effect as a vote “AGAINST” the Momentive compensation proposal.

Momentive Proposal 3: Momentive Adjournment Proposal

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive adjournment proposal requires the affirmative vote of a majority of the shares of Momentive common stock present in person or by proxy at the Momentive special meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Momentive adjournment proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the Momentive adjournment proposal will have the same effect as a vote “AGAINST” the Momentive adjournment proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive adjournment proposal, it will have the same effect as a vote “AGAINST” the Momentive adjournment proposal.

Why am I being asked to consider and vote on a proposal to approve, by non-binding advisory vote, the merger-related compensation for Momentive named executive officers, which is referred to as the Momentive compensation proposal? What happens if Momentive stockholders do not approve, by non-binding advisory vote, the Momentive compensation proposal?

Under SEC rules, Momentive is required to seek a non-binding advisory vote of its stockholders relating to the compensation that may be paid or become payable to Momentive named executive officers that is based on or otherwise relates to the merger (also known as “golden parachute” compensation).

Because the vote on the proposal to approve the Momentive compensation proposal is advisory in nature, the outcome of the vote will not be binding upon Momentive or the combined company. Accordingly, the merger-

 

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related compensation, which is described in the section titled “Interests of Momentive Directors and Executive Officers in the Merger,” may be paid to Momentive’s named executive officers even if Momentive stockholders do not approve the Momentive compensation proposal.

What if I hold shares of both Zendesk and Momentive common stock?

If you are both a Zendesk stockholder and a Momentive stockholder, you will receive two separate packages of proxy materials. A vote cast as a Zendesk stockholder will not count as a vote cast as a Momentive stockholder, and a vote cast as a Momentive stockholder will not count as a vote cast as a Zendesk stockholder. Therefore, please follow the instructions received with each set of materials you receive in order to submit separate proxies for your shares of Zendesk common stock and your shares of Momentive common stock.

What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name”?

If your shares of Zendesk common stock or Momentive common stock are registered directly in your name with the transfer agent of Zendesk or Momentive, respectively, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote directly at the applicable special meeting. You may also grant a proxy directly to Zendesk or Momentive, as applicable, or to a third party to vote your shares at the applicable special meeting.

If your shares of Zendesk common stock or Momentive common stock are held by a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name.” Your bank, broker or other nominee will send you, as the beneficial owner, a package describing the procedures for voting your shares. You should follow the instructions provided by your bank, broker or other nominee to vote your shares. In order to virtually attend and vote at the Zendesk special meeting via the Zendesk special meeting website or at the Momentive special meeting via the Momentive special meeting website, you will need to obtain a legal proxy from your bank, broker or other nominee.

If my shares of Zendesk common stock or Momentive common stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote those shares for me?

No. Your bank, broker or other nominee will only be permitted to vote your shares of Zendesk common stock or Momentive common stock, as applicable, at the applicable special meeting if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your shares. Banks, brokers and other nominees who hold shares of Zendesk common stock or Momentive common stock in “street name” for their customers have authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are prohibited from exercising their voting discretion with respect to non-routine matters, which include all of the proposals currently expected to be voted on at the Zendesk special meeting and Momentive special meeting. As a result, absent specific instructions from the beneficial owner of such shares, banks, brokers and other nominees are not empowered to vote such shares.

What should I do if I receive more than one set of voting materials for the same special meeting?

If you hold shares of Zendesk common stock or Momentive common stock in “street name” and also directly in your name as a stockholder of record or otherwise, or if you hold shares of Zendesk common stock or Momentive common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the same special meeting.

Record Holders. For shares held directly, please vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in

 

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the enclosed postage-paid envelope, in order to ensure that all of your shares of Zendesk common stock or Momentive common stock are voted.

Shares Held in “Street Name.” For shares held in “street name” through a bank, broker or other nominee, you should follow the procedures provided by your bank, broker or other nominee to submit a proxy or vote your shares.

If a stockholder gives a proxy, how are the shares of Zendesk common stock or Momentive common stock voted?

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card will vote your shares of Zendesk common stock or Momentive common stock, as applicable, in the way that you indicate. For each item before the Zendesk or Momentive special meeting, as applicable, you may specify whether your shares of Zendesk common stock or Momentive common stock, as applicable, should be voted “for” or “against,” or abstain from voting.

For more information regarding how your shares will be voted if you properly sign, date and return a proxy card, but do not indicate how your Zendesk common stock or Momentive common stock, as applicable, should be voted, see “How will my shares be voted if I return a blank proxy?

How will my shares be voted if I return a blank proxy?

Zendesk

If you sign, date and return your proxy and do not indicate how you want your shares of Zendesk common stock to be voted, then your shares of Zendesk common stock will be voted in accordance with the recommendation of the Zendesk board of directors: “FOR” the Zendesk share issuance proposal and “FOR” the Zendesk adjournment proposal.

Momentive

If you sign, date and return your proxy and do not indicate how you want your shares of Momentive common stock to be voted, then your shares of Momentive common stock will be voted in accordance with the recommendation of the Momentive board of directors: “FOR” the Momentive merger proposal, “FOR” the Momentive compensation proposal and “FOR” the Momentive adjournment proposal.

Can I change my vote after I have submitted my proxy?

Any Zendesk stockholder or Momentive stockholder giving a proxy has the right to revoke the proxy and change their vote before the proxy is voted at the applicable special meeting by doing any of the following:

 

   

subsequently submitting a new proxy (including over the internet or telephone) for the applicable special meeting that is received by the deadline specified on the accompanying proxy card;

 

   

giving written notice of your revocation to Zendesk’s Corporate Secretary or Momentive’s Corporate Secretary, as applicable; or

 

   

virtually attending and voting at the applicable special meeting via the applicable special meeting website. Note that a proxy will not be revoked if you attend, but do not vote at, the applicable special meeting.

Execution or revocation of a proxy will not in any way affect your right to virtually attend and vote at the applicable special meeting via the applicable special meeting website. See the sections titled “The Zendesk Special Meeting—Revocability of Proxies” and “The Momentive Special Meeting—Revocability of Proxies.”

 

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If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee?

If your shares are held in the name of a bank, broker or other nominee and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions.

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

The preliminary voting results for each special meeting are expected to be announced at that special meeting. In addition, within four business days following certification of the final voting results, each of Zendesk and Momentive will file the final voting results of its respective special meeting (or, if the final voting results have not yet been certified, the preliminary results) with the SEC on a Current Report on Form 8-K.

Do Momentive stockholders have dissenters’ or appraisal rights?

Momentive stockholders are not entitled to appraisal or dissenters’ rights under the DGCL in connection with the merger. If Momentive stockholders are not in favor of the merger, they may vote against or choose to abstain from voting on the Momentive merger proposal. See the section titled “No Appraisal Rights.” Information about how Momentive stockholders may vote on the proposals being considered in connection with the merger can be found in the section titled “The Momentive Special Meeting.”

Are there any risks that I should consider in deciding whether to vote for the approval of the Zendesk share issuance proposal or the Momentive merger proposal?

Yes. You should read and carefully consider the risk factors set forth in the section titled “Risk Factors.” You also should read and carefully consider the risk factors relating to Zendesk and Momentive that are contained in the documents that are incorporated by reference in this joint proxy statement/prospectus.

What happens if I sell my shares of Zendesk common stock or Momentive common stock after the respective record date but before the respective special meeting?

The Zendesk record date is earlier than the date of the Zendesk special meeting, and the Momentive record date is earlier than the date of the Momentive special meeting. If you sell or otherwise transfer your shares of Zendesk common stock or Momentive common stock after the applicable record date but before the applicable special meeting, you will, unless special arrangements are made, retain your right to vote at the applicable special meeting.

Who will solicit and pay the cost of soliciting proxies?

Zendesk has engaged MacKenzie Partners, Inc., which is referred to as “MacKenzie Partners,” to assist in the solicitation of proxies for the Zendesk special meeting. Zendesk estimates that it will pay MacKenzie Partners a fee of approximately $150,000, plus reimbursement for certain out-of-pocket fees and expenses. Zendesk has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Momentive has engaged Innisfree M&A Incorporated, which is referred to as “Innisfree,” to assist in the solicitation of proxies for the Momentive special meeting. Momentive estimates that it will pay Innisfree a fee of approximately $100,000, plus reimbursement for certain out-of-pocket fees and expenses. Momentive has agreed to indemnify Innisfree against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Zendesk and Momentive also may reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of Zendesk and

 

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Momentive common stock, respectively. Zendesk and Momentive directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.

When is the merger expected to be completed?

Subject to the satisfaction or waiver of the closing conditions described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger,” including approval of the Zendesk share issuance proposal by Zendesk stockholders and approval of the Momentive merger proposal by Momentive stockholders, the merger is currently expected to be completed in the first half of 2022. However, neither Zendesk nor Momentive can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion of the merger is subject to conditions and factors beyond the control of both companies. Zendesk and Momentive hope to complete the merger as soon as reasonably practicable. Also see the section titled “The Merger—Conditions to the Completion of the Merger.

What respective equity stakes will Zendesk stockholders and Momentive stockholders hold in the combined company immediately following the merger?

Based on the number of shares of Zendesk and Momentive common stock outstanding on January 3, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, upon completion of the merger, the current Zendesk stockholders are expected to own approximately 78% of the outstanding shares of Zendesk common stock and former Momentive stockholders are expected to own approximately 22% of the outstanding shares of Zendesk common stock. The relative ownership interests of Zendesk stockholders and former Momentive stockholders in the combined company immediately following the merger will depend on the number of shares of Zendesk common stock and Momentive common stock issued and outstanding immediately prior to the merger.

If I am a Momentive stockholder, how will I receive the merger consideration to which I am entitled?

If, at the effective time, you hold your shares of Momentive common stock in book-entry form, whether through The Depository Trust Company, which is referred to as “DTC,” or otherwise, you will not be required to take any specific actions to exchange your shares of Momentive common stock for shares of Zendesk common stock . Such shares will, following the effective time, be automatically exchanged for shares of Zendesk common stock (in book-entry form) and cash in lieu of any fractional shares of Zendesk common stock to which you are entitled. If, at the effective time, you instead hold your shares of Momentive common stock in certificated form, then, after receiving the proper documentation from you following the effective time, the exchange agent will deliver to you the shares of Zendesk common stock (in book-entry form) and cash in lieu of any fractional shares of Zendesk common stock to which you are entitled. See the section titled “The Merger Agreement—Exchange of Shares.”

What should I do now?

You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes. Then, you may vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, so that your shares will be voted in accordance with your instructions.

How can I find more information about Zendesk and Momentive?

You can find more information about Zendesk and Momentive from various sources described in the section titled “Where You Can Find More Information.”

 

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Whom do I call if I have questions about the special meetings or the merger?

If you have questions about the special meetings or the merger, or desire additional copies of this joint proxy statement/prospectus or additional proxies, you may contact your company’s proxy solicitor:

 

If you are a Zendesk stockholder:

 

LOGO

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

(800) 322-2885

proxy@mackenziepartners.com

  

If you are a Momentive stockholder:

 

LOGO

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders may call toll free: (877) 825-8772

Banks and Brokers may call collect: (212) 750-5833

 

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SUMMARY

For your convenience, provided below is a brief summary of certain information contained in this joint proxy statement/prospectus. This summary highlights selected information from this joint proxy statement/prospectus and does not contain all of the information that may be important to you as a Zendesk stockholder or Momentive stockholder. To understand the merger fully and for a more complete description of the terms of the merger, you should read carefully this entire joint proxy statement/prospectus, its annexes and the other documents to which you are referred. Items in this summary include a page reference directing you to a more complete description of those items. You may obtain the information incorporated by reference in this joint proxy statement/prospectus, without charge, by following the instructions under “Where You Can Find More Information.”

The Parties to the Merger (Page 49)

Zendesk, Inc.

Founded in 2007, Zendesk is a service-first customer relationship management company, built to give organizations of all sizes, in every industry, the ability to deliver a transparent, responsive, and empowering customer experience. With solutions designed to address an increasingly broad set of customer interactions, Zendesk allows organizations to deliver omnichannel customer service and customize and build apps across the customer journey. Zendesk has evolved its offerings over time to product and platform solutions that work together to help organizations understand the broader customer journey, improve communications across all channels, and engage where and when it’s needed most. Zendesk’s principal executive offices are located at 989 Market Street, San Francisco, California 94103, and its telephone number is (415) 418-7506.

Momentive Global Inc.

Founded under the name “SurveyMonkey” in 1999, Momentive is an agile experience management company focused on helping customers shape what’s next. Momentive’s platform empowers users to collect, analyze, and act on feedback from customers, employees, website and app users, and market research audiences. Its products enable more than 345,000 organizations to deliver better customer experiences, increase employee retention, and unlock growth and innovation. Momentive offers SaaS feedback solutions across three major product categories—Surveys, Customer Experience, and Market Research. Momentive’s principal executive offices are located at One Curiosity Way, San Mateo, California 94403, and its telephone number is (650) 543-8400.

Milky Way Acquisition Corp.

Merger Sub was formed by Zendesk solely in contemplation of the merger, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the merger agreement. By operation of the merger, Merger Sub will be merged with and into Momentive, with Momentive continuing as the surviving corporation and as a wholly owned subsidiary of Zendesk. Merger Sub’s principal executive offices are located at 989 Market Street, San Francisco, California 94103, and its telephone number is (415) 418-7506.

The Merger and the Merger Agreement (Pages 70 and 133)

The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A hereto. Zendesk and Momentive encourage you to read the merger agreement carefully and in its entirety, as it is the legal document that governs the merger.

The merger agreement provides that, subject to the terms and conditions of the merger agreement, Merger Sub will be merged with and into Momentive, with Momentive continuing as the surviving corporation in the merger and as a wholly owned subsidiary of Zendesk.

 

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Merger Consideration (Page 134)

At the effective time, each share of Momentive common stock that is outstanding immediately prior to the effective time (other than shares of Momentive common stock held, directly or indirectly, by Momentive or Zendesk, any of their respective wholly owned subsidiaries, or held in Momentive’s treasury) will be converted into the right to receive (a) 0.225 of a share of Zendesk common stock, (b) any cash in lieu of fractional shares of Zendesk common stock that such holder of Momentive common stock is entitled to receive pursuant to the merger agreement, and (c) any dividends or other distributions that such holder of Momentive common stock is entitled to receive pursuant to the merger agreement.

The exchange ratio is fixed, which means that it will not change between now and the date the merger is completed, regardless of whether the market price of Zendesk common stock or Momentive common stock changes.

Treatment of Momentive Equity Awards (Page 136)

With respect to Momentive’s equity awards, the merger agreement provides that, at the effective time:

 

   

each Momentive option held by a continuing employee or continuing service provider (each as defined in the section titled “The Merger Agreement—Treatment of Momentive Equity Awards”) will be assumed and converted into an option to acquire a number of shares of Zendesk common stock determined based on the exchange ratio (with the exercise price with respect to such option being adjusted based on the exchange ratio);

 

   

each vested Momentive option (a) with an exercise price that is less than the amount in cash equal to the equity award cash consideration amount (as defined in the section titled “The Merger Agreement—Treatment of Momentive Equity Awards”) and (b) that is held by a person who is not a continuing employee or continuing service provider will be canceled and the holder will receive an amount in cash equal to the product of (i) the total number of shares of Momentive common stock subject to such Momentive option, multiplied by (ii) the excess of (A) the equity award cash consideration amount over (B) the per share exercise price for such Momentive option;

 

   

each Momentive option that is unvested and each Momentive option that is vested and with an exercise price that is greater than or equal to the equity award cash consideration amount that, in each such case, is held by a person who is not a continuing employee or a continuing service provider will be cancelled for no consideration;

 

   

each Momentive restricted stock unit, which is referred to as a “Momentive RSU,” that is unvested immediately prior to the effective time and held by a continuing employee or continuing service provider will be automatically converted into a Zendesk restricted stock unit denominated in shares of Zendesk common stock based on the exchange ratio;

 

   

each Momentive RSU that is unvested immediately prior to the effective time and held by a person who is not a continuing employee or continuing service provider will be cancelled for no consideration;

 

   

each share of Momentive restricted stock that is unvested immediately prior to the effective time and held by a continuing employee or continuing service provider will be converted into a number of shares of Zendesk restricted stock based on the exchange ratio, provided that, any holder of such awards who would otherwise be entitled to receive a fraction of a share of Zendesk common stock will, in lieu of such fraction of a share, be paid the equivalent dollar amount in cash in accordance with the terms of the merger agreement;

 

   

each share of Momentive restricted stock that is unvested immediately prior to the effective time and held by a person who is not a continuing employee or continuing service provider will be cancelled for no consideration; and

 

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each Momentive RSU and each share of Momentive restricted stock that is outstanding and vested (including those Momentive RSUs and shares of Momentive restricted stock that will become vested immediately prior to or as of the effective time) will be cancelled and the holder will be entitled to receive a number of shares of Zendesk common stock based on the exchange ratio; provided that, any holder of such awards who would otherwise be entitled to receive a fraction of a share of Zendesk common stock will, in lieu of such fraction of a share, be paid the equivalent dollar amount in cash in accordance with the terms of the merger agreement.

For more information, see the section titled “The Merger Agreement—Treatment of Momentive Equity Awards.”

Zendesk’s Reasons for the Merger and Recommendation of the Zendesk Board of Directors (Page 88)

The Zendesk board of directors unanimously recommends that you vote “FOR” the Zendesk share issuance proposal and “FOR” the Zendesk adjournment proposal. For a description of factors considered by the Zendesk board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the merger and the share issuance, and additional information on the recommendation of the Zendesk board of directors, see the section titled “The Merger—Zendesk’s Reasons for the Merger and Recommendation of the Zendesk Board of Directors.”

Momentive’s Reasons for the Merger and Recommendation of the Momentive Board of Directors (Page 93)

The Momentive board of directors unanimously recommends that you vote “FOR” the Momentive merger proposal, “FOR” the Momentive compensation proposal and “FOR” the Momentive adjournment proposal. For a description of factors considered by the Momentive board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the merger, and additional information on the recommendation of the Momentive board of directors, see the section titled “The Merger—Momentive’s Reasons for the Merger and Recommendation of the Momentive Board of Directors.”

Opinion of Zendesk’s Financial Advisor

Opinion of Goldman Sachs & Co. LLC (Page 97; Annex B)

Goldman Sachs delivered its opinion to the Zendesk board of directors that, as of October 28, 2021 and based upon and subject to the factors and assumptions set forth therein, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to Zendesk.

The full text of the written opinion of Goldman Sachs, dated October 28, 2021, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this joint proxy statement/prospectus as Annex B. The summary of Goldman Sachs’ opinion contained in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Zendesk board of directors in connection with its consideration of the transaction contemplated by the merger agreement. The Goldman Sachs opinion is not a recommendation as to how any holder of Zendesk common stock should vote with respect to the transaction contemplated by the merger agreement or any other matter.

For additional information, see the section titled “The Merger—Opinion of Zendesk’s Financial Advisor—Opinion of Goldman Sachs & Co LLC” and the full text of the written opinion of Goldman Sachs attached as Annex B to this joint proxy statement/prospectus.

 

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Opinions of Momentive’s Financial Advisors

Opinion of Allen & Company LLC (Page 107; Annex C)

Momentive has engaged Allen & Company as a financial advisor to Momentive in connection with the merger. In connection with this engagement, Allen & Company delivered a written opinion, dated October 28, 2021, to the Momentive board of directors as to the fairness, from a financial point of view and as of the date of such opinion, of the exchange ratio provided for in the merger agreement. The full text of Allen & Company’s written opinion, dated October 28, 2021, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached to this joint proxy statement/prospectus as Annex C and is incorporated by reference herein in its entirety. The description of Allen & Company’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Allen & Company’s opinion. Allen & Company’s opinion and advisory services were intended for the benefit and use of the Momentive board of directors (in its capacity as such) in connection with its evaluation of the exchange ratio from a financial point of view and did not address any other terms, aspects or implications of the merger. Allen & Company’s opinion did not constitute a recommendation as to the course of action that Momentive (or the Momentive board of directors or any committee thereof) should pursue in connection with the merger or otherwise address the merits of the underlying decision by Momentive to engage in the merger, including in comparison to other strategies or transactions that might be available to Momentive or which Momentive might engage in or consider. Allen & Company’s opinion does not constitute advice or a recommendation to any securityholder or other person as to how to vote or act on any matter relating to the merger or otherwise.

For additional information, see the section titled “The Merger—Opinions of Momentives Financial Advisors—Opinion of Allen & Company LLC” and the full text of the written opinion of Allen & Company attached as Annex C to this joint proxy statement/prospectus.

Opinion of J.P. Morgan Securities LLC (Page 115; Annex D)

Pursuant to an engagement letter, Momentive retained J.P. Morgan as a financial advisor in connection with the merger.

At the meeting of the Momentive board of directors on October 28, 2021, J.P. Morgan rendered its oral opinion to the Momentive board of directors that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Momentive common stockholders. J.P. Morgan confirmed its October 28, 2021 oral opinion by delivering its written opinion to the Momentive board of directors, dated October 28, 2021, that, as of such date, the exchange ratio in the proposed merger was fair, from a financial point of view, to such stockholders.     

The full text of the written opinion of J.P. Morgan dated October 28, 2021, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex D to this joint proxy statement/prospectus and is incorporated by reference herein. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Momentive stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the Momentive board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the merger, was directed only to the exchange ratio in the merger and did not address any other aspect of the merger. J.P. Morgan expressed no opinion as to the fairness of the exchange ratio to the holders of any other class of securities, creditors or other constituencies of Momentive or as to the underlying decision by Momentive to engage in the merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its

 

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entirety by reference to the full text of such opinion. The opinion does not constitute a recommendation to any stockholder of Momentive as to how such stockholder should vote with respect to the merger or any other matter.

For additional information, see the section titled “The Merger—Opinions of Momentive’s Financial Advisors—Opinion of J.P. Morgan Securities LLC” and the full text of the written opinion of J.P. Morgan attached as Annex D to this joint proxy statement/prospectus.

The Zendesk Special Meeting (Page 50)

The Zendesk special meeting will be held in a virtual meeting format via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time. Zendesk stockholders will be able to virtually attend and vote at the Zendesk special meeting by visiting the Zendesk special meeting website at www.cesonlineservices.com/zen22_vm. To attend the Zendesk special meeting, you must pre-register at www.cesonlineservices.com/zen22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

The purposes of the Zendesk special meeting are as follows:

 

   

Zendesk Proposal 1: Approval of the Share Issuance. To consider and vote on the Zendesk share issuance proposal; and

 

   

Zendesk Proposal 2: Adjournment of the Zendesk Special Meeting. To consider and vote on the Zendesk adjournment proposal.

Approval of the Zendesk share issuance proposal by Zendesk stockholders is a condition to the merger.

Only holders of record of shares of Zendesk common stock outstanding at the close of business on January 3, 2022, the Zendesk record date, are entitled to notice of, and to vote at, the Zendesk special meeting or any adjournment or postponement thereof. Each Zendesk stockholder is entitled to one vote on each proposal for each share of Zendesk common stock held of record at the close of business on the Zendesk record date.

A quorum of Zendesk stockholders is necessary to conduct business at the Zendesk special meeting. The presence in person or by proxy of the holders of a majority of the issued and outstanding shares of Zendesk common stock entitled to vote at the Zendesk special meeting will constitute a quorum. Virtual attendance at the Zendesk special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Zendesk special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Zendesk special meeting. Since all of the proposals for consideration at the Zendesk special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Zendesk stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals brought before the Zendesk special meeting.

Assuming a quorum is present at the Zendesk special meeting, approval of the Zendesk share issuance proposal requires the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal. The failure to vote, failure to instruct your bank, broker or other nominee to vote, or abstention from voting will have no effect on the result of the vote on the Zendesk share issuance proposal.

Assuming a quorum is present at the Zendesk special meeting, approval of the Zendesk adjournment proposal requires the affirmative vote of a majority of the votes cast on the Zendesk adjournment proposal. The failure to vote, failure to instruct your bank, broker or other nominee to vote, or abstention from voting will have no effect on the result of the vote on the Zendesk adjournment proposal.

 

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The Momentive Special Meeting (Page 59)

The Momentive special meeting will be held virtually via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time. Momentive stockholders will be able to virtually attend and vote at the Momentive special meeting by visiting the Momentive special meeting website at www.cesonlineservices.com/mntv22_vm. To attend the Momentive special meeting, you must pre-register at www.cesonlineservices.com/mntv22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

The purposes of the Momentive special meeting are as follows:

 

   

Momentive Proposal 1: Adoption of the Merger Agreement. To consider and vote on the Momentive merger proposal;

 

   

Momentive Proposal 2: Approval, on an Advisory Non-Binding Basis, of Certain Merger-Related Compensatory Arrangements with Momentive Named Executive Officers. To consider and vote on the Momentive compensation proposal; and

 

   

Momentive Proposal 3: Adjournment of the Momentive Special Meeting. To consider and vote on the Momentive adjournment proposal.

Approval of the Momentive merger proposal by Momentive stockholders is a condition to the merger. Approval of the advisory Momentive compensation proposal is not a condition to the obligation of either Zendesk or Momentive to complete the merger.

Only holders of record of shares of Momentive common stock outstanding at the close of business on January 3, 2022, the Momentive record date, are entitled to notice of, and to vote at, the Momentive special meeting or any adjournment or postponement thereof. Each Momentive stockholder is entitled to one vote on each proposal for each share of Momentive common stock held of record at the close of business on the Momentive record date.

A quorum of Momentive stockholders is necessary to conduct business at the Momentive special meeting. The presence in person or by proxy of the holders of a majority of the issued and outstanding shares of Momentive common stock entitled to vote at the Momentive special meeting will constitute a quorum. Virtual attendance at the Momentive special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Momentive special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Momentive special meeting. Since all of the proposals for consideration at the Momentive special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Momentive stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals brought before the Momentive special meeting.

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive merger proposal requires the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date. The failure to vote, the failure to instruct your bank, broker or other nominee to vote or an abstention from voting will have the same effect as a vote “AGAINST” the Momentive merger proposal.

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive compensation proposal requires the affirmative vote of a majority of the shares of Momentive common stock that are present in person or by proxy at the Momentive special meeting and entitled to vote on the Momentive compensation proposal. Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other

 

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nominee) will have no effect on the outcome of the Momentive compensation proposal. An abstention or other failure of any shares present or represented by proxy to vote on the Momentive compensation proposal will have the same effect as a vote “AGAINST” the Momentive compensation proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive compensation proposal, it will have the same effect as a vote “AGAINST” the Momentive compensation proposal.

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive adjournment proposal requires the affirmative vote of a majority of the shares of Momentive common stock that are present in person or by proxy at the Momentive special meeting and entitled to vote on the Momentive adjournment proposal. Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Momentive adjournment proposal. An abstention or other failure of any shares present or represented by proxy to vote on the Momentive adjournment proposal will have the same effect as a vote “AGAINST” the Momentive adjournment proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive adjournment proposal, it will have the same effect as a vote “AGAINST” the Momentive adjournment proposal.

Interests of Zendesk Directors and Executive Officers in the Merger (Page 184)

Other than with respect to continued service for, employment by and the right to continued indemnification by the combined company, as of the date of this joint proxy statement/prospectus, Zendesk directors and executive officers do not have interests in the merger that are different from, or in addition to, the interests of other Zendesk stockholders generally. See the section titled “Interests of Zendesk Directors and Executive Officers in the Merger.”

Interests of Momentive Directors and Executive Officers in the Merger (Page 185)

In considering the recommendations of the Momentive board of directors, Momentive stockholders should be aware that Momentive directors and executive officers may have interests in the merger, including financial interests, which may be different from, or in addition to, the interests of Momentive stockholders generally. The Momentive board of directors was aware of and considered these interests, among other matters, in reaching its determination that the merger is fair to and in the best interests of Momentive and its stockholders, approving and declaring advisable the merger agreement and the transactions contemplated thereby, including the merger, and recommending that Momentive stockholders approve the Momentive merger proposal. These interests are discussed in more detail in the section titled “Interests of Momentive Directors and Executive Officers in the Merger.”

The benefits and financial interests that Momentive’s directors and executive officers may become eligible to receive as a result of their interests in the merger include:

 

   

Momentive equity awards, including Momentive options, Momentive RSUs and shares of Momentive restricted stock, held by Momentive executive officers that are continuing employees or service providers, will be assumed by Zendesk and converted into Zendesk equity awards, the number and estimated value of which are provided in the section titled “Interests of Momentive Directors and Executive Officers in the Merger”;

 

   

the vesting of any Momentive equity awards, including Momentive options and Momentive RSUs, held by non-employee members of the Momentive board of directors, will accelerate in full and, in the case

 

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of Momentive RSUs, become settled, the number and estimated value of which are provided in the section titled “Interests of Momentive Directors and Executive Officers in the Merger”;

 

   

the merger agreement provides that the directors and executive officers of Momentive and its subsidiaries will have the right to indemnification and continued coverage under directors’ and officers’ liability insurance policies following the merger; and

 

   

each of Momentive’s current executive officers has entered into a change in control and severance agreement with Momentive, which, among other things, provides for severance payments and benefits upon certain qualifying terminations of employment in connection with a change in control of Momentive.

For an estimate of the value of the benefits and financial interests that Momentive’s named executive officers may become eligible to receive as a result of their interests in the merger, assuming, among other things, that the merger was completed on December 1, 2021 and each such named executive officer experienced a qualifying termination of employment immediately thereafter, see the section titled “Interests of Momentive Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to Momentive Named Executive Officers—Golden Parachute Compensation.”

Certain Beneficial Owners of Zendesk Common Stock (Page 209)

At the close of business on January 3, 2022, the record date for the Zendesk special meeting, Zendesk directors and executive officers and their affiliates, as a group, owned and were entitled to vote approximately 1.01% of the shares of Zendesk common stock outstanding on such date. Although none of them has entered into any agreement obligating them to do so, Zendesk currently expects that all Zendesk directors and executive officers will vote their shares “FOR” the Zendesk share issuance proposal and “FOR” the Zendesk adjournment proposal. For more information regarding the security ownership of Zendesk directors and executive officers, see the section titled “Certain Beneficial Owners of Zendesk Common Stock—Security Ownership of Zendesk Directors and Executive Officers.”

Certain Beneficial Owners of Momentive Common Stock (Page 212)

At the close of business on January 3, 2022, the record date for the Momentive special meeting, Momentive directors and executive officers, and their affiliates, as a group, owned and were entitled to vote 12.53% of the total outstanding shares of Momentive common stock, including the shares covered by voting agreements described below entered into by Zander Lurie, the Chief Executive Officer and a director of Momentive, and certain of his affiliates, Ryan Finley, a director of Momentive, and certain of his affiliates, and a stockholder of Momentive affiliated with Sheryl Sandberg, a director of Momentive. For more information regarding the voting agreements, see the section titled “Voting Agreements.”

Momentive currently expects that all Momentive directors and Momentive officers will vote their shares “FOR” the Momentive merger proposal, “FOR” the Momentive compensation proposal and “FOR” the Momentive adjournment proposal. For more information regarding the security ownership of Momentive directors and executive officers, see the section titled “Certain Beneficial Owners of Momentive Common Stock.”

Regulatory Approvals and Related Matters (Page 130)

The obligations of Zendesk and Momentive to consummate the merger are subject to, among other conditions, the expiration or earlier termination of any waiting period (and any extension thereof) under the HSR Act. Zendesk and Momentive filed the notifications required under the HSR Act with the Premerger Notification Office of the Federal Trade Commission and the Antitrust Division of the Department of Justice on November 12, 2021. Effective as of 11:59 p.m. Eastern Time on December 13, 2021, the waiting period under the HSR Act expired with respect to the merger.

 

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Under the merger agreement, each of Zendesk and Momentive has agreed to use their respective reasonable best efforts, subject to certain limitations, to take, or cause to be taken, all actions necessary to complete the merger and make effective the other contemplated transactions on a timely basis (and in any event prior to the end date), including to receive all required regulatory approvals as soon as practicable after the date of the merger agreement. For more information, see the section titled “The Merger Agreement—Regulatory Approvals and Related Matters.”

Litigation Relating to the Merger (Page 131)

As of January 3, 2022, two complaints have been filed by purported Momentive stockholders and two complaints have been filed by purported Zendesk stockholders, each of which seeks to enjoin the merger and other relief. The complaints assert claims against certain defendants under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder for allegedly false and misleading statements in this joint proxy statement/prospectus and against certain defendants under Section 20(a) of the Exchange Act for alleged “control person” liability with respect to such allegedly false and misleading statements. Zendesk and Momentive believe the allegations in the complaints are without merit. See the section titled “The Merger Agreement—Litigation Relating to the Merger.

No Appraisal Rights (Page 207)

Neither Zendesk nor Momentive stockholders are entitled to appraisal of their shares or dissenters’ rights with respect to the merger. For more information, see the section titled “No Appraisal Rights.”

Conditions to the Completion of the Merger (Page 160)

The obligations of each of Zendesk and Momentive to complete the merger are subject to the satisfaction or waiver (to the extent permitted by applicable legal requirements), at or prior to the completion of the merger, of each of the following conditions:

 

   

the registration statement of which this joint proxy statement/prospectus is a part being declared effective in accordance with the provisions of the Securities Act, no stop order suspending its effectiveness being issued by the SEC and in effect and there being no proceedings for that purpose having been initiated or threatened in writing by the SEC that have not been withdrawn;

 

   

shares of Zendesk common stock to be issued in the merger having been approved for listing (subject to official notice of issuance) on the NYSE;

 

   

the merger agreement being duly adopted by the required Momentive stockholder vote (as defined in “The Merger Agreement—Conditions to the Completion of the Merger”);

 

   

the Zendesk share issuance proposal being duly approved by the required Zendesk stockholder vote (as defined in the section titled “The Merger Agreement—Conditions to the Completion of the Merger”);

 

   

the expiration or earlier termination of any applicable waiting period (and any extension thereof) under the HSR Act; and

 

   

the absence of any temporary restraining order, preliminary or permanent injunction or other binding order preventing the completion of the merger.

In addition, each party’s obligation to complete the merger is subject to, among other things, the accuracy of certain representations and warranties of the other party and the compliance by such other party with certain of its covenants, in each case, subject to the materiality standards set forth in the merger agreement, and the absence of the occurrence of any material adverse effect.

Neither Zendesk nor Momentive can be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.

 

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No Solicitation or Discussions By Momentive (Page 144)

Under the merger agreement, subject to the exceptions summarized below, Momentive has agreed that it will not, and will cause each of its subsidiaries and its and their respective directors (other than directors of any subsidiary of Momentive that are not employees of Momentive or any of its subsidiaries), officers and financial advisors not to, and will not permit any of the other representatives of Momentive or any of its subsidiaries to:

 

   

solicit, initiate, knowingly encourage, assist, induce or knowingly facilitate the making, submission or announcement of any Momentive acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Momentive”) or Momentive acquisition inquiry (as defined under “The Merger Agreement—No Solicitation or Discussions by Momentive”);

 

   

furnish or otherwise provide access to any non-public information regarding Momentive or any of its subsidiaries to any person or entity in response to a Momentive acquisition proposal or Momentive acquisition inquiry;

 

   

engage in discussions (other than discussions solely between or among representatives of Momentive and its subsidiaries) or negotiations with any person or entity with respect to any Momentive acquisition proposal or Momentive acquisition inquiry (other than informing such person or entity of the provisions prohibiting solicitation of, and discussions and negotiations with respect to, alternative transactions pursuant to the merger agreement);

 

   

approve, endorse or recommend any Momentive acquisition proposal;

 

   

enter into any Momentive acquisition contract (as defined under “The Merger Agreement—No Solicitation or Discussions by Momentive”); or

 

   

resolve or publicly propose to take any of the foregoing actions.

In addition, under the merger agreement, Momentive has agreed that it will, and will cause each of its subsidiaries and its and their respective directors, officers and financial advisors to, and will use its reasonable best efforts to cause the other representatives of Momentive and its subsidiaries to, immediately cease and cause to be terminated any existing solicitations or assistance of, or discussions or negotiations with, any person or entity relating to any Momentive acquisition proposal or Momentive acquisition inquiry.

Under the merger agreement, however, prior to the approval of the Momentive merger proposal, under certain specified circumstances and subject to certain conditions, Momentive may furnish non-public information regarding Momentive and its subsidiaries to, and may enter into discussions or negotiations with, any person or entity (and its representatives) in response to a bona fide, written Momentive acquisition proposal that is made to Momentive after the date of the merger agreement by such person or entity (and not withdrawn).

Under the merger agreement, Momentive has also agreed to promptly (and in no event later than 24 hours after receipt thereof) advise Zendesk in writing if Momentive or any of its directors or officers receives a Momentive acquisition proposal or a Momentive acquisition inquiry at any time during the period from the date of the merger agreement and the earlier to occur of (i) the effective time and (ii) the valid termination of the merger agreement pursuant to its terms.

No Solicitation or Discussions By Zendesk (Page 148)

Under the merger agreement, subject to the exceptions summarized below, Zendesk has agreed that it will not, and will cause each of its subsidiaries and its and their respective directors (other than directors of any

 

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subsidiary of Zendesk that are not employees of Zendesk or any of its subsidiaries), officers and financial advisors not to, and will not permit any of the other representatives of Zendesk or any of its subsidiaries to:

 

   

solicit, initiate, knowingly encourage, assist, induce or knowingly facilitate the making, submission or announcement of any disruptive Zendesk acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”);

 

   

furnish or otherwise provide access to any non-public information regarding Zendesk or any of its subsidiaries to any person in connection with or in response to a disruptive Zendesk acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”);

 

   

engage in discussions (other than discussions solely between or among representatives of Zendesk and its subsidiaries) or negotiations with any person or entity with respect to any disruptive Zendesk acquisition proposal (other than informing such person or entity of the provisions of the merger agreement prohibiting solicitation of, and discussions and negotiations with respect to, disruptive Zendesk acquisition proposals);

 

   

approve, endorse or recommend any disruptive Zendesk acquisition proposal;

 

   

enter into any disruptive Zendesk acquisition contract (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”); or

 

   

resolve or publicly propose to take any of the foregoing actions.

Under the merger agreement, however, prior to the approval of the Zendesk share issuance proposal, under certain specified circumstances and subject to certain conditions, Zendesk may furnish non-public information regarding Zendesk and its subsidiaries to, and may enter into discussions or negotiations with, any person or entity (and its representatives) in response to a bona fide, written disruptive Zendesk acquisition proposal that is made to Zendesk after the date of the merger agreement by such person or entity (and not withdrawn).

Under the merger agreement, Zendesk has also agreed to promptly (and in no event later than 24 hours after receipt thereof) advise Momentive in writing if Zendesk or any of its directors or officers receives a disruptive Zendesk acquisition proposal or any other proposal to engage in any other Zendesk acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”) at any time during the period from the date of the merger agreement and the earlier to occur of (i) the effective time and (ii) the valid termination of the merger agreement pursuant to its terms.

Momentive Recommendation Change (Page 152)

The merger agreement provides that, subject to certain exceptions, the Momentive board of directors (including any committee thereof) may not:

 

   

withdraw or modify in a manner adverse to Zendesk, or permit the withdrawal or the modification in a manner adverse to Zendesk of, the Momentive board of directors’ recommendation that Momentive’s stockholders vote to adopt the merger agreement;

 

   

recommend the approval, acceptance or adoption of, or approve, endorse, accept or adopt, any Momentive acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Momentive”);

 

   

resolve, agree or publicly propose to take any of the actions contemplated in any of the two preceding bullets, which actions, together with the actions described in the two preceding bullets, are referred to as a “Momentive recommendation change”; or

 

   

cause or permit Momentive or any of its subsidiaries to execute or enter into any Momentive acquisition contract (as defined under “The Merger Agreement—No Solicitation or Discussions by Momentive”).

 

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Notwithstanding the restrictions described above, the merger agreement provides that, prior to the adoption of the merger agreement by the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date, the Momentive board of directors may, subject to compliance with certain obligations set forth in the merger agreement (including providing Zendesk with prior written notice and during such notice period, engaging (to the extent requested by Zendesk) in good faith negotiations with Zendesk to amend the terms of the merger agreement) make a Momentive recommendation change if it receives a bona fide, written Momentive acquisition proposal that the Momentive board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and the advice of Momentive’s outside legal counsel, that such Momentive acquisition proposal constitutes a Momentive superior offer (as defined under “The Merger Agreement—No Solicitation or Discussions by Momentive”) and that the failure to make such a Momentive recommendation change would be inconsistent with the fiduciary obligations of the Momentive board of directors under applicable legal requirements in light of such Momentive superior offer.

In addition, the Momentive board of directors is permitted, under certain circumstances, prior to the adoption of the merger agreement by the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date, subject to compliance with certain obligations set forth in the merger agreement (including providing Zendesk with prior written notice and during such notice period, engaging (to the extent requested by Zendesk) in good faith negotiations with Zendesk to amend the terms of the merger agreement) to make a Momentive recommendation change in response to a material change in circumstances (unrelated to a Momentive acquisition proposal) and if the Momentive board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and the advice of Momentive’s outside legal counsel, that the failure to withdraw or modify the Momentive board recommendation would be inconsistent with the fiduciary obligations of the Momentive board of directors under applicable legal requirements in light of such a material change in circumstances.

Zendesk Recommendation Change (Page 155)

The merger agreement provides that, subject to certain exceptions, the Zendesk board of directors (including any committee thereof) may not:

 

   

withdraw or modify in a manner adverse to Momentive, the Zendesk board of directors’ recommendation that Zendesk’s stockholders vote to approve the Zendesk share issuance proposal;

 

   

recommend the approval, acceptance or adoption of, or approve, endorse, accept or adopt, any disruptive Zendesk acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”);

 

   

resolve, agree or publicly propose to take any of the actions contemplated in any of the two preceding bullets, which actions, together with the actions described in the two preceding bullets, are referred to as a “Zendesk recommendation change”; or

 

   

cause or permit Zendesk or any of its subsidiaries to execute or enter into any disruptive Zendesk acquisition contract (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”).

Notwithstanding the restrictions described above, the merger agreement provides that, prior to the approval of the Zendesk share issuance proposal by the affirmative vote of a majority of the votes cast on the Zendesk share issuance proposal, the Zendesk board of directors may, subject to compliance with certain obligations set forth in the merger agreement (including providing Momentive with prior written notice and during such notice period, engaging (to the extent requested by Momentive) in good faith negotiations with Momentive to amend the terms of the merger agreement) make a Zendesk recommendation change if it receives a bona fide, written disruptive

 

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Zendesk acquisition proposal that the Zendesk board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and the advice of Momentive’s outside legal counsel, that such disruptive Zendesk acquisition proposal constitutes a disruptive Zendesk superior offer (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”) and that the failure to make such a Momentive recommendation change would be inconsistent with the fiduciary obligations of the Zendesk board of directors under applicable legal requirements in light of such disruptive Zendesk superior offer.

In addition, the Zendesk board of directors is permitted, under certain circumstances, prior to the approval of the Zendesk share issuance proposal by the affirmative vote of a majority of the votes cast on the Zendesk share issuance proposal, subject to compliance with certain obligations set forth in the merger agreement (including providing Momentive with prior written notice and during such notice period, engaging (to the extent requested by Momentive) in good faith negotiations with Momentive to amend the terms of the merger agreement) to make a Zendesk recommendation change in response to a material change in circumstances (unrelated to a disruptive Zendesk acquisition proposal) and if the Zendesk board of directors determines in good faith, after having taken into account the advice of an independent financial advisor of nationally recognized reputation and the advice of Zendesk’s outside legal counsel, that the failure to withdraw or modify the Zendesk board recommendation would be inconsistent with the fiduciary obligations of the Zendesk board of directors under applicable legal requirements in light of such a material change in circumstances.

Termination of the Merger Agreement (Page 163)

The merger agreement may be terminated prior to the effective time (whether before or after the adoption of the merger agreement by the required Momentive stockholder vote and whether before or after the approval of the Zendesk share issuance proposal by the required Zendesk stockholder vote) in accordance with its terms as follows:

 

   

by the mutual written consent of Zendesk and Momentive;

 

   

by either Zendesk or Momentive if the merger has not been completed by the end date (however, a party may not terminate the merger agreement on such basis if the failure to complete the merger by the end date is primarily attributable to a failure on the part of such party to perform any covenant or obligation in the merger agreement required to be performed by such party at or prior to effective time);

 

   

by either Zendesk or Momentive if a specified governmental body has issued a final and nonappealable order having the effect of permanently restraining, enjoining or otherwise prohibiting the merger;

 

   

by either Zendesk or Momentive if the Momentive merger proposal or the Zendesk share issuance proposal is not approved at the Momentive special meeting or the Zendesk special meeting, respectively, including any adjournment or postponement thereof (however, a party may not terminate the merger agreement on such basis if the failure to have the merger agreement adopted by the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date or to have the Zendesk share issuance proposal approved by the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal, as applicable, is primarily attributable to a failure on the part of such party to perform any covenant or obligation in the merger agreement required to be performed by such party at or prior to the effective time);

 

   

by Zendesk (at any time prior to the adoption of the merger agreement by the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date) if a Momentive triggering event (as defined under “The Merger Agreement—Termination of the Merger Agreement”) has occurred;

 

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by Momentive (at any time prior to the approval of the Zendesk share issuance proposal by the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal) if a Zendesk triggering event (as defined under “The Merger Agreement—Termination of the Merger Agreement”) has occurred; or

 

   

by either Zendesk or Momentive if, subject to certain exceptions, (a) any of the other party’s representations or warranties contained in the merger agreement were inaccurate as of the date of the merger agreement or became inaccurate as of a date subsequent to the date of the merger agreement (as if made on such subsequent date) such that the closing condition relating to the accuracy of such other party’s representations and warranties would not be satisfied; or (b) any of the other party’s covenants or obligations contained in the merger agreement was breached such that the closing condition relating to the performance by such other party of its covenants would not be satisfied.

Termination Fees (Page 166)

The merger agreement provides that in certain circumstances in connection with the termination of the merger agreement, Zendesk or Momentive will be required to pay the other a termination fee of $150 million, which is referred to as the “termination fee.”

Under the merger agreement, Momentive will be required to pay to Zendesk the termination fee if:

 

   

(i) the merger agreement is terminated by Zendesk or Momentive because the merger has not been completed on or prior to the end date, (ii) the failure to complete the merger was primarily due to a material failure on the part of Momentive to perform its covenants or obligations under the merger agreement, (iii) at or prior to the time of the termination of the merger agreement, a Momentive acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Momentive”) has been made known to Momentive or been publicly disclosed, announced, commenced, submitted or made, and (iv) within 12 months after the date of such termination of the merger agreement, Momentive has completed a transaction with a third party or has entered into a definitive agreement with a third party providing for a transaction (and such transaction is ultimately completed), in each case, for an acquisition of Momentive;

 

   

(i) the merger agreement is terminated by Zendesk or Momentive because Momentive has failed to obtain the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date approving the Momentive merger proposal, (ii) at or prior to such termination, a Momentive acquisition proposal has been made known publicly and has not been publicly withdrawn at least 10 business days prior to the Momentive special meeting, and (iii) within 12 months after the date of such termination of the merger agreement, Momentive has consummated a transaction with a third party or has entered into a definitive agreement with a third party providing for a transaction (and such transaction is ultimately consummated), in each case, for an acquisition of Momentive; and

 

   

the merger agreement is terminated by (i) Zendesk upon the occurrence of a Momentive triggering event (as defined under “The Merger Agreement—Termination of the Merger Agreement”) or (ii) by Zendesk or Momentive because Momentive has failed to obtain the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date to approve the Momentive merger proposal after the occurrence of a Momentive triggering event.

Under the merger agreement, Zendesk will be required to pay to Momentive the termination fee if:

 

   

(i) the merger agreement is terminated by Zendesk or Momentive because the merger has not been completed on or prior to the end date, (ii) the failure to complete the merger was primarily due to a material failure on the part of Zendesk to perform its covenants or obligations under the merger

 

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agreement, (iii) at or prior to the time of the termination of the merger agreement, a disruptive Zendesk acquisition proposal (as defined under “The Merger Agreement—No Solicitation or Discussions by Zendesk”) has been made known to Zendesk or been publicly disclosed, announced, commenced, submitted or made, and (iv) within 12 months after the date of such termination of the merger agreement, Zendesk has completed a transaction with a third party or has entered into a definitive agreement with a third party providing for a transaction (and such transaction is ultimately completed), in each case, for an acquisition of Zendesk;

 

   

(i) the merger agreement is terminated by Zendesk or Momentive because Zendesk has failed to obtain the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal approving the Zendesk share issuance proposal, (ii) at or prior to such termination, a disruptive Zendesk acquisition proposal has been made known publicly and has not been publicly withdrawn at least 10 business days prior to the Zendesk special meeting, and (iii) within 12 months after the date of such termination of the merger agreement, Zendesk has consummated a transaction with a third party or has entered into a definitive agreement with a third party providing for a transaction (and such transaction is ultimately consummated), in each case, for an acquisition of Zendesk; and

 

   

the merger agreement is terminated by (i) Momentive upon the occurrence of a Zendesk triggering event (as defined under “The Merger Agreement—Termination of the Merger Agreement”) or (ii) by Zendesk or Momentive because Zendesk has failed to obtain the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal to approve the Zendesk share issuance proposal after the occurrence of a Zendesk triggering event.

Voting Agreements (Page 170)

Concurrently with the execution of the merger agreement, on October 28, 2021, Zendesk and Momentive entered into voting agreements, each of which is referred to as a “voting agreement,” with Zander Lurie, Ryan Finley, certain of Mr. Lurie’s and Mr. Finley’s affiliates, and a stockholder of Momentive affiliated with Sheryl Sandberg, solely in their capacity as stockholders of Momentive, each of which is referred to as a “supporting stockholder.” Each supporting stockholder agreed that from the date of the voting agreement until the date that the voting agreement terminates, such supporting stockholder will vote or cause to be voted all shares of Momentive common stock that he, she or it beneficially owns, among other things:

 

   

in favor of: (i) the adoption of the merger agreement; and (ii) any action in furtherance of the adoption of the merger agreement;

 

   

against any action or agreement that would reasonably be expected to result in a material breach of any representation, warranty, covenant or obligation of Momentive in the merger agreement; and

 

   

against any proposal involving Momentive or any of its subsidiaries that would reasonably be expected to have a material adverse effect (as defined under “The Merger Agreement—Representations and Warranties”) on Momentive or materially impede, interfere with, delay, postpone or adversely affect the completion of the merger or any of the other transactions contemplated by the merger agreement.

The voting agreement with the supporting stockholder affiliated with Ms. Sandberg also provides that if the Momentive board of directors makes a Momentive recommendation change (as defined under “The Merger Agreement—Momentive Recommendation Change”), then such supporting stockholder will instead cause the shares of Momentive common stock beneficially owned by such supporting stockholder to be voted in the same proportion (for, against or abstain) as the votes that are collectively cast by all of the other holders of Momentive common stock who are present and voting with respect to each such matter.

As of October 25, 2021, the supporting stockholders subject to the voting agreements beneficially owned in the aggregate approximately 12% of the outstanding shares of Momentive common stock. For more information, see the section titled “Voting Agreements” and Annexes E-1 through E-7 to this joint proxy statement/prospectus.

 

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U.S. Federal Income Tax Consequences of the Merger (Page 194)

For U.S. federal income tax purposes, the merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming the merger so qualifies, a U.S. Holder (as defined under “U.S. Federal Income Tax Consequences of the Merger”) of Momentive common stock generally will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of Momentive common stock for Zendesk common stock in the merger, except with respect to cash received by Momentive stockholders in lieu of fractional shares of Zendesk common stock.

See the section titled “U.S. Federal Income Tax Consequences of the Merger” for a more complete description of certain U.S. federal income tax consequences of the merger. Please consult your tax advisors as to the specific tax consequences to you of the merger.

Comparison of Stockholders’ Rights (Page 198)

Upon completion of the merger, Zendesk stockholders receiving shares of Zendesk common stock will become Zendesk stockholders. The rights of Zendesk stockholders will be governed by the DGCL and the Zendesk charter and Zendesk bylaws in effect at the effective time. As Zendesk and Momentive are both Delaware corporations, the rights of Zendesk stockholders and Momentive stockholders are not materially different. However, there are certain differences in the rights of Zendesk stockholders under the Zendesk charter and Zendesk bylaws and of Momentive stockholders under the Momentive charter and Momentive bylaws. See the section titled “Comparison of Stockholders’ Rights.”

Listing of Zendesk Common Stock; Delisting and Deregistration of Momentive Common Stock (Page 28)

It is a condition to the merger that the shares of Zendesk common stock to be issued to Momentive stockholders in the merger be approved for listing on the NYSE, subject to official notice of issuance. If the merger is completed, Momentive common stock will be delisted from Nasdaq and deregistered under the Exchange Act, following which Momentive will no longer be required to file periodic reports with the SEC with respect to Momentive common stock.

Momentive has agreed to cooperate with Zendesk prior to the closing to cause the Momentive common stock to be delisted from Nasdaq and be deregistered under the Exchange Act as soon as practicable after the effective time.

Risk Factors (Page 34)

In evaluating the merger agreement, the merger and the share issuance, you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in the section titled “Risk Factors.”

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined balance sheet data as of September 30, 2021 gives effect to the merger as if it had occurred on September 30, 2021, and the following selected unaudited pro forma condensed combined statements of operations data for the fiscal year ended December 31, 2020 and for the nine months ended September 30, 2021 is presented as if the merger had occurred on January 1, 2020. The unaudited pro forma condensed combined financial statements from which the selected data are derived have been prepared for illustrative purposes only and are not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the merger occurred as of the dates indicated. In addition, the unaudited pro forma condensed combined financial statements from which the selected data are derived do not purport to project the future financial position or operating results of the combined company. Future results may vary significantly from the results reflected because of various factors, including those discussed in section titled “Risk Factors.” The selected unaudited pro forma condensed combined financial information should be read together with information in the section titled “Unaudited Pro Forma Condensed Combined Financial Statements.”

The unaudited pro forma condensed combined financial statements from which the following selected data is derived are based on and have been derived from the historical financial statements of Zendesk and Momentive, including Zendesk’s unaudited condensed consolidated financial statements for the nine months ended September 30, 2021 and audited consolidated statement of operations for the fiscal year ended December 31, 2020, and Momentive’s unaudited condensed consolidated financial statements for the nine months ended September 30, 2021 and audited condensed consolidated statement of operations for the fiscal year ended December 31, 2020.

Selected Unaudited Pro Forma Condensed Combined Statements of Operations Data

 

(in thousands, except per share amounts)    Nine Months Ended
September 30, 2021
     Year Ended
December 31, 2020
 

Revenue

   $  1,289,682      $  1,405,174  

Operating loss

   $ (254,882)      $ (399,250)  

Net loss

   $ (299,716)      $ (264,497)  

Net loss per share, basic and diluted

   $ (1.96)      $ (1.78)  

Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data

 

(in thousands)    As of
September 30, 2021
 

Total assets

   $  6,475,898  

Total liabilities

   $ 2,251,587  

Total stockholders’ equity

   $ 4,224,311  

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The following table summarizes selected per share data for (i) Zendesk and Momentive for the fiscal year ended December 31, 2020, on an audited historical basis, and unaudited historical financial information of Zendesk and Momentive for the nine months ended September 30, 2021, (ii) Zendesk for the fiscal year ended December 31, 2020 and the nine months ended September 30, 2021 on an unaudited pro forma combined basis giving effect to the merger using the acquisition method of accounting and (iii) Momentive for the fiscal year ended December 31, 2020 and the nine months ended September 30, 2021 on an unaudited pro forma equivalent basis based on the exchange ratio of 0.225 of a share of Zendesk common stock per share for Momentive common stock.

The following table reflects historical information about basic and diluted net income per share attributable to common stockholders for the fiscal year ended December 31, 2020 and the nine months ended September 30, 2021, and the book value per common share as of September 30, 2021, on a historical basis, and for the combined company on an unaudited pro forma condensed combined basis after giving effect to the merger. The pro forma data of the combined company assumes the merger was completed on January 1, 2020 and was derived by combining the historical consolidated financial information of Zendesk and Momentive.

The historical per share data should be read together with the historical consolidated financial statements and related notes of Zendesk and Momentive incorporated by reference in this joint proxy statement/prospectus. See the section titled “Where You Can Find More Information.” The unaudited pro forma condensed combined per share data are derived from, and should be read together with the information in the section titled “Unaudited Pro Forma Condensed Combined Financial Statements.” The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position of the combined company following the merger.

 

     Zendesk     Momentive  
     Historical     Pro Forma
Combined
    Historical     Pro Forma
Equivalent(1)
 

Net loss per share

        

Basic and Diluted

        

Nine Months Ended September 30, 2021

   $ (1.36   $ (1.96   $ (0.56   $ (0.44

Year Ended December 31, 2020

   $ (1.89   $ (1.78   $ (0.65   $ (0.40

Book Value per Share

        

As of September 30, 2021

   $ 3.89     $ 27.43     $ 2.43     $ 6.17  

 

(1)

Calculated by multiplying the “Pro Forma Combined” amounts by the exchange ratio of 0.225.

 

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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

Market Prices

Zendesk common stock is listed on the NYSE under the symbol “ZEN” and Momentive common stock is listed on Nasdaq under the symbol “MNTV.”

The following table sets forth the closing sale price per share of Zendesk common stock and Momentive common stock reported on the NYSE and Nasdaq, respectively, as of (1) October 27, 2021, the trading day before the public announcement of the execution of the merger agreement and (2) January 3, 2022, the latest practicable trading date before the date of this joint proxy statement/prospectus. The table also shows the estimated implied value of the per share merger consideration for each share of Momentive common stock as of the same two days. This implied per share value was calculated by multiplying the closing prices per share of Zendesk common stock on those dates by an exchange ratio of 0.225.

 

    

Zendesk
Common Stock

  

Momentive
Common Stock

  

Implied Per Share Value
of Merger Consideration

October 27, 2021

   $122.66    $24.56    $27.60

January 3, 2022

   $103.53    $21.24    $23.29

The market prices of Zendesk common stock and Momentive common stock have fluctuated since the date of the announcement of the merger and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the Momentive special meeting and the date the merger is completed and thereafter (in the case of Zendesk common stock). The value of the merger consideration to be received in exchange for each share of Momentive common stock will fluctuate with changes in the market value of Zendesk common stock until the last trading day before the merger is complete.

The value of the merger consideration to be received in exchange for each share of Momentive common stock when received by Momentive stockholders after the merger is completed could be greater than, less than or the same as shown in the table above. Accordingly, Zendesk stockholders and Momentive stockholders are advised to obtain current market quotations for Zendesk common stock and Momentive common stock in determining whether to vote in favor of the Zendesk share issuance proposal, in the case of Zendesk stockholders, or the Momentive merger proposal, in the case of Momentive stockholders.

Dividends

Zendesk has never declared or paid any cash dividends on its common stock. Zendesk anticipates retaining future earnings for the development, operation, and expansion of its business, and does not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, Zendesk’s ability to pay cash dividends on Zendesk common stock may be prohibited or limited by the terms of future debt financing arrangements.

Momentive has never declared nor paid any cash dividends on Momentive common stock. Under the terms of the merger agreement, Momentive is not permitted to declare, accrue, set aside, establish a record date for or pay any dividend or other distribution during the pre-closing period without the prior written consent of Zendesk.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part, the documents that Zendesk and Momentive refer you to in the registration statement and oral statements made or to be made by Zendesk and Momentive include certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995, which are referred to as the “safe harbor provisions.” Statements contained or incorporated by reference in the registration statement of which this joint proxy statement/prospectus forms a part that are not historical facts are forward-looking statements, including statements regarding the anticipated benefits of the merger, the anticipated impact of the merger on the combined company’s business and future financial and operating results, the expected amount and timing of anticipated synergies from the merger, the anticipated timing of closing of the merger and other aspects of Zendesk’s or Momentive’s operations or operating results. Words such as “may,” “should,” “will,” “believe,” “expect,” “anticipate,” “target,” “project,” and similar phrases that denote future expectations or intent regarding the combined company’s financial results, operations, and other matters are intended to identify forward-looking statements that are intended to be covered by the safe harbor provisions. Investors are cautioned not to rely upon forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that may cause future events to differ materially from the forward-looking statements in this report, including:

 

   

the occurrence of any change, event, series of events or circumstances that could give rise to the termination of the merger agreement, including a termination of the merger agreement under circumstances that could require Zendesk to pay a termination fee to Momentive or require Momentive to pay a termination fee to Zendesk;

 

   

the inability to complete the merger due to the failure of Zendesk stockholders to approve the share issuance or of Momentive stockholders to adopt the merger agreement, or the failure to satisfy any of the other conditions to the completion of the merger, including regulatory approvals, in a timely manner or otherwise;

 

   

risks relating to fluctuations of the market value of Zendesk and Momentive’s common stock before the completion of the merger, including as a result of uncertainty as to the long-term value of the common stock of the combined company or as a result of broader stock market movements;

 

   

delays in closing, or the failure to close, the merger for any reason, could negatively impact Zendesk, Momentive or the combined company;

 

   

the risk that disruptions from the pendency of the merger will disrupt Zendesk’s or Momentive’s business, including current plans and operations, which may adversely impact Zendesk’s or Momentive’s respective businesses;

 

   

difficulties or delays in integrating the businesses of Zendesk and Momentive following completion of the merger or fully realizing the anticipated synergies or other benefits expected from the merger;

 

   

certain restrictions during the pendency of the merger that may impact the ability of Zendesk or Momentive to pursue certain business opportunities or strategic transactions;

 

   

the risk of legal proceedings that have been or may be instituted against Zendesk, Momentive, their directors and/or others relating to the merger;

 

   

the diversion of the attention of the respective management teams of Zendesk and Momentive from their respective ongoing business operations;

 

   

the risk that the merger or any announcement relating to the merger could have an adverse effect on the ability of Zendesk or Momentive to retain and hire key personnel;

 

   

the risk that uncertainty about the merger may adversely affect relationships with Zendesk and Momentive’s customers, partners, suppliers, and employees, whether or not the merger is completed;

 

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the potentially significant amount of any costs, fees, expenses, impairments or charges related to the merger;

 

   

the potential dilution of Zendesk stockholders’ and Momentive stockholders’ ownership percentage of the combined company as compared to their ownership percentage of Zendesk or Momentive, as applicable, prior to the merger;

 

   

the business, economic, political and other conditions in the countries in which Zendesk or Momentive operate;

 

   

the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, Zendesk’s or Momentive’s respective business, operations, revenue, cash flow, operating expenses, hiring, demand for their respective solutions, sales cycles, customer retention, and their respective customers’ businesses and industries;

 

   

the effect of uncertainties related to the actions of activist stockholders, which could make it more difficult to obtain the approval of the Zendesk share issuance proposal and of the Momentive merger proposal and result in Zendesk and Momentive incurring significant fees and other expenses, including for third-party advisors;

 

   

Momentive directors and executive officers having interests in the merger that are different from, or in addition to, the interests of Momentive stockholders generally; and

 

   

the possibility that the combined company’s results of operations, cash flows and financial position after the merger may differ materially from the unaudited pro forma condensed combined financial information contained in this proxy statement/prospectus.

The forward-looking statements contained in this joint proxy statement/prospectus are also subject to additional risks, uncertainties, and factors, including those described in Zendesk’s and Momentive’s most recent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other documents filed by either of them from time to time with the SEC. See the section titled “Where You Can Find More Information.”

The forward-looking statements included in this report are made only as of the date hereof. Zendesk and Momentive do not undertake to update, alter or revise any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law.

 

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RISK FACTORS

In considering how to vote on the proposals to be considered and voted on at the Zendesk special meeting or the Momentive special meeting, you are urged to carefully consider all of the information contained or incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information.” You should also read and consider the risks associated with each of the businesses of Zendesk and Momentive because those risks will affect the combined company. The risks associated with the business of Zendesk can be found in Zendesk’s Exchange Act reports, including Zendesk’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Zendesk’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021, which are incorporated by reference into this joint proxy statement/prospectus. The risks associated with the business of Momentive can be found in Momentive’s Exchange Act reports, including Momentive’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Momentive’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021, which are incorporated by reference into this joint proxy statement/prospectus. In addition, you are urged to carefully consider the following material risks relating to the merger and the businesses of Zendesk, Momentive and the combined company.

Risks Relating to the Merger

Because the exchange ratio is fixed and will not be adjusted in the event of any change in the price of either Zendesk common stock or Momentive common stock, the value of the consideration that Momentive stockholders will receive in the merger is uncertain.

At the effective time, each share of Momentive common stock that is outstanding immediately prior to the effective time (other than shares of Momentive common stock held, directly or indirectly, by Momentive or Zendesk, any of their respective wholly owned subsidiaries, or held in Momentive’s treasury), will be converted into the right to receive 0.225 of a share of Zendesk common stock, a cash payment (without interest and less any applicable withholding taxes) for any fractional shares of Zendesk common stock resulting from the calculation and dividends or other distributions that such holder of Momentive common stock is entitled to receive pursuant to the merger agreement. The exchange ratio is fixed in the merger agreement and will not be adjusted for changes in the market price of either Zendesk common stock or Momentive common stock prior to the completion of the merger. The market prices of Zendesk common stock and Momentive common stock have fluctuated prior to and after the date of the announcement of the merger agreement and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the Zendesk special meeting and the Momentive special meeting, and through the date the merger is completed.

Because the value of the merger consideration will depend on the market price of Zendesk common stock at the time the merger is completed, Momentive stockholders will not know or be able to determine at the time of the Momentive special meeting the market value of the merger consideration they would receive upon completion of the merger. Similarly, Zendesk stockholders will not know or be able to determine at the time of the Zendesk special meeting the market value of the shares of Zendesk common stock to be issued pursuant to the merger agreement compared to the market value of the shares of Momentive common stock that are being exchanged in the merger.

Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in Zendesk’s or Momentive’s respective businesses, operations and prospects, the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, Zendesk’s or Momentive’s respective business, operations, revenue, cash flow, operating expenses, hiring, demand for their respective solutions, sales cycles, customer retention and their respective customers’ business and industries, market assessments of the likelihood that the merger will be completed, interest rates and other factors generally affecting the respective prices of Zendesk common stock and Momentive common stock, and the timing of the merger and receipt of required regulatory approvals.

 

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Many of these factors are beyond the control of Zendesk and Momentive, and neither Zendesk nor Momentive is permitted to terminate the merger agreement solely due to a decline in the market price of the common stock of the other party. You are urged to obtain current market quotations for Zendesk common stock and Momentive common stock in determining whether to vote in favor of the Zendesk share issuance proposal, in the case of Zendesk stockholders, or the Momentive merger proposal, in the case of Momentive stockholders.

The market price of Zendesk common stock will continue to fluctuate after the merger.

Upon completion of the merger, Momentive stockholders will become holders of Zendesk common stock. The market price of the common stock of the combined company will continue to fluctuate, potentially significantly, following completion of the merger, including for the reasons described above. As a result, former Momentive stockholders could lose some or all of the value of their investment in Zendesk common stock. In addition, any significant price or volume fluctuations in the stock market generally could have a material adverse effect on the market for, or liquidity of, the Zendesk common stock received in the merger, regardless of the combined company’s actual operating performance.

The merger may not be completed and the merger agreement may be terminated in accordance with its terms.

The merger is subject to a number of conditions that must be satisfied, including the approval by Zendesk stockholders of the Zendesk share issuance proposal and approval by Momentive stockholders of the Momentive merger proposal, or waived (to the extent permitted), in each case prior to the completion of the merger. These conditions are described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger.” These conditions to the completion of the merger, some of which are beyond the control of Zendesk and Momentive, may not be satisfied or waived in a timely manner or at all, and, accordingly, the merger may be delayed or not completed.

Additionally, either Zendesk or Momentive may terminate the merger agreement under certain circumstances, including, among others, if the merger is not completed by the end date. In addition, if the merger agreement is terminated under specified circumstances, including because the Momentive board of directors changes its recommendation, Momentive may be required to pay Zendesk a termination fee of $150 million. If the merger agreement is terminated under other specified circumstances, including because the Zendesk board of directors changes its recommendation, Zendesk may be required to pay Momentive a termination fee of $150 million. See the sections titled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Transaction Expenses and Termination Fees—Termination Fees” for a more complete discussion of the circumstances under which the merger agreement could be terminated and when a termination fee may be payable by Zendesk or Momentive.

Failure to complete the merger could negatively impact the future business and financial results of Zendesk and Momentive and the trading prices of the Zendesk common stock or Momentive common stock.

If the merger is not completed for any reason, including because Zendesk stockholders fail to approve the Zendesk share issuance proposal or because Momentive stockholders fail to approve the Momentive merger proposal, the ongoing businesses of Zendesk and Momentive may be adversely affected and, without realizing any of the expected benefits of having completed the merger, Zendesk and Momentive would be subject to a number of risks, including the following:

 

   

each company may experience negative reactions from the financial markets, including negative impacts on its stock price;

 

   

each company may experience negative reactions from its customers, partners, suppliers and employees;

 

   

each company will be required to pay its respective costs relating to the merger, such as financial advisory, legal, accounting costs and associated fees and expenses, whether or not the merger is completed;

 

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there may be disruptions to each company’s respective business resulting from the announcement and pendency of the merger, and any adverse changes in their relationships with their respective customers, partners, suppliers, other business partners and employees may continue or intensify; and

 

   

each company will have committed substantial time and resources to matters relating to the merger (including integration planning) which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to either company as an independent company.

The market price for shares of Zendesk common stock may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market price of shares of Momentive common stock.

Upon completion of the merger, Momentive stockholders will receive shares of Zendesk common stock and will accordingly become Zendesk stockholders. Zendesk’s business differs from that of Momentive, and Zendesk’s results of operations and stock price may be adversely affected by factors different from those that historically have affected or currently affect Momentive’s results of operations and stock price. Following the completion of the mergers, Momentive will be part of a larger company, so decisions affecting Momentive may be made in respect of the larger combined business as a whole rather than the Momentive business individually. For a discussion of the businesses of each of Zendesk and Momentive and some important factors to consider in connection with those businesses, see the section titled “The Parties to the Merger” and the other information contained or incorporated in this joint proxy statement/prospectus. See the section titled “Where You Can Find More Information.”

The share issuance may cause the market price of Zendesk common stock to decline.

Based on 150,398,525 shares of Momentive common stock issued and outstanding as of January 3, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, and the exchange ratio of 0.225, it is expected that Zendesk will issue approximately 33.8 million shares of Zendesk common stock in the merger. Former Momentive stockholders may decide not to hold the shares of Zendesk common stock that they will receive in the merger, and Zendesk stockholders may decide to reduce their investment in Zendesk as a result of the changes to Zendesk’s investment profile as a result of the merger. Both the issuance of this amount of new shares in the merger and any subsequent sales of these shares may cause the market price of Zendesk common stock to decline.

Momentive stockholders who receive shares of Zendesk common stock in the merger will have rights as Zendesk stockholders that differ from their current rights as Momentive stockholders.

Upon completion of the merger, Momentive stockholders will no longer be stockholders of Momentive and will instead become stockholders of Zendesk. As Zendesk and Momentive are both Delaware corporations, the rights of Zendesk stockholders and Momentive stockholders are not materially different. However, there are certain differences in the rights of Zendesk stockholders under the Zendesk charter and Zendesk bylaws, and of Momentive stockholders under the Momentive charter and the Momentive bylaws. See the section titled “Comparison of Stockholders’ Rights” for a discussion of these rights.

After the merger, Momentive stockholders will have a significantly lower ownership and voting interest in Zendesk than they currently have in Momentive and will exercise less influence over management and policies of the combined company.

Based on the number of shares of Zendesk common stock and Momentive common stock outstanding on January 3, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, upon completion of the merger, former Momentive stockholders are expected to own approximately 22% of the outstanding shares of Zendesk common stock and the current Zendesk stockholders are expected to own

 

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approximately 78% of the outstanding shares of Zendesk common stock. Consequently, former Momentive stockholders will have less influence over the management and policies of the combined company than they currently have over the management and policies of Momentive.

Until the completion of the merger or the termination of the merger agreement pursuant to its terms, Zendesk and Momentive are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Zendesk, Momentive and/or their respective stockholders.

From and after the date of the merger agreement and prior to the completion of the merger or the termination of the merger agreement pursuant to its terms, the merger agreement restricts Zendesk and Momentive from taking specified actions without the consent of the other party and requires that the business of Momentive and its subsidiaries be conducted in the ordinary course. These restrictions may prevent Zendesk or Momentive, as applicable, from taking actions during the pendency of the merger that would have been beneficial. Adverse effects arising from these restrictions during the pendency of the merger could be exacerbated by any delays in the completion of the merger or termination of the merger agreement. See the section titled “The Merger Agreement—Interim Operations of Zendesk and Momentive.”

Obtaining required approvals and satisfying closing conditions may prevent or delay completion of the merger.

The merger is subject to a number of conditions to closing as specified in the merger agreement. These closing conditions include, among others, the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part registering the issuance of shares of Zendesk common stock to Momentive stockholders in connection with the merger and the absence of any stop order or proceedings by the SEC with respect thereto, the expiration or earlier termination of any applicable waiting period (and any extension thereof) under the HSR Act, approval for listing on the NYSE of the shares of Zendesk common stock to be issued in connection with the merger, and the absence of governmental restraints or prohibitions preventing the consummation of the merger. The obligation of each of Zendesk and Momentive to complete the merger is also conditioned on, among other things, the accuracy of the representations and warranties made by the other party on the date of the merger agreement and on the closing date (subject to certain materiality and material adverse effect qualifiers), and the performance by the other party in all material respects of its obligations under the merger agreement. No assurance can be given that the required stockholder approvals and governmental and regulatory consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the required conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the merger could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that Zendesk and Momentive expect to achieve if the merger is successfully completed within its expected time frame. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, see the section titled “The Merger Agreement—Conditions to the Completion of the Merger.”

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the merger.

The success of the merger will depend in part on the combined company’s ability to retain the talents and dedication of the professionals currently employed by Zendesk and Momentive. It is possible that these employees may decide not to remain with Zendesk or Momentive, as applicable, while the merger is pending, or with the combined company. If key employees of either company terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating Zendesk and Momentive to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, Zendesk and Momentive may not be able to locate suitable replacements for any key employees that leave either company or offer employment to potential replacements on

 

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reasonable terms. Moreover, there could be disruptions to or distractions for the workforce and management, including disruptions associated with integrating employees into the combined company. No assurance can be given that the combined company will be able to attract or retain key employees of Zendesk and Momentive to the same extent that those companies have been able to attract or retain their own employees in the past.

The merger, and uncertainty regarding the merger, may cause customers, partners, or suppliers to delay or defer decisions concerning Zendesk or Momentive and adversely affect each company’s ability to effectively manage its respective business, which could adversely affect each company’s business, operating results and financial position and, following the completion of the merger, the combined company’s.

The merger will happen only if the stated conditions are met, including the approval of the Zendesk share issuance proposal, the approval of the Momentive merger proposal and the receipt of required regulatory approvals, among other conditions. Many of the conditions are beyond the control of Zendesk and Momentive, and both parties also have certain rights to terminate the merger agreement. Accordingly, there may be uncertainty regarding the completion of the merger. This uncertainty may cause existing or prospective customers, partners, or suppliers to:

 

   

delay, defer, or cease purchasing products or services from, providing products or services to, Zendesk, Momentive or the combined company;

 

   

delay or defer other decisions concerning Zendesk, Momentive or the combined company, including entering into contracts with Zendesk or Momentive or making other decisions concerning Zendesk or Momentive or seek to change or cancel existing business relationships with Zendesk or Momentive; or

 

   

otherwise seek to change the terms on which they do business with Zendesk, Momentive or the combined company.

Any such disruptions such as delays or deferrals of those decisions or changes in existing agreements could adversely affect the respective business, operating results and financial position of Zendesk and Momentive, whether the merger is ultimately completed, and following the completion of the merger, the combined company, including an adverse effect on the combined company’s ability to realize the anticipated synergies and other benefits of the merger. The risk, and adverse effect, of any such disruptions could be exacerbated by a delay in completion of the merger or termination of the merger agreement.

Whether or not the merger is completed, the announcement and pendency of the merger could cause disruptions in the businesses of Zendesk and Momentive, which could have an adverse effect on their respective businesses and financial results.

Whether or not the merger is completed, the announcement and pendency of the merger could cause disruptions in the businesses of Zendesk and Momentive, including by diverting the attention of Zendesk and Momentive’s respective management and employee teams, such as those involved in day-to-day operations and sales, toward the completion of the merger. In addition, Zendesk and Momentive have each diverted significant management resources in an effort to complete the merger and are each subject to restrictions contained in the merger agreement on the conduct of their respective businesses. If the merger is not completed, Zendesk and Momentive will have incurred significant costs, including the diversion of management resources, for which they will have received little or no benefit.

Momentive directors and executive officers have interests and arrangements that may be different from, or in addition to, those of Momentive stockholders generally.

When considering the recommendations of the Momentive board of directors on how to vote on the proposals described in this joint proxy statement/prospectus, Momentive stockholders should be aware that Momentive directors and executive officers may have interests in the merger that are different from, or in addition to, those

 

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of Momentive stockholders generally. These interests include the treatment in the merger of outstanding equity, equity-based and incentive awards, severance arrangements, other compensation and benefit arrangements, and the right to continued indemnification of former Momentive directors and officers by the combined company. The Momentive board of directors was aware of and considered these interests when it determined that the merger was fair to, and in the best interests of, Momentive and its stockholders, approved and declared advisable the merger agreement and the consummation of the transactions contemplated thereby, including the merger, and recommended that Momentive stockholders adopt the merger agreement. The interests of Momentive directors and executive officers are described in more detail in the section titled “The Merger Agreement—Interests of Momentive Directors and Executive Officers in the Merger.”

The merger agreement contains provisions that could discourage a potential competing acquirer that might be willing to pay more to acquire or merge with either Zendesk or Momentive.

The merger agreement contains “no shop” provisions that restrict the ability of Zendesk and Momentive to, among other things (each as described in the sections titled “The Merger Agreement—No Solicitation or Discussions by Momentive” and “The Merger Agreement—No Solicitation or Discussions by Zendesk”):

 

   

in the case of Momentive: (i) solicit, initiate, knowingly encourage, assist, induce or knowingly facilitate the making, submission or announcement of, any acquisition proposal or any acquisition inquiry; (ii) furnish or otherwise provide access to any non-public information regarding Momentive or its respective subsidiaries to any person in connection with or in response to an acquisition proposal or an acquisition inquiry; (iii) engage in discussions or negotiations with any person with respect to acquisition proposal or any acquisition inquiry; (iv) approve, endorse or recommend any acquisition proposal; (v) enter into any contract that relates to, contemplates, is intended or would reasonably be expected to result in, an acquisition; or (vi) resolve or publicly propose to do any of the foregoing actions; and

 

   

in the case of Zendesk: (i) solicit, initiate, knowingly encourage, assist, induce or knowingly facilitate the making, submission or announcement of any acquisition proposal that is conditioned on the termination of the merger agreement; (ii) furnish or otherwise provide access to any non-public information, regarding Zendesk in connection with or in response to an acquisition proposal that is conditioned on the termination of the merger agreement; (iii) engage in discussions or negotiations with any person with respect to any acquisition proposal that is conditioned on the termination of the merger agreement; (iv) approve, endorse or recommend any acquisition proposal that is conditioned on the termination of the merger agreement; (v) enter into any contract that an acquisition that is conditioned on the termination of the merger agreement; or (vi) resolve or publicly propose to do any of the foregoing actions.

Furthermore, there are only limited exceptions to the requirement under the merger agreement that neither the Zendesk board of directors nor the Momentive board of directors withdraw or modify the Zendesk board recommendation or the Momentive board recommendation, as applicable (each as defined in the section titled “The Merger Agreement—Stockholder Meetings; Board Recommendations”). Although the Zendesk board of directors or Momentive board of directors is permitted to effect a change of recommendation, after complying with certain procedures set forth in the merger agreement, in response to certain superior offers or to certain intervening events (if the applicable board of directors determines in good faith, after having taken into account the advice of outside legal counsel, that a failure to do so would be inconsistent with its fiduciary duties under applicable law), such change of recommendation would entitle the other party to terminate the merger agreement and receive a termination fee from the party making a change of recommendation. See the sections titled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Transaction Expenses and Termination Fees—Termination Fees.”

These provisions could discourage a potential competing acquirer from considering or proposing an acquisition or merger, even if it were prepared to pay consideration with a higher value than that implied by the exchange

 

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ratio in the merger, or might result in a potential competing acquirer proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee.

The merger will involve substantial costs.

Zendesk and Momentive have incurred and expect to incur non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the merger. Such costs include, among others, filing and registration fees with the SEC, printing and mailing costs associated with this joint proxy/registration statement, and legal, accounting, investment banking, consulting, public relations and proxy solicitation fees. Some of these costs are payable by Zendesk or Momentive regardless of whether the merger is completed.

The combined company will also incur restructuring and integration costs in connection with the merger. There are processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the merger and the integration of Momentive’s business. Although Zendesk expects that the elimination of duplicative costs, strategic benefits and additional income, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, merger-related and restructuring costs over time, any net benefit may not be achieved in the near term or at all. Many of these costs will be borne by Zendesk even if the merger is not completed. While Zendesk has assumed that certain expenses would be incurred in connection with the merger and the other transactions contemplated by the merger agreement, there are many factors beyond Zendesk’s control that could affect the total amount or the timing of the integration and implementation expenses.

Zendesk and Momentive stockholders will not be entitled to appraisal rights in the merger.

Appraisal rights are statutory rights that, if applicable under law, enable stockholders of a corporation to dissent from an extraordinary transaction, such as a merger, and to demand that such corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to such stockholders in connection with the extraordinary transaction. Under the DGCL, stockholders generally do not have appraisal rights if the shares of stock they hold are either listed on a national securities exchange or held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available if stockholders are required by the terms of the merger agreement to accept for their shares anything other than (a) shares of stock of the surviving corporation, (b) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (c) cash in lieu of fractional shares or (d) any combination of the foregoing.

Because the merger is of Merger Sub with and into Momentive and holders of Zendesk common stock will continue to hold their shares following completion of the merger, holders of Zendesk common stock are not entitled to appraisal rights in connection with the merger.

Because Zendesk common stock is listed on the NYSE and because Momentive stockholders are not required by the terms of the merger agreement to accept for their shares of Momentive common stock anything other than shares of Zendesk common stock and cash in lieu of fractional shares, holders of Momentive common stock are not entitled to appraisal rights in connection with the merger. See the section titled “No Appraisal Rights.”

Lawsuits filed against Zendesk, Momentive, and members of their respective boards of directors challenging the merger, and an adverse ruling in any such lawsuit may prevent the merger from becoming effective or from becoming effective within the expected time frame.

Transactions such as the merger are frequently subject to litigation or other legal proceedings, including actions alleging that the Zendesk board of directors or Momentive board of directors breached their respective fiduciary duties to their stockholders by entering into the merger agreement, by failing to obtain a greater value in the

 

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transaction for their stockholders or otherwise. Neither Zendesk nor Momentive can provide assurance that such litigation or other legal proceedings will not be brought. Zendesk, Momentive and members of the Zendesk and Momentive boards of directors currently are and may in the future be parties, among others, to various claims and litigation related to the merger. See the section titled “The Merger Agreement – Litigation Relating to the Merger.” Zendesk and Momentive will defend against the lawsuits filed, but might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on the business, results of operation or financial position of Zendesk, Momentive or the combined company, including through the possible diversion of either company’s resources or distraction of key personnel.

Furthermore, one of the conditions to the completion of the merger is that no injunction by any governmental body of competent jurisdiction will be in effect that prevents the consummation of the merger. As such, if any of the plaintiffs are successful in obtaining an injunction preventing the consummation of the merger, that injunction may prevent the merger from becoming effective or from becoming effective within the expected time frame.

If the merger does not qualify as a reorganization there may be adverse tax consequences.

The parties intend that the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code; however, the merger is not conditioned on the receipt of an opinion from counsel that the merger will so qualify. If the merger were to fail to qualify as a reorganization, U.S. holders of Momentive common stock generally would recognize gain or loss, as applicable, equal to the difference between (i) the sum of the fair market value of the Zendesk common stock and cash in lieu of fractional shares received by such holder in merger; and (ii) such holder’s adjusted tax basis in its Momentive common stock. See the section titled “U.S. Federal Income Tax Considerations.

Risks Relating to the Combined Company

Combining the businesses of Zendesk and Momentive may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the merger, which may adversely affect the combined company’s business results and negatively affect the value of the combined company’s common stock.

The success of the merger will depend on, among other things, Zendesk’s ability to realize the anticipated benefits and operational scale efficiencies from combining the businesses of Zendesk and Momentive. This success will depend largely on Zendesk’s ability to successfully integrate the business of Momentive. If Zendesk is not able to successfully integrate Momentive’s business within the anticipated time frame, or at all, the anticipated operational scale efficiencies and other benefits of the merger may not be realized fully, or at all, or may take longer to realize than expected.

An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company.

Zendesk and Momentive have operated and, until the completion of the merger, will continue to operate independently. There can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Zendesk or Momentive employees, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. The challenges involved in this integration, which will be complex and time-consuming, include the following:

 

   

combining the companies’ operations and corporate functions;

 

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combining the businesses of Zendesk and Momentive and meeting the capital requirements of the combined company in a manner that permits the combined company to achieve any revenue synergies or operational scale efficiencies anticipated to result from the merger, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all;

 

   

integrating and retaining personnel from the two companies, especially in the COVID-19 environment which has required employees to work remotely in most locations;

 

   

integrating the companies’ technologies and technologies licensed from third parties;

 

   

integrating and unifying the offerings and services available to customers;

 

   

identifying and eliminating redundant and underperforming functions and assets;

 

   

harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

 

   

maintaining existing agreements with customers, partners, suppliers and vendors, avoiding delays in entering into new agreements with prospective customers, partners, suppliers and vendors, and leveraging relationships with such third parties for the benefit of the combined company;

 

   

addressing possible differences in business backgrounds, corporate cultures and management philosophies;

 

   

consolidating the companies’ administrative and information technology infrastructure;

 

   

coordinating sales motions and go-to-market efforts;

 

   

coordinating geographically dispersed organizations; and

 

   

effecting actions that may be required in connection with obtaining regulatory or other governmental approvals.

In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the merger and the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the combined company.

The combined company faces a number of risks in targeting larger organizations for sales of its solutions and, if the combined company does not manage these efforts effectively, its business and results of operations could be adversely affected.

As both Zendesk and Momentive have targeted a portion of their respective sales efforts to larger organizations, the combined company will have a larger base of, and be subject to the risks associated with sales to, enterprise customers, including the higher costs in connection with such sales, long sales cycles and less predictability in the completion of such sales. In this market segment, the decision to subscribe to one or more of the combined company’s product and platform solutions may require the approval of a greater number of technical personnel and management levels within a potential customer’s organization than either Zendesk or Momentive may have historically encountered, and if so, these types of sales would require the combined company to invest more time educating these potential customers on the benefits of the combined company’s solutions.

Following completion of the merger, the success of the broader market acceptance of the combined company’s product and platform solutions will depend on its offering solutions designed to give organizations of all sizes the ability to deliver powerful customer experiences with a focus on solutions that have the broadest market appeal across those organizations. Larger organizations may demand more features and integration services than small

 

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to midsized organizations. The combined company may not be able to devote sufficient resources to developing those features and functionality in its solutions that are exclusively in demand by large organizations, which may negatively affect the combined company’s potential sales to those organizations. Further, as the combined company grows its operations to focus on self-serve capabilities and simplicity in buying the combined company’s solutions, many of those efforts may not be effective in selling and marketing to larger organizations as those organizations may require greater customer-specific investment, which may additionally impact potential sales to those organizations. To the extent the combined company invests in a customer-specific investment, such investment may be a disproportionately large focus of internal resources on a small number of customers, negatively impacting the efficient use of those resources.

Both Zendesk and Momentive had limited experience in developing and managing sales channels and distribution arrangements for larger organizations; therefore, the combined company may face the risks related to such management and distribution for larger organizations as well. The combined company may experience difficulty hiring employees with qualifications appropriate for selling to larger organizations, which could adversely affect its ability to meet expected sales targets. Further, given their generally broader international presence, selling to larger organizations also may require the combined company to divert resources to international regions in which it may not have sufficient personnel, affecting its results of operations. Sales opportunities to larger organizations may require the combined company to devote greater research and development, sales, marketing events, product support, and professional services resources to individual customers, resulting in increased costs and reduced profitability, and would likely lengthen the sales cycle, which could strain resources. Moreover, these transactions may require the combined company to delay recognizing portions of the associated revenue derived from these customers until any technical or implementation requirements have been met, and larger customers may demand discounts to the subscription prices they pay for the combined company’s solutions. Furthermore, because of the combined company’s limited experience selling to larger organizations, its investment in marketing our solutions to these potential customers may not be successful, which could harm its results of operations and the combined company’s overall ability to grow its customer base. Following sales to larger organizations, the combined company may not fully understand the opportunities to expand usage of its solutions or to sell additional functionality within such organizations, and it may not be able to effectively predict subscription terminations, any of which could harm the results of operations of the combined company.

The combined company may be unable to realize the anticipated synergies and expects to incur substantial expenses related to the merger, which could adversely affect the combined company’s business, financial condition and results of operations.

According to the Zendesk projections (as defined in the section titled “The MergerZendesk Unaudited Financial Projections”), the merger is expected to generate revenue synergies beginning in fiscal year 2022, taking into account, among other things, the combined company’s ability to cross-sell Momentive’s products to Zendesk’s customer base, the combined company’s ability to cross-sell Zendesk’s products to Momentive’s customers, and the combined company’s ability to leverage Zendesk’s assets, global presence and operating model to increase Momentive’s penetration of larger accounts and international customers. However, the combined company is expected to incur non-recurring costs associated with combining the operations of the two companies and achieving the desired revenue synergies, which will offset a portion of such revenue synergies. The combined company’s ability to achieve such estimated revenue synergies in the timeframe described, or at all, is subject to various assumptions, which may or may not prove to be accurate. As a consequence, the combined company may not be able to realize all of these revenue synergies within the timeframe expected or at all. In addition, the combined company may incur additional or unexpected costs in order to realize these revenue synergies. Failure to achieve the expected revenue growth and other synergies could significantly reduce the expected benefits associated with the merger.

 

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The combined company may not be able to retain customers, partners or suppliers, or customers, partners or suppliers may seek to modify contractual relationships with the combined company, which could have an adverse effect on the combined company’s business and operations.

As a result of the merger, the combined company may experience impacts on relationships with customers, partners or suppliers that may harm the combined company’s business and results of operations. Certain customers, partners or suppliers may seek to terminate or modify contractual obligations following the merger whether or not contractual rights are triggered as a result of the merger. There can be no guarantee that customers, partners or suppliers will remain with or continue to have a relationship with the combined company or do so on the same or similar contractual terms following the merger. If any customers, partners or suppliers seek to terminate or modify contractual obligations or discontinue the relationship with the combined company, then the combined company’s business and results of operations may be harmed.

Completion of the transaction may trigger change in control, assignment or other provisions in certain agreements to which Momentive is a party, which may have an adverse impact on the combined company’s business and results of operations.

The completion of the merger may trigger change in control, assignment and other provisions in certain agreements to which Momentive is a party. If Momentive is unable to negotiate waivers of or consents under those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages or other remedies. Even if Momentive is able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to the combined company. Any of the foregoing or similar developments may have an adverse impact on the business, financial condition and results of operations of the combined company, or the ability of Zendesk to successfully integrate Momentive’s business.

The combined company may be exposed to increased litigation, which could have an adverse effect on the combined company’s business and operations.

The combined company may be exposed to increased litigation from stockholders, customers, partners, suppliers, consumers and other third parties due to the combination of Zendesk’s and Momentive’s businesses following the merger. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations.

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and may not be reflective of the operating results and financial condition of the combined company following completion of the merger.

The unaudited pro forma condensed combined financial information and comparative historical unaudited pro forma per share data included in this joint proxy statement/prospectus are presented for illustrative purposes only, contain a variety of adjustments, assumptions and preliminary estimates and are not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the merger been completed on the dates indicated. The combined company’s actual results and financial position after the merger may differ materially and adversely from the unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus. The unaudited pro forma condensed combined financial information reflects adjustments based upon preliminary estimates of the fair value of assets to be acquired and liabilities to be assumed. The final acquisition accounting will be based upon the actual consideration transferred and the fair value of the assets and liabilities of Momentive as of the date of the completion of the merger. Accordingly, the final acquisition accounting may differ materially from the unaudited pro forma condensed combined financial information reflected in this joint proxy statement/prospectus. For more information, see the section titled “Comparative Historical Unaudited Pro Forma Per Share Data” and “Unaudited Pro Forma Condensed Combined Financial Statements.”

 

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While presented with numeric specificity, the unaudited pro forma condensed combined financial information provided in this joint proxy statement/prospectus is based on numerous variables and assumptions (including, but not limited to, those related to industry performance and competition, general business, the software and related industries, and economic, market and financial conditions and additional matters specific to Zendesk’s or Momentive’s business, as applicable) that are inherently subjective and uncertain and are beyond the control of the respective management teams of Zendesk and Momentive. As a result, actual results may differ materially from the unaudited pro forma condensed combined financial information. Important factors that may affect actual results include, but are not limited to, risks and uncertainties relating to Zendesk’s or Momentive’s business, as applicable (including each company’s ability to achieve strategic goals, objectives and targets over applicable periods), industry performance, general business and economic conditions. See the section titled “Unaudited Pro Forma Condensed Combined Financial Statements.”

The combined company’s ability to use net operating losses to offset future taxable income may be subject to certain limitations.

As of December 31, 2020, due to prior period losses, Zendesk had federal and state net operating loss carryforwards, which are referred to as “NOLs,” of $1,230 million and $491 million, respectively, and Momentive had $292 million of federal and $188 million of state NOLs. In general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income. Certain of Momentive’s NOLs are already subject to limitation as a result of previous transactions and it is expected that the remainder will become subject to limitations as a result of the merger. Zendesk’s NOLs may also be subject to limitations arising from ownership changes, including in connection with Zendesk’s initial public offering, follow-on public offering or the share issuance in connection with the merger.

Future changes in Zendesk’s stock ownership, some of which are outside of Zendesk’s control, also could result in an ownership change under Section 382 of the Code, which could further limit the ability to utilize Zendesk’s and Momentive’s NOLs. NOLs generated before fiscal year 2018 generally are subject to a 20-year carryover limitation and may expire if unused within that period. There is also a risk that due to legislative changes, such as suspensions on the use of NOLs, or other unforeseen reasons, existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. In addition, under the Tax Cuts and Jobs Act of 2017, as modified by the Coronavirus Aid, Relief, and Economic Security Act, the amount of NOLs that can be deducted in any taxable year generally is limited to 80% of the company’s (or in some cases the relevant group of companies’) taxable income in such year, where taxable income is determined without regard to the NOL deduction itself. For these reasons, Zendesk and Momentive may not be able to realize a tax benefit from the use of their NOLs, whether or not they attain profitability.

The combined company’s debt may limit its financial flexibility.

Zendesk and Momentive may seek to repay, refinance, repurchase, redeem, exchange or otherwise terminate their existing indebtedness prior to, in connection with or following the completion of the merger. If either Zendesk or Momentive seeks to refinance its existing indebtedness, there can be no guarantee that it will be able to execute the refinancing on favorable terms or at all. Alternatively, Zendesk and Momentive may seek to leave all or a portion of their existing indebtedness outstanding as the primary obligation of the combined company or to incur additional indebtedness or refinancing indebtedness prior to, in connection with or following the completion of the merger.

Zendesk’s or Momentive’s substantial indebtedness could have adverse effects on such company’s and/or the combined company’s financial condition and results of operations, including:

 

   

increasing its vulnerability to changing economic, regulatory and industry conditions;

 

   

limiting its ability to compete and its flexibility in planning for, or reacting to, changes in its business and the industry;

 

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limiting its ability to pay dividends to its stockholders;

 

   

limiting its ability to borrow additional funds; and

 

   

increasing its interest expense and requiring it to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for working capital, capital expenditures, acquisitions, and share repurchases, dividends and other purposes.

The companies’ ability to arrange any additional financing for the purposes described above or otherwise will depend on, among other factors, the companies’ respective financial positions and performance, as well as prevailing market conditions and other factors beyond their control. The level and quality of the combined company’s earnings, operations, business and management, among other things, will impact the determination of the combined company’s credit ratings. A decrease in the ratings assigned to the combined company by the ratings agencies may negatively impact the combined company’s access to the debt capital markets and increase the combined company’s cost of borrowing. There can be no assurance that the combined company will be able to obtain financing on acceptable terms or at all. In addition, there can be no assurance that the combined company will be able to maintain the current creditworthiness or prospective credit ratings of Zendesk or Momentive, and any actual or anticipated changes or downgrades in such credit ratings may have a negative impact on the liquidity, capital position or access to capital markets of the combined company.

Declaration, payment and amounts of dividends, if any, distributed to stockholders of the combined company will be uncertain.

Zendesk does not currently pay dividends and does not currently intend to pay dividends following the merger. The Zendesk board of directors will have the discretion to determine the dividend policy of the combined company, including the amount and timing of dividends, if any, that the combined company may declare from time to time, which may be impacted by a number of factors, including the combined company’s financial condition, operations, cash flow, debt financing arrangements, general business conditions, and other factors that the Zendesk board of directors may deem relevant. Stockholders should be aware that they have no contractual or other legal right to dividends that have not been declared.

The COVID-19 pandemic may cause harm to the business, results of operations, and financial condition of the combined company.

The COVID-19 pandemic has caused adverse public health developments, including orders to shelter-in-place, travel restrictions, and mandated business closures, which have adversely affected workforces, organizations, customers, economies, and financial markets globally. In light of the uncertain and evolving situation relating to COVID-19, Zendesk and Momentive have taken precautionary measures, including imposing travel restrictions for their employees and instituting work from home policies. Although Zendesk and Momentive continue to monitor the situation and may adjust their current policies as more information and public health guidance become available, precautionary measures that have been adopted by Zendesk and Momentive or may be adopted by the combined company could negatively affect the combined company’s customer success efforts, customer retention, sales and marketing efforts, delay and lengthen its sales cycles, affect its revenue growth rate, or create operational or other challenges, any of which could harm its business and results of operations. Additionally, customers and potential customers of the combined company may be exposed to similar operational considerations, resulting in significant pressures on their expenditures, and subsequently resulting in a decreased demand for the combined company’s business.

In addition, the COVID-19 pandemic may disrupt the operations of the combined company’s customers and partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact its business and results of operations, including cash flows. More generally, the COVID-19 pandemic has adversely affected economies and financial markets globally, potentially leading to prolonged and disproportionate impacts to certain industries, which could decrease technology spending and adversely affect demand for the combined company’s offerings and harm its business and results of operations.

 

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Further, as companies adapt to the changing economic environment, they may have purchasing behavior which does not match historical trends, which will negatively impact the combined company’s ability to forecast its results.

It is not possible to estimate the duration or magnitude of the adverse results of the COVID-19 pandemic and its effects on the combined company’s business, results of operations, or financial condition at this time as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

Zendesk’s charter documents designate specific courts as the exclusive forum for certain litigation that may be initiated by Zendesk’s stockholders, which could limit the ability of stockholders of the combined company to obtain a favorable judicial forum for disputes with the combined company.

Zendesk’s certificate of incorporation and bylaws provide that, unless Zendesk consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (A) any derivative action or proceeding brought on Zendesk’s behalf; (B) any action asserting a claim of breach of a fiduciary duty owed by any of Zendesk’s directors, officers, or other employees to Zendesk or its stockholders; (C) any action asserting a claim arising pursuant to any provision of the DGCL or the Zendesk certificate of incorporation or Zendesk bylaws (including the interpretation, validity or enforceability thereof); or (D) any action asserting a claim governed by the internal affairs doctrine, which is referred to as the “Delaware forum provision.” The Delaware forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. The Zendesk bylaws further provide that unless Zendesk consents in writing to the selection of an alternative forum, the district courts of the United States shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, which is referred to as the “federal forum provision.” In addition, the Zendesk bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of Zendesk’s capital stock is deemed to have notice of and consented to the Delaware forum provision and the federal forum provision; provided, however, that stockholders cannot and will not be deemed to have waived Zendesk’s compliance with the U.S. federal securities laws and the rules and regulations thereunder.

The Delaware forum provision and the federal forum provision in the Zendesk bylaws may impose additional litigation costs on stockholders in pursuing any such claims. Additionally, these forum selection clauses may limit Zendesk stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with Zendesk or its directors, officers or employees, which may discourage the filing of lawsuits against Zendesk and its directors, officers and employees, even though an action, if successful, might benefit Zendesk stockholders. In addition, Section 22 of the Securities Act creates a concurrent jurisdiction for state and federal courts over all suits brought concerning a duty or liability created by the securities laws, rules and regulations thereunder. While the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce its federal forum provision. If the federal forum provision is found to be unenforceable, Zendesk may incur additional costs associated with resolving such matters. The federal forum provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to Zendesk than its stockholders.

Other Risk Factors Related to Zendesk and Momentive

Zendesk’s and Momentive’s businesses are and will be subject to the risks described above. In addition, Zendesk and Momentive are, and will continue to be, subject to the risks described in, as applicable, Zendesk’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Momentive’s Annual Report

 

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on Form 10-K for the fiscal year ended December 31, 2020, as such risks may be updated or supplemented in each company’s subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each of which are filed with the SEC and incorporated by reference in this joint proxy statement/prospectus. See the section titled “Where You Can Find More Information.”

 

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THE PARTIES TO THE MERGER

Zendesk, Inc.

Founded in 2007, Zendesk is a service-first customer relationship management company, built to give organizations of all sizes, in every industry, the ability to deliver a transparent, responsive, and empowering customer experience. With solutions designed to address an increasingly broad set of customer interactions, Zendesk allows organizations to deliver omnichannel customer service, customize and build apps across the customer journey. Zendesk has evolved its offerings over time to product and platform solutions that work together to help organizations understand the broader customer journey, improve communications across all channels, and engage where and when it’s needed most. Zendesk’s principal executive offices are located at 989 Market Street, San Francisco, California 94103, and its telephone number is (415) 418-7506.

Momentive Global Inc.

Founded under the name “SurveyMonkey” in 1999, Momentive is an agile experience management company focused on helping customers shape what’s next. Momentive’s platform empowers users to collect, analyze, and act on feedback from customers, employees, website and app users, and market research audiences. Our products enable more than 345,000 organizations to deliver better customer experiences, increase employee retention, and unlock growth and innovation. Momentive offers SaaS feedback solutions across three major product categories—Surveys, Customer Experience, and Market Research. Momentive’s principal executive offices are located at One Curiosity Way, San Mateo, California 94403, and its telephone number is (650) 543-8400.

Milky Way Acquisition Corp.

Merger Sub was formed by Zendesk solely in contemplation of the merger, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the merger agreement. By operation of the merger, Merger Sub will be merged with and into Momentive, with Momentive continuing as the surviving corporation and as a wholly owned subsidiary of Zendesk. Merger Sub’s principal executive offices are located at 989 Market Street, San Francisco, California 94103.

 

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THE ZENDESK SPECIAL MEETING

This joint proxy statement/prospectus is being provided to Zendesk stockholders in connection with the solicitation of proxies by the Zendesk board of directors for use at the Zendesk special meeting and at any adjournments or postponements thereof. Zendesk stockholders are encouraged to read this entire document carefully, including its annexes and the documents incorporated by reference herein, for more detailed information regarding the merger agreement and the transactions contemplated thereby.

Date, Time and Place of the Zendesk Special Meeting

The Zendesk special meeting is scheduled to be held virtually via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time.

The Zendesk special meeting will be held by means of remote communication via live webcast. There will not be a physical location. In light of continuing public health and travel concerns arising from the coronavirus (COVID-19) outbreak, Zendesk believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Zendesk board of directors and Zendesk management. Zendesk stockholders will be able to virtually attend and vote at the Zendesk special meeting by visiting www.cesonlineservices.com/zen22_vm, which is referred to as the “Zendesk special meeting website.”

Pre-Registering for the Zendesk Special Meeting

In order to attend the Zendesk special meeting, you must pre-register at www.cesonlineservices.com/zen22_vm by 10:00 a.m. Pacific Time on February 24, 2022. To pre-register for the meeting, please follow these instructions:

Stockholders of Record

Zendesk stockholders of record as of January 3, 2022, the Zendesk record date, may register to participate in the Zendesk special meeting remotely by visiting the website www.cesonlineservices.com/zen22_vm. Please have your proxy card, or notice, containing your control number available and follow the instructions to complete your registration request. After registering, Zendesk stockholders will receive a confirmation email with a link and instructions for accessing the virtual Zendesk special meeting. Requests to register to participate in the Zendesk special meeting remotely must be received no later than 10:00 a.m. Pacific Time on February 24, 2022.

Beneficial (Street Name) Stockholders

Zendesk stockholders whose shares are held through a bank, broker or other nominee as of January 3, 2022, the Zendesk record date, may register to participate in the Zendesk special meeting remotely by visiting the website www.cesonlineservices.com/zen22_vm. Please have your voting instruction form, notice, or other communication containing your control number available and follow the instructions to complete your registration request. After registering, Zendesk stockholders will receive a confirmation email with a link and instructions for accessing the virtual Zendesk special meeting. Requests to register to participate in the Zendesk special meeting remotely must be received no later than 10:00 a.m. Pacific Time on February 24, 2022.

Questions on How to Pre-Register

If you have any questions or require any assistance with pre-registering, please email the support team at the email address indicated on the Zendesk special meeting website or contact MacKenzie Partners, Zendesk’s proxy solicitor for the Zendesk special meeting, at (800) 322-2885.

 

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Matters to Be Considered at the Zendesk Special Meeting

The purpose of the Zendesk special meeting is to consider and vote on each of the following proposals, each of which is further described in this joint proxy statement/prospectus:

 

   

Zendesk Proposal 1—Zendesk Share Issuance Proposal: To approve the issuance of shares of Zendesk common stock to Momentive stockholders in connection with the merger contemplated by the merger agreement; and

 

   

Zendesk Proposal 2—Zendesk Adjournment Proposal: To approve the adjournment of the Zendesk special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zendesk special meeting to approve the Zendesk share issuance proposal.

Only business within the purposes described in the Zendesk special meeting notice may be conducted at the Zendesk special meeting.

Recommendation of the Zendesk Board of Directors

After careful consideration, the Zendesk board of directors unanimously: (i) determined that the merger and the share issuance, on the terms and subject to the conditions set forth in the merger agreement, are advisable and fair to, and in the best interests of, Zendesk and its stockholders; (ii) approved the merger agreement and the transactions contemplated thereby, including the merger and the share issuance; and (iii) recommended that Zendesk stockholders vote to approve the Zendesk share issuance proposal. See the section titled “The Merger—Zendesk’s Reasons for the Merger and Recommendation of the Zendesk Board of Directors.”

The Zendesk board of directors unanimously recommends that Zendesk stockholders vote:

 

   

Zendesk Proposal 1: “FOR” the Zendesk share issuance proposal; and

 

   

Zendesk Proposal 2: “FOR” the Zendesk adjournment proposal.

Record Date for the Zendesk Special Meeting and Voting Rights

The record date to determine Zendesk stockholders who are entitled to receive notice of and to vote at the Zendesk special meeting or any adjournments or postponements thereof is January 3, 2022. At the close of business on the Zendesk record date, there were 121,595,601 shares of Zendesk common stock issued and outstanding and entitled to vote at the Zendesk special meeting.

Each Zendesk stockholder is entitled to one vote on each proposal for each share of Zendesk common stock held of record at the close of business on the Zendesk record date. Only Zendesk stockholders of record at the close of business on the Zendesk record date are entitled to receive notice of and to vote at the Zendesk special meeting and any and all adjournments or postponements thereof.

A complete list of Zendesk stockholders entitled to vote at the Zendesk special meeting will be available for inspection at Zendesk’s headquarters during regular business hours for a period of no less than 10 days before the Zendesk special meeting at 989 Market Street, San Francisco, California 94103. If Zendesk’s headquarters are closed for health and safety reasons related to the COVID-19 pandemic during such period, the list of Zendesk’s stockholders will be made available for inspection upon request to Zendesk’s corporate secretary at 989 Market Street, San Francisco, California 94103, subject to the satisfactory verification of stockholder status. The list of Zendesk stockholders entitled to vote at the Zendesk special meeting will also be made available for inspection during the Zendesk special meeting via the Zendesk special meeting website.

Quorum; Abstentions and Broker Non-Votes

A quorum of Zendesk stockholders is necessary to conduct business at the Zendesk special meeting. The presence in person or by proxy of the holders of a majority of the issued and outstanding shares of Zendesk common stock entitled to vote at the Zendesk special meeting will constitute a quorum. Shares of Zendesk

 

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common stock present at the Zendesk special meeting by virtual attendance via the Zendesk special meeting website or represented by proxy and entitled to vote, including shares for which a Zendesk stockholder directs an “abstention” from voting, will be counted for purposes of determining a quorum. However, because all of the proposals for consideration at the Zendesk special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Zendesk stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals at the Zendesk special meeting. If a quorum is not present, the Zendesk special meeting will be adjourned or postponed until the holders of the number of shares of Zendesk common stock required to constitute a quorum attend.

Under NYSE rules, banks, brokers or other nominees who hold shares in “street name” on behalf of the beneficial owner of such shares have the authority to vote such shares in their discretion on certain “routine” proposals when they have not received voting instructions from the beneficial owners. However, banks, brokers or other nominees are not allowed under NYSE rules to exercise their voting discretion with respect to matters that are “non-routine.” This can result in a “broker non-vote,” which occurs on a proposal when (i) a bank, broker or other nominee has discretionary authority to vote on one or more “routine” proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other “non-routine” proposals without instructions from the beneficial owner of the shares, and (ii) the beneficial owner fails to provide the bank, broker or other nominee with voting instructions on a “non-routine” matter. All of the proposals for consideration at the Zendesk special meeting are considered “non-routine” matters, and banks, brokers or other nominees will not have discretionary authority to vote on any matter before the Zendesk special meeting. As a result, Zendesk does not expect any broker non-votes at the Zendesk special meeting and if you hold your shares of Zendesk common stock in “street name,” your shares will not be represented and will not be voted on any matter unless you affirmatively instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instructions provided by your bank, broker or other nominee. It is therefore critical that you cast your vote by instructing your bank, broker or other nominee on how to vote. Brokers will not be able to vote on any of the proposals before the Zendesk special meeting unless they have received voting instructions from the beneficial owners.

Required Votes

The vote required to approve each of the proposals listed below assumes the presence of a quorum at the Zendesk special meeting. As described above, Zendesk does not expect there to be any broker non-votes at the Zendesk special meeting.

 

Proposal

  

Required Vote

  

Effects of Certain Actions

Zendesk Proposal 1:

Zendesk share issuance proposal

   Approval requires the affirmative vote of a majority of votes cast on the proposal.    The failure to vote, failure to instruct your bank, broker or other nominee to vote shares held in “street name”, or abstention from voting will have no effect on the result of the vote on the Zendesk share issuance proposal, provided that a quorum is otherwise present at the Zendesk special meeting.

Zendesk Proposal 2:

Zendesk adjournment proposal

   Approval requires the affirmative vote of a majority of the votes cast on the proposal.    The failure to vote, failure to instruct your bank, broker or other nominee to vote shares held in “street name”, or abstention from voting will have no effect on the result of the vote on the Zendesk adjournment proposal, provided that a quorum is otherwise present at the Zendesk special meeting.

 

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Vote of Zendesk Directors and Executive Officers

As of January 3, 2022, the Zendesk record date, Zendesk directors and executive officers beneficially owned and were entitled to vote in the aggregate 1,232,287 shares of Zendesk common stock, which represented 1.01% of the Zendesk common stock issued and outstanding on the Zendesk record date. Although none of them has entered into any agreement obligating them to do so, Zendesk currently expects that all Zendesk directors and executive officers will vote their shares “FOR” the Zendesk share issuance proposal and “FOR” the Zendesk adjournment proposal. See the section titled “Interests of Zendesk Directors and Executive Officers in the Merger” in this joint proxy statement/prospectus and the arrangements described in Zendesk’s Definitive Proxy Statement on Schedule 14A for Zendesk’s 2021 annual meeting of stockholders, filed with the SEC on April 2, 2021, which is incorporated by reference in this joint proxy statement/prospectus.

Methods of Voting

Stockholders of Record

If you are a Zendesk stockholder of record, you may vote at the Zendesk special meeting by proxy over the internet or telephone or by mail, or by virtually attending and voting at the Zendesk special meeting via the Zendesk special meeting website, as described below.

 

   

By Internet: To vote via the Internet, go to the website indicated on the enclosed proxy card to complete an electronic proxy card. You will be asked to provide the control number from the enclosed proxy card. Your vote must be received by 8:00 a.m. Pacific Time on February 25, 2022 to be counted. If you vote via the Internet, you do not need to return a proxy card by mail.

 

   

By Telephone: To vote by telephone, dial the telephone number indicated on the enclosed proxy card and follow the recorded instructions. You will be asked to provide the control number from the enclosed proxy card. Your vote must be received by 8:00 a.m. Pacific Time on February 25, 2022 to be counted. If you vote by telephone, you do not need to return a proxy card by mail.

 

   

By Mail: To vote by mail using the proxy card (if you requested paper copies of the proxy materials to be mailed to you), you need to complete, date and sign the enclosed proxy card and return it promptly by mail in the envelope provided so that it is received no later than February 24, 2022. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail.

 

   

Virtually via the Zendesk Special Meeting Website: To vote at the Zendesk special meeting, visit www.cesonlineservices.com/zen22_vm, where you can virtually attend and vote at the Zendesk special meeting. To attend the Zendesk special meeting, you must pre-register at www.cesonlineservices.com/zen22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

Unless revoked, all duly executed proxies representing shares of Zendesk common stock entitled to vote at the Zendesk special meeting will be voted at the Zendesk special meeting and, where a choice has been specified on the proxy card, will be voted in accordance with such specification. If you submit an executed proxy without providing instructions for any proposal, your shares will be voted “FOR” the Zendesk share issuance proposal and “FOR” the Zendesk adjournment proposal.

Beneficial (Street Name) Stockholders

If you hold your shares of Zendesk common stock through a bank, broker or other nominee in “street name” instead of as a registered holder, you must follow the voting instructions provided by your bank, broker or other nominee in order to vote your shares. Your voting instructions must be received by your bank, broker or other nominee prior to the deadline set forth in the information from your bank, broker or other nominee on how to submit voting instructions. If you do not provide voting instructions to your bank, broker or other nominee for a proposal, your shares of Zendesk common stock will not be voted on that proposal because your bank, broker or

 

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other nominee does not have discretionary authority to vote on any of the proposals to be voted on at the Zendesk special meeting. See the section titled “—Quorum; Abstentions and Broker Non-Votes.”

If you hold your shares of Zendesk common stock through a bank, broker or other nominee in “street name” (instead of as a registered holder), you must obtain a legal proxy from your bank, broker or other nominee in order to vote at the Zendesk special meeting via the Zendesk special meeting website. See the section titled “—Virtually Attending the Zendesk Special Meeting.”

Virtually Attending the Zendesk Special Meeting

If you wish to virtually attend the Zendesk special meeting via the Zendesk special meeting website, you must (i) be a Zendesk stockholder of record at the close of business on January 3, 2022, the Zendesk record date, (ii) hold your shares of Zendesk common stock beneficially in the name of a broker, bank or other nominee as of the Zendesk record date or (iii) hold a valid proxy for the Zendesk special meeting.

To enter the Zendesk special meeting website and virtually attend the Zendesk special meeting, you must pre-register at www.cesonlineservices.com/zen22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

If you plan to virtually attend and vote at the Zendesk special meeting via the Zendesk special meeting website, Zendesk still encourages you to vote in advance by the internet, telephone or (if you received a paper copy of the proxy materials) by mail so that your vote will be counted even if you later decide not to virtually attend the Zendesk special meeting via the Zendesk special meeting website. Voting your proxy by the internet, telephone or mail will not limit your right to virtually attend and vote at the Zendesk special meeting via the Zendesk special meeting website if you later decide to do so.

Revocability of Proxies

Any Zendesk stockholder giving a proxy has the right to revoke it at any time before the proxy is voted at the Zendesk special meeting. If you are a Zendesk stockholder of record, you may revoke your proxy by any one of the following actions:

 

   

by sending a signed written notice of revocation to Zendesk’s Corporate Secretary, provided such notice is received no later than the close of business on February 24, 2022;

 

   

by voting again over the internet or telephone as instructed on your proxy card before the closing of the voting facilities at 8:00 a.m. Pacific Time on February 25, 2022;

 

   

by submitting a properly signed and dated proxy card with a later date that is received by Zendesk’s Corporate Secretary no later than the close of business on February 24, 2022; or

 

   

by virtually attending the Zendesk special meeting via the Zendesk special meeting website and requesting that your proxy be revoked, or virtually voting via the Zendesk special meeting website as described above.

Only your last submitted proxy will be considered.

Execution or revocation of a proxy will not in any way affect a Zendesk stockholder’s right to virtually attend and vote at the Zendesk special meeting via the Zendesk special meeting website.

Written notices of revocation and other communications relating to the revocation of proxies should be addressed to:

Zendesk, Inc.

Attn: Shanti Ariker, Corporate Secretary

secretary@zendesk.com

989 Market Street

San Francisco, California 94103

 

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If your shares of Zendesk common stock are held in “street name” and you previously provided voting instructions to your broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to revoke or change your voting instructions. You may also change your vote by obtaining a legal proxy from your bank, broker or other nominee and voting your shares at the Zendesk special meeting via the Zendesk special meeting website.

Proxy Solicitation Costs

Zendesk is soliciting proxies on behalf of the Zendesk board of directors. Zendesk will bear the entire cost of soliciting proxies from Zendesk stockholders. Proxies may be solicited on behalf of Zendesk or by Zendesk directors, officers and other employees in person or by mail, telephone, facsimile, messenger, the internet or other means of communication, including electronic communication. Zendesk directors, officers and employees will not be paid any additional amounts for their services or solicitation in this regard.

Zendesk will request that banks, brokers and other nominee record holders send proxies and proxy material to the beneficial owners of Zendesk common stock and secure their voting instructions, if necessary. Zendesk may be required to reimburse those banks, brokers and other nominees on request for their reasonable expenses in taking those actions.

Zendesk has also retained MacKenzie Partners to assist in soliciting proxies and in communicating with Zendesk stockholders and estimates that it will pay MacKenzie Partners a fee of approximately $150,000, plus reimbursement for certain out-of-pocket fees and expenses. Zendesk also has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Householding

SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. Zendesk has previously adopted householding for Zendesk stockholders of record. As a result, Zendesk stockholders with the same address and last name may receive only one copy of this joint proxy statement/prospectus. Registered Zendesk stockholders (those who hold shares of Zendesk common stock directly in their name with Zendesk’s transfer agent) may opt out of householding and receive a separate joint proxy statement/prospectus or other proxy materials by sending a written request to Zendesk at the address below.

Some brokers household proxy materials, delivering a single proxy statement or notice to multiple Zendesk stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker.

Zendesk will promptly deliver a copy of this joint proxy statement/prospectus to any Zendesk stockholder who only received one copy of these materials due to householding upon request in writing to: Zendesk, Inc., Attn: Shanti Ariker, Corporate Secretary, secretary@zendesk.com, 989 Market Street, San Francisco, California 94103 or by calling (415) 418-7506.

 

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Adjournments

If a quorum is present at the Zendesk special meeting but there are insufficient votes at the time of the Zendesk special meeting to approve the Zendesk share issuance proposal, then Zendesk stockholders may be asked to vote on the Zendesk adjournment proposal. If a quorum is not present, the presiding officer may adjourn the special meeting, from time to time, without notice other than announcement at the meeting of the hour, date and place, if any, to which the meeting is adjourned, and the means of remote communications, if any, by which Zendesk stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting. The presiding officer may also adjourn the meeting to another hour, date or place, even if a quorum is present.

At any subsequent reconvening of the Zendesk special meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting, and all proxies will be voted in the same manner as they would have been voted at the original convening of the Zendesk special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

Assistance

If you need assistance voting or completing your proxy card, or if you have questions regarding the Zendesk special meeting, please contact MacKenzie Partners, Zendesk’s proxy solicitor for the Zendesk special meeting, at:

 

LOGO

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

(800) 322-2885

proxy@mackenziepartners.com

ZENDESK STOCKHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT AND THE MERGER. IN PARTICULAR, ZENDESK STOCKHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.

 

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ZENDESK PROPOSAL 1: APPROVAL OF THE SHARE ISSUANCE

This joint proxy statement/prospectus is being furnished to you as a Zendesk stockholder in connection with the solicitation of proxies by the Zendesk board of directors for use at the Zendesk special meeting. At the Zendesk special meeting, Zendesk is asking Zendesk stockholders to consider and vote upon a proposal to approve the issuance of shares of Zendesk common stock to Momentive stockholders in connection with the merger. Based on the number of shares of Momentive common stock outstanding as of January 3, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, Zendesk expects to issue approximately 33.8 million shares of Zendesk common stock to Momentive stockholders in connection with the merger. The actual number of shares of Zendesk common stock to be issued in connection with the merger will be determined at the effective time based on the exchange ratio of 0.225 of a share of Zendesk common stock for each share of Momentive common stock and the number of shares of Momentive common stock outstanding at such time. Based on the number of shares of Zendesk common stock and Momentive common stock outstanding as of January 3, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, upon completion of the merger, the current Zendesk stockholders are expected to own approximately 78% of the outstanding shares of Zendesk common stock and former Momentive stockholders are expected to own approximately 22% of the outstanding shares of Zendesk common stock.

The Zendesk board of directors, after careful consideration, unanimously determined that the merger and the share issuance, on the terms and subject to the conditions set forth in the merger agreement, are advisable and fair to, and in the best interests of, Zendesk and its stockholders, and approved the merger agreement and the transactions contemplated thereby, including the merger and the share issuance.

The Zendesk board of directors unanimously recommends that Zendesk stockholders vote “FOR” the Zendesk share issuance proposal.

Assuming a quorum is present at the Zendesk special meeting, approval of the Zendesk share issuance proposal requires the affirmative vote of a majority of votes cast on the Zendesk share issuance proposal. If a Zendesk stockholder fails to vote, fails to instruct its bank, broker or other nominee to vote, or abstains from voting, it will have no effect on the result of the vote on the Zendesk share issuance proposal, provided that a quorum is otherwise present at the Zendesk special meeting.

THE ZENDESK BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ZENDESK STOCKHOLDERS VOTE “FOR” THE ZENDESK SHARE ISSUANCE PROPOSAL

 

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ZENDESK PROPOSAL 2: ADJOURNMENT OF THE ZENDESK SPECIAL MEETING

The Zendesk special meeting may be adjourned to another time and place if necessary or appropriate to permit the solicitation of additional proxies if there are insufficient votes at the time of the Zendesk special meeting to approve the Zendesk share issuance proposal.

Zendesk is asking Zendesk stockholders to authorize the holder of any proxy solicited by the Zendesk board of directors to vote in favor of any adjournment of the Zendesk special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the Zendesk share issuance proposal.

The Zendesk board of directors unanimously recommends that Zendesk stockholders vote “FOR” the Zendesk adjournment proposal.

Assuming a quorum is present at the Zendesk special meeting, approval of the Zendesk adjournment proposal requires the affirmative vote of a majority of the votes cast on the Zendesk adjournment proposal. If a Zendesk stockholder fails to vote, fails to instruct its bank, broker or other nominee to vote, or abstains from voting, it will have no effect on the result of the vote on the Zendesk adjournment proposal, provided that a quorum is otherwise present at the Zendesk special meeting.

THE ZENDESK BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ZENDESK STOCKHOLDERS VOTE “FOR” THE ZENDESK ADJOURNMENT PROPOSAL

 

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THE MOMENTIVE SPECIAL MEETING

This joint proxy statement/prospectus is being provided to Momentive stockholders in connection with the solicitation of proxies by the Momentive board of directors for use at the Momentive special meeting and at any adjournments or postponements thereof. Momentive stockholders are encouraged to read this entire document carefully, including its annexes and the documents incorporated by reference herein, for more detailed information regarding the merger agreement and the transactions contemplated thereby.

Date, Time and Place of the Momentive Special Meeting

The Momentive special meeting is scheduled to be held virtually via live webcast on February 25, 2022, beginning at 10:00 a.m. Pacific Time.

The Momentive special meeting will be held solely by means of remote communication via live webcast. There will not be a physical location. In light of continuing public health and travel concerns arising from the coronavirus (COVID-19) outbreak, Momentive believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Momentive board of directors and Momentive management. Momentive stockholders will be able to virtually attend and vote at the Momentive special meeting by visiting www.cesonlineservices.com/mntv22_vm, which is referred to as the “Momentive special meeting website.”

Pre-Registering for the Momentive Special Meeting

In order to attend the Momentive special meeting, you must pre-register at www.cesonlineservices.com/mntv22_vm by 10:00 a.m. Pacific Time on February 24, 2022. To pre-register for the meeting, please follow these instructions:

Stockholders of Record

Momentive stockholders of record as of January 3, 2022, the Momentive record date, may register to participate in the Momentive special meeting remotely by visiting the website www.cesonlineservices.com/mntv22_vm. Please have your proxy card, or notice, containing your control number available and follow the instructions to complete your registration request. After registering, Momentive stockholders will receive a confirmation email with a link and instructions for accessing the virtual Momentive special meeting. Requests to register to participate in the Momentive special meeting remotely must be received no later than 10:00 a.m. Pacific Time on February 24, 2022.

Beneficial (Street Name) Stockholders

Momentive stockholders whose shares are held through a bank, broker or other nominee as of January 3, 2022, the Momentive record date, may register to participate in the Momentive special meeting remotely by visiting the website www.cesonlineservices.com/mntv22_vm. Please have your voting instruction form, notice, or other communication containing your control number available and follow the instructions to complete your registration request. After registering, Momentive stockholders will receive a confirmation email with a link and instructions for accessing the virtual Momentive special meeting. Requests to register to participate in the Momentive special meeting remotely must be received no later than 10:00 a.m. Pacific Time on February 24, 2022.

Questions on How to Pre-Register

If you have any questions or require any assistance with pre-registering, please email the support team at the email address indicated on the Momentive special meeting website.

 

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Matters to Be Considered at the Momentive Special Meeting

The purpose of the Momentive special meeting is to consider and vote on each of the following proposals, each of which is further described in this joint proxy statement/prospectus:

 

   

Momentive Proposal 1—Adoption of the Merger Agreement: To adopt the merger agreement;

 

   

Momentive Proposal 2Approval, on an Advisory Non-Binding Basis, of Certain Merger-Related Compensatory Arrangements with Momentive’s Named Executive Officers: To approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Momentive named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement; and

 

   

Momentive Proposal 3Adjournment of the Momentive Special Meeting: To approve the adjournment of the Momentive special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Momentive special meeting to approve the Momentive merger proposal.

Only business within the purposes described in the Momentive special meeting notice may be conducted at the Momentive special meeting.

Recommendation of the Momentive Board of Directors

After careful consideration, the Momentive board of directors unanimously: (i) determined that the terms of the merger agreement and the transactions contemplated thereby are fair to and in the best interests of Momentive and its stockholders; (ii) declared advisable, approved and authorized in all respects the merger agreement, the performance of Momentive of its obligations thereunder and the consummation of the transactions contemplated thereby, on the terms and subject to the conditions set forth in the merger agreement; and (iii) recommended that Momentive stockholders adopt the merger agreement. See the section titled “The Merger—Momentive’s Reasons for the Merger and Recommendation of the Momentive Board of Directors.”

The Momentive board of directors unanimously recommends that Momentive stockholders vote:

 

   

Momentive Proposal 1: “FOR” the Momentive merger proposal;

 

   

Momentive Proposal 2: “FOR” the Momentive compensation proposal; and

 

   

Momentive Proposal 3: “FOR” the Momentive adjournment proposal.

Record Date for the Momentive Special Meeting and Voting Rights

The record date to determine Momentive stockholders who are entitled to receive notice of and to vote at the Momentive special meeting or any adjournments or postponements thereof is January 3, 2022. At the close of business on the Momentive record date, there were 150,398,525 shares of Momentive common stock issued and outstanding and entitled to vote at the Momentive special meeting.

Each Momentive stockholder is entitled to one vote on each proposal for each share of Momentive common stock held of record at the close of business on the Momentive record date. Only Momentive stockholders of record at the close of business on the Momentive record date are entitled to receive notice of and to vote at the Momentive special meeting and any and all adjournments or postponements thereof.

Quorum; Abstentions and Broker Non-Votes

A quorum of Momentive stockholders is necessary to conduct business at the Momentive special meeting. The presence, in person or by proxy of the holders of a majority of the issued and outstanding shares of Momentive common stock entitled to vote at the Momentive special meeting will constitute a quorum. Shares of Momentive

 

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common stock present at the Momentive special meeting by virtual attendance via the Momentive special meeting website or represented by proxy and entitled to vote, including shares for which a Momentive stockholder directs an “abstention” from voting, will be counted for purposes of determining a quorum. However, because all of the proposals for consideration at the Momentive special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Momentive stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals at the Momentive special meeting. If a quorum is not present, the Momentive special meeting will be adjourned or postponed until the holders of the number of shares of Momentive common stock required to constitute a quorum attend.

Under Nasdaq rules, banks, brokers or other nominees who hold shares in “street name” on behalf of the beneficial owner of such shares have the authority to vote such shares in their discretion on certain “routine” proposals when they have not received voting instructions from the beneficial owners. However, banks, brokers or other nominees are not allowed under Nasdaq rules to exercise their voting discretion with respect to matters that are “non-routine.” This can result in a “broker non-vote,” which occurs on a proposal when (i) a bank, broker or other nominee has discretionary authority to vote on one or more “routine” proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other “non-routine” proposals without instructions from the beneficial owner of the shares, and (ii) the beneficial owner fails to provide the bank, broker or other nominee with voting instructions on a “non-routine” matter. All of the proposals for consideration at the Momentive special meeting are considered “non-routine” matters, and banks, brokers or other nominees will not have discretionary authority to vote on any matter before the Momentive special meeting. As a result, Momentive does not expect any broker non-votes at the Momentive special meeting and if you hold your shares of Momentive common stock in “street name,” your shares will not be represented and will not be voted on any matter unless you affirmatively instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instructions provided by your bank, broker or other nominee. It is therefore critical that you cast your vote by instructing your bank, broker or other nominee on how to vote. Brokers will not be able to vote on any of the proposals before the Momentive special meeting unless they have received voting instructions from the beneficial owners.

Required Votes

The vote required to approve each of the proposals listed below assumes the presence of a quorum at the Momentive special meeting. As described above, Momentive does not expect there to be any broker non-votes at the Momentive special meeting.

 

Proposal

  

Required Vote

  

Effects of Certain Actions

Momentive Proposal 1:

Momentive merger proposal

   Approval requires the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date.    The failure to vote, the failure to instruct your bank, broker or other nominee to vote shares held in “street name” or an abstention from voting will have the same effect as a vote “AGAINST” the Momentive merger proposal.

Momentive Proposal 2:

Momentive compensation proposal

   Approval requires the affirmative vote of a majority of the shares of Momentive common stock present in person or by proxy and entitled to vote thereon.    Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Momentive compensation proposal, provided that a quorum is otherwise present.

 

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Proposal

  

Required Vote

  

Effects of Certain Actions

      An abstention or other failure of any shares present or represented by proxy to vote on the Momentive compensation proposal will have the same effect as a vote “AGAINST” the Momentive compensation proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive compensation proposal, it will have the same effect as a vote “AGAINST” the Momentive compensation proposal.

Momentive
Proposal 3:

Momentive adjournment proposal

   Approval requires the affirmative vote of a majority of the shares of Momentive common stock present in person or by proxy and entitled to vote thereon.    Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Momentive adjournment proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the Momentive adjournment proposal will have the same effect as a vote “AGAINST” the Momentive adjournment proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive adjournment proposal, it will have the same effect as a vote “AGAINST” the Momentive adjournment proposal.

Vote of Momentive Directors and Executive Officers

As of January 3, 2022, the Momentive record date, Momentive directors and executive officers beneficially owned and were entitled to vote in the aggregate 18,848,082 shares of Momentive common stock, including 17,886,540 shares of Momentive common stock covered by the voting agreements described in the section titled “Voting Agreements,” which represented 12.53% of the Momentive common stock issued and outstanding on the Momentive record date.

Momentive currently expects that all Momentive directors and Momentive officers will vote their shares “FOR” the Momentive merger proposal, “FOR” the Momentive compensation proposal and “FOR” the Momentive adjournment proposal. See the section titled “Interests of Momentive Directors and Executive Officers In The Merger” in this joint proxy statement/prospectus and the arrangements described in Momentive’s Definitive Proxy Statement on Schedule 14A for Momentive’s 2021 annual meeting of stockholders, filed with the SEC on April, 20 2021, which is incorporated by reference in this joint proxy statement/prospectus.

 

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Methods of Voting

Stockholders of Record

If you are a Momentive stockholder of record, you may vote at the Momentive special meeting by proxy through the internet, by telephone or by mail, or by virtually attending and voting at the Momentive special meeting via the Momentive special meeting website, as described below.

 

   

By Internet: To vote via the Internet, go to the website indicated on the enclosed proxy card to complete an electronic proxy card. You will be asked to provide the control number from the enclosed proxy card. If you vote via the Internet, you do not need to return a proxy card by mail.

 

   

By Telephone: To vote by telephone, dial the telephone number indicated on the enclosed proxy card and follow the recorded instructions. You will be asked to provide the control number from the enclosed proxy card. If you vote by telephone, you do not need to return a proxy card by mail.

 

   

By Mail: To vote by mail using the proxy card (if you requested paper copies of the proxy materials to be mailed to you), you need to complete, date and sign the enclosed proxy card and return it promptly by mail in the envelope provided so that it is received no later than February 24, 2022. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail.

 

   

Virtually via the Momentive Special Meeting Website: To vote at the Momentive special meeting, visit www.cesonlineservices.com/mntv22_vm, where you can virtually attend and vote at the Momentive special meeting. To attend the Momentive special meeting, you must pre-register at www.cesonlineservices.com/mntv22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

Unless revoked, all duly executed proxies representing shares of Momentive common stock entitled to vote at the Momentive special meeting will be voted at the Momentive special meeting and, where a choice has been specified on the proxy card, will be voted in accordance with such specification. If you submit an executed proxy without providing instructions for any proposal, your shares will be voted “FOR” the Momentive merger proposal, “FOR” the Momentive compensation proposal and “FOR” the Momentive adjournment proposal. Momentive does not expect that any matter other than the proposals listed above will be brought before the Momentive special meeting.

Beneficial (Street Name) Stockholders

If you hold your shares of Momentive common stock through a bank, broker or other nominee in “street name” instead of as a registered holder, you must follow the voting instructions provided by your bank, broker or other nominee in order to vote your shares. Your voting instructions must be received by your bank, broker or other nominee prior to the deadline set forth in the information from your bank, broker or other nominee on how to submit voting instructions. If you do not provide voting instructions to your bank, broker or other nominee for a proposal, your shares of Momentive common stock will not be voted on that proposal because your bank, broker or other nominee does not have discretionary authority to vote on any of the proposals to be voted on at the Momentive special meeting. See the section titled “—Quorum; Abstentions and Broker Non-Votes.”

If you hold your shares of Momentive common stock through a bank, broker or other nominee in “street name” (instead of as a registered holder), you must obtain a legal proxy from your bank, broker or other nominee in order to vote at the Momentive special meeting via the Momentive special meeting website. See the section titled “—Virtually Attending the Momentive Special Meeting.”

Virtually Attending the Momentive Special Meeting

If you wish to virtually attend the Momentive special meeting via the Momentive special meeting website, you must (i) be a Momentive stockholder of record at the close of business on January 3, 2022, which is referred to as

 

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the “Momentive record date,” (ii) hold your shares of Momentive common stock beneficially in the name of a broker, bank or other nominee as of the Momentive record date or (iii) hold a valid proxy for the Momentive special meeting.

To enter the Momentive special meeting website and virtually attend the Momentive special meeting, you must pre-register at www.cesonlineservices.com/mntv22_vm by 10:00 a.m. Pacific Time on February 24, 2022.

If you plan to virtually attend and vote at the Momentive special meeting via the Momentive special meeting website, Momentive still encourages you to vote in advance by the internet, telephone or (if you received a paper copy of the proxy materials) by mail so that your vote will be counted even if you later decide not to virtually attend the Momentive special meeting via the Momentive special meeting website. Voting your proxy by the internet, telephone or mail will not limit your right to virtually attend and vote at the Momentive special meeting via the Momentive special meeting website if you later decide to do so.

Revocability of Proxies

Any Momentive stockholder giving a proxy has the right to revoke it at any time before the proxy is voted at the Momentive special meeting. If you are a Momentive stockholder of record, you may revoke your proxy by any of the following actions:

 

   

by sending a signed written notice of revocation to Momentive’s Corporate Secretary, provided such notice is received no later than the close of business on February 24, 2022;

 

   

by voting again over the internet or telephone as instructed on your proxy card before the closing of the voting facilities;

 

   

by submitting a properly signed and dated proxy card with a later date that is received by Momentive’s Corporate Secretary no later than the close of business on February 24, 2022; or

 

   

by virtually attending the Momentive special meeting via the Momentive special meeting website and requesting that your proxy be revoked, or by virtually attending and voting at the Momentive special meeting via the Momentive special meeting website as described above.

Only your last submitted proxy will be considered.

Execution or revocation of a proxy will not in any way affect a Momentive stockholder’s right to virtually attend and vote at the Momentive special meeting via the Momentive special meeting website.

Written notices of revocation and other communications relating to the revocation of proxies should be addressed to:

Momentive Global Inc.

Attention: Secretary

One Curiosity Way

San Mateo, California 94403

(650) 543-8400

If your shares of Momentive common stock are held in “street name” and you previously provided voting instructions to your broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to revoke or change your voting instructions. You may also change your vote by obtaining a legal proxy from your bank, broker or other nominee and voting your shares at the Momentive special meeting via the Momentive special meeting website.

 

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Proxy Solicitation Costs

Momentive is soliciting proxies on behalf of the Momentive board of directors. Momentive will bear the entire cost of soliciting proxies from Momentive stockholders. Proxies may be solicited on behalf of Momentive or Momentive directors, officers and other employees in person or by mail, telephone, facsimile, messenger, the internet or other means of communication, including electronic communication. Momentive directors, officers and employees will not be paid any additional amounts for their services or solicitation in this regard.

Momentive will request that banks, brokers and other nominee record holders send proxies and proxy material to the beneficial owners of Momentive common stock and secure their voting instructions, if necessary. Momentive may be required to reimburse those banks, brokers and other nominees on request for their reasonable expenses in taking those actions.

Momentive has also retained Innisfree to assist in soliciting proxies and in communicating with Momentive stockholders and estimates that it will pay Innisfree a fee of approximately $100,000, plus reimbursement for certain out-of-pocket fees and expenses. Momentive also has agreed to indemnify Innisfree against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Householding

SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. Momentive has previously adopted householding for Momentive stockholders of record. As a result, Momentive stockholders with the same address and last name may receive only one copy of this joint proxy statement/prospectus. Registered Momentive stockholders (those who hold shares of Momentive common stock directly in their name with Momentive’s transfer agent) may opt out of householding and receive a separate joint proxy statement/prospectus or other proxy materials by sending a written request to Momentive at the address below.

Some brokers also household proxy materials, delivering a single proxy statement or notice to multiple Momentive stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker.

Momentive will promptly deliver a copy of this joint proxy statement/prospectus to any Momentive stockholder who received only one copy of these materials due to householding upon request in writing to: Momentive Global Inc., Attention: Secretary, One Curiosity Way, San Mateo, California 94403 or by calling (650) 543-8400.

Adjournments

If a quorum is present at the Momentive special meeting but there are insufficient votes at the time of the Momentive special meeting to approve the Momentive merger proposal, then Momentive stockholders may be asked to vote on the Momentive adjournment proposal. If a quorum is not present, the chairperson of the special meeting or the stockholders entitled to vote at the special meeting, present in person or represented by proxy, may adjourn the special meeting, from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. The chairperson may also adjourn the meeting to another place, if any, date or time, even if a quorum is present.

 

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At any subsequent reconvening of the Momentive special meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the Momentive special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

Assistance

If you need assistance voting or completing your proxy card, or if you have questions regarding the Momentive special meeting, please contact Innisfree, Momentive’s proxy solicitor for the Momentive special meeting, at:

 

LOGO

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, New York 10022

Shareholders may call toll free: (877) 825-8772

Banks and Brokers may call collect: (212) 750-5833

MOMENTIVE STOCKHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT AND THE MERGER. IN PARTICULAR, MOMENTIVE STOCKHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.

 

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MOMENTIVE PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

This joint proxy statement/prospectus is being furnished to you as a Momentive stockholder in connection with the solicitation of proxies by the Momentive board of directors for use at the Momentive special meeting. At the Momentive special meeting, Momentive is asking Momentive stockholders to consider and vote upon a proposal to adopt the merger agreement, pursuant to which Merger Sub will merge with and into Momentive, with Momentive continuing as the surviving corporation in the merger and as a wholly owned subsidiary of Zendesk. Upon completion of the merger, each share of Momentive common stock outstanding as of immediately prior to the effective time will be converted into the right to receive 0.225 of a share of Zendesk common stock and a cash payment (without interest and less any applicable withholding taxes) for any fractional shares resulting from such calculation.

The Momentive board of directors, after careful consideration, unanimously determined that the merger is fair to and in the best interests of Momentive and its stockholders, and approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger.

The Momentive board of directors accordingly unanimously recommends that Momentive stockholders vote “FOR” the Momentive merger proposal.

The merger and a summary of the terms of the merger agreement are described in more detail under “The Merger” and “The Merger Agreement,” and Momentive stockholders are encouraged to read the full text of the merger agreement, which is attached as Annex A hereto.

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive merger proposal requires the affirmative vote of a majority of the shares of Momentive common stock outstanding at the close of business on the Momentive record date. If a Momentive stockholder fails to vote, fails to instruct its bank, broker or other nominee to vote or abstains from voting, it will have the same effect as a vote “AGAINST” the Momentive merger proposal.

It is a condition to the completion of the merger that Momentive stockholders approve the Momentive merger proposal.

THE MOMENTIVE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT MOMENTIVE STOCKHOLDERS VOTE “FOR” THE MOMENTIVE MERGER PROPOSAL

 

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MOMENTIVE PROPOSAL 2: ADVISORY NON-BINDING VOTE ON MERGER-RELATED COMPENSATION FOR NAMED EXECUTIVE OFFICERS

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, Momentive is required to submit to a non-binding advisory stockholder vote certain compensation that may be paid or become payable to Momentive named executive officers that is based on or otherwise relates to the merger as disclosed in the section titled “Interests of Momentive Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to Momentive Named Executive Officers—Golden Parachute Compensation.” The Momentive compensation proposal gives Momentive stockholders the opportunity to express their views on the merger-related compensation of Momentive named executive officers.

Accordingly, Momentive is asking Momentive stockholders to vote “FOR” the adoption of the following resolution, on a non-binding advisory basis:

“RESOLVED, that the compensation that may be paid or become payable to Momentive named executive officers that is based on or otherwise relates to the merger, as disclosed pursuant to Item 402(t) of Regulation S-K under the heading “Interests of Momentive Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to Momentive Named Executive Officers—Golden Parachute Compensation,” including the associated narrative discussion and the agreements, plans, arrangements or understandings pursuant to which such compensation may be paid or become payable, are hereby APPROVED.”

The vote on the Momentive compensation proposal is a vote separate and apart from the vote to adopt the merger agreement. Accordingly, if you are a Momentive stockholder, you may vote to approve the Momentive merger proposal and vote not to approve the Momentive compensation proposal, and vice versa. The vote on the Momentive compensation proposal is advisory and non-binding. As a result, if the merger is completed, the merger-related compensation may be paid to Momentive named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if Momentive stockholders do not approve the Momentive compensation proposal.

The Momentive board of directors unanimously recommends that Momentive stockholders vote “FOR” the Momentive compensation proposal.

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive compensation proposal requires the affirmative vote of a majority of the shares of Momentive common stock present in person or by proxy at the Momentive special meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Momentive compensation proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the Momentive compensation proposal will have the same effect as a vote “AGAINST” the Momentive compensation proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive compensation proposal, it will have the same effect as a vote “AGAINST” the Momentive compensation proposal.

THE MOMENTIVE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT MOMENTIVE STOCKHOLDERS VOTE “FOR” THE MOMENTIVE COMPENSATION PROPOSAL

 

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MOMENTIVE PROPOSAL 3: ADJOURNMENT OF THE MOMENTIVE SPECIAL MEETING

The Momentive special meeting may be adjourned to another time and place if necessary or appropriate in order to permit the solicitation of additional proxies if there are insufficient votes to approve the Momentive merger proposal.

Momentive is asking Momentive stockholders to authorize the holder of any proxy solicited by the Momentive board of directors to vote in favor of any adjournment of the Momentive special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the Momentive merger proposal.

The Momentive board of directors unanimously recommends that Momentive stockholders approve the proposal to adjourn the Momentive special meeting, if necessary or appropriate.

Assuming a quorum is present at the Momentive special meeting, approval of the Momentive adjournment proposal requires the affirmative vote of a majority of the shares of Momentive common stock present in person or by proxy at the Momentive special meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Momentive special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Momentive adjournment proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the Momentive adjournment proposal will have the same effect as a vote “AGAINST” the Momentive adjournment proposal. In addition, if a Momentive stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Momentive adjournment proposal, it will have the same effect as a vote “AGAINST” the Momentive adjournment proposal.

THE MOMENTIVE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT MOMENTIVE STOCKHOLDERS VOTE “FOR” THE MOMENTIVE ADJOURNMENT PROPOSAL

 

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THE MERGER

The following is a description of material aspects of the merger. While Zendesk and Momentive believe that the following description covers the material terms of the merger, the description may not contain all of the information that is important to you. You are encouraged to read carefully this entire joint proxy statement/prospectus, including the text of the merger agreement attached as Annex A hereto, for a more complete understanding of the merger. In addition, important business and financial information about each of Zendesk and Momentive is contained or incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information.”

General

Zendesk, Merger Sub and Momentive have entered into the merger agreement, which provides for the merger of Merger Sub with and into Momentive. As a result of the merger, the separate existence of Merger Sub will cease and Momentive will continue its existence under the DGCL as the surviving corporation and as a wholly owned subsidiary of Zendesk. The surviving corporation will be named “Momentive Global Inc.”

Merger Consideration

At the effective time, each share of Momentive common stock (other than shares held in treasury by Momentive or held directly by Momentive or Merger Sub (which shares will be cancelled)) that was issued and outstanding immediately prior to the effective time will be converted into the right to receive 0.225 of a share of Zendesk common stock, a cash payment (without interest and less any applicable withholding taxes) for any fractional shares of Zendesk common stock resulting from such calculation and any dividends or other distributions that such holder of Momentive common stock is entitled to receive pursuant to the merger agreement.

The exchange ratio is fixed, which means that it will not change between now and the date of the merger, regardless of whether the market price of Zendesk common stock or Momentive common stock changes. Therefore, the value of the merger consideration will depend on the market price of Zendesk common stock at the effective time. The market price of Zendesk common stock has fluctuated since the date of the announcement of the merger agreement and is expected to continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the respective Zendesk special meeting and Momentive special meeting, through the date the merger is completed and thereafter. The market price of Zendesk common stock, when received by Momentive stockholders in connection with the merger, could be greater than, less than or the same as the market price of Zendesk common stock on the date of this joint proxy statement/prospectus or at the time of the Momentive special meeting. Accordingly, you should obtain current market quotations for Zendesk common stock and Momentive common stock before deciding how to vote on any of the proposals described in this joint proxy statement/prospectus. Zendesk common stock is traded on NYSE under the symbol “ZEN” and Momentive common stock is traded on Nasdaq under the symbol “MNTV.”

Background of the Merger

The Momentive board of directors regularly evaluates Momentive’s strategic direction and ongoing business plans with a view toward strengthening its business and enhancing stockholder value. As part of this evaluation, the Momentive board of directors has, from time to time, considered various potential strategic alternatives. These have included, among others, (1) the continuation of, and potential improvements to, Momentive’s business plan, with Momentive remaining an independent entity; (2) investment in, and development of, new products, go-to-market strategies and sales channels, as well as opportunities for reducing costs and improving operating margins; (3) potential expansion opportunities through acquisitions, partnerships or other commercial relationships; (4) debt and equity financing alternatives; and (5) business combinations and other financial and strategic alternatives, including a possible sale of Momentive. In connection with these efforts, from time to time

 

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representatives of Momentive have meetings, attend conferences and have other discussions with representatives of various strategic and financial sponsor counterparties regarding potential strategic transactions involving Momentive. As described below, Zander Lurie, Momentive’s chief executive officer, held several such discussions with representatives of certain financial sponsors in early 2021, after consulting with David Ebersman, the chair of the Momentive board of directors.

The Zendesk board of directors, in consultation with members of the Zendesk management team, periodically and in the ordinary course of business reviews Zendesk’s performance, future growth prospects and overall strategic direction in light of the current business and economic environment and in consideration of its long-term business strategy to enhance value for its stockholders. This entails reviewing Zendesk’s strategy as a standalone company and considering potential opportunities for business combinations, acquisitions, and other financial and strategic alternatives.

On March 26, 2021, following an outreach by a financial sponsor, which we refer to as “Party A,” Mr. Lurie met with a representative of Party A to discuss Momentive’s business. At the meeting, the representative of Party A expressed an interest in receiving due diligence information regarding Momentive’s business.

On March 29, 2021, Mr. Lurie met with representatives of a financial sponsor, which we refer to as “Party B,” to discuss Momentive’s business. At this meeting, the representatives of Party B expressed an interest in learning more about Momentive’s business.

On March 31, 2021, as a follow-up to their prior discussions, Mr. Lurie referred Party A to Lora Blum, Momentive’s chief legal officer, to negotiate a confidentiality agreement with respect to these discussions. Momentive and Party A entered into a confidentiality agreement on March 31, 2021.

On April 1, 2021, representatives of Party A requested from Momentive certain operational and financial due diligence information, and requested a meeting with members of Momentive management to discuss Momentive’s business.

On April 20, 2021, members of Momentive management met with representatives of Party A and provided an overview of Momentive’s business and operations.

On May 3, 2021, members of Momentive management met again with representatives of Party A to continue to discuss Momentive’s business and operations.

Between May 7, 2021 and May 18, 2021, a representative of Party A contacted Mr. Lurie on three occasions to express Party A’s interest in a potential transaction involving Momentive; this representative stated that Party A was interested in submitting a proposal to acquire Momentive. Mr. Lurie responded that he would convey Party A’s interest to the Momentive board of directors at its next regular meeting, which was scheduled to occur in the coming days.

On May 19, 2021, the Momentive board of directors held a regularly scheduled meeting with members of Momentive management in attendance. Mr. Lurie provided the Momentive board of directors with an update on discussions with Party A and Party B, including Party A’s interest in submitting a proposal to acquire Momentive. The Momentive board of directors discussed the possibility of forming a committee of the Momentive board of directors and engaging financial advisors to coordinate the evaluation and response to a potential acquisition proposal. The Momentive board of directors also met in executive session, without any members of management in attendance, and continued to discuss Party A’s interest, the execution of Momentive’s business plan and growth strategy and Momentive’s recent stock price performance, which the Momentive board of directors believed reflected a discount compared to Momentive’s peer companies. Over the 30 calendar days preceding the meeting on May 19, 2021, the volume weighted average price of Momentive common stock was $18.04 per share. The Momentive board of directors also discussed concerns that an

 

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acquisition proposal and due diligence expected to be conducted by a potential acquiror would divert management’s attention from the operation of the business. The Momentive board of directors instructed Ben Spero, a Momentive director, to work with Mr. Lurie and Momentive’s advisors to (1) develop a framework for use by the Momentive board of directors in evaluating any acquisition proposal and (2) coordinate responses to potential inquiries or proposals (including to Party A, consistent with the discussion of the Momentive board of directors at the meeting). The Momentive board of directors also requested that Messrs. Lurie and Spero provide updates to the Momentive board of directors as necessary.

On May 20, 2021, Mr. Ebersman introduced Mr. Lurie to representatives of a financial sponsor, which we refer to as “Party C,” via e-mail for the purposes of discussing Momentive’s business.

On May 21, 2021, Mr. Lurie called the representative of Party A to discuss the Momentive board of directors’ feedback. The representative of Party A indicated that he believed that Party A could deliver a proposal with a high premium relative to Momentive’s stock price. Mr. Lurie communicated that the Momentive board of directors had not approved the exploration of a potential sale transaction at that time, but would inform Party A if and when there was an opportunity in the future.

On May 25, 2021, in the course of an unrelated discussion, another representative of Party A asked Mr. Spero about Mr. Lurie’s feedback earlier in the week, and asked whether Party A should consider that feedback a formal response from the Momentive board of directors. Mr. Spero did not provide additional information in response.

On June 2, 2021, Mr. Lurie met with representatives of Party C to discuss Momentive’s business and industry. The representatives of Party C stated that Party C would be interested in participating in any process by Momentive to solicit interest in a potential acquisition transaction.

In June 2021, a representative of a financial sponsor, which we refer to as “Party D,” called members of Momentive management to discuss whether Momentive would be interested in pursuing an acquisition of an unrelated company. On June 18, 2021, Party D and Momentive entered into a confidentiality agreement with respect to these discussions.

On July 5, 2021, a representative of Party A called Mr. Lurie to re-affirm Party A’s interest in submitting a proposal to acquire Momentive.

On July 20, 2021, a representative of Party A called Mr. Lurie to discuss whether Momentive would be interested in pursuing an acquisition of an unrelated company. The representative of Party A and Mr. Lurie discussed this potential acquisition of an unrelated company again on July 22, 2021.

On July 22, 2021, in light of Party A’s continued interest in pursuing an acquisition of Momentive, Messrs. Lurie and Ebersman discussed the execution of Momentive’s business plan and growth strategy relative to strategic alternatives for Momentive. They concluded that the Momentive board of directors should consider an acquisition proposal from Party A to evaluate whether an acquisition at a compelling value, and not at an opportunistic price, could deliver more value to Momentive’s stockholders relative to continuing Momentive’s standalone business plan.

On July 23, 2021, Mr. Lurie spoke with a representative of Party A. During this conversation, Mr. Lurie stated that Momentive was willing to receive an acquisition proposal from Party A. Mr. Lurie expressed his personal view that the Momentive board of directors would be unlikely to pursue a transaction that did not have a compelling valuation relative to Momentive’s then-current stock price and to continuing to execute Momentive’s business plan as an independent entity. Mr. Lurie encouraged Party A not to submit an acquisition proposal unless the proposal was in the $30-plus per share range and Party A was committed to pursuing and completing the potential transaction. Following the call, Mr. Lurie updated Mr. Ebersman on his discussion with Party A. Over the 30 calendar days preceding the discussion on July 23, 2021, the volume weighted average price of Momentive common stock was $21.18 per share.

 

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On July 30, 2021, Mr. Lurie and a representative of Party A discussed Momentive’s business, and Mr. Lurie provided an update on Momentive’s business and organic and inorganic growth strategy. Mr. Lurie reiterated his personal view that Party A should not submit an acquisition proposal unless it was compelling and Party A was committed to the potential transaction, and indicated that he would not support an acquisition proposal at this time unless it approached the low- to mid-$30 per share range.

On August 9, 2021, Party A delivered to Mr. Lurie a non-binding written proposal to acquire Momentive in an all-cash transaction at a price per share of $30.00 to $33.00. The proposal was subject to Party A’s due diligence and did not indicate that relevant equity or debt financing commitments had been obtained.

On August 10, 2021, Mr. Lurie discussed Party A’s proposal with Messrs. Ebersman and Spero and Sue Decker, another Momentive director, as well as members of Momentive management and representatives of Wilson Sonsini Goodrich & Rosati, Professional Corporation, Momentive’s outside counsel, which is referred to as “Wilson Sonsini.” Messrs. Lurie and Ebersman and Ms. Decker agreed that a meeting of the Momentive board of directors would be called to discuss Party A’s proposal.

On August 12, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Wilson Sonsini in attendance. At the start of the meeting, Mr. Spero informed the Momentive board of directors that, given his professional relationship with Party A as a representative of an investor in certain funds managed by Party A, he would recuse himself from this meeting and other future meetings of the Momentive board of directors at which a potential transaction involving Momentive and Party A would be considered. The representatives of Wilson Sonsini reviewed with the Momentive board of directors relevant Delaware law matters, including the directors’ fiduciary duties in connection with a potential transaction. The Momentive board of directors discussed engaging a financial advisor to assist with the review of Momentive’s potential strategic alternatives and the possibility of initiating a formal process to solicit interest from strategic acquirors and financial sponsors that would likely be interested in pursuing a potential transaction involving Momentive. The Momentive board of directors discussed engaging Allen & Company and J.P. Morgan given, among other factors, their familiarity with Momentive and its business and industry given their past experience working with Momentive and others in Momentive’s industry, as well as their experience in similar situations. The Momentive board of directors established a strategic committee, which is referred to as the “Momentive strategic committee,” composed of Ms. Decker, Mr. Ebersman and Brad Smith, another Momentive director, to oversee the exploration and evaluation of potential strategic alternatives available to Momentive. The Momentive strategic committee was formed in the light of (1) the potentially significant workload that could be involved in evaluating potential strategic alternatives; (2) the possibility that Momentive management may need feedback and direction on relatively short notice; and (3) the benefits and convenience of having a subset of directors oversee and direct the process of considering potential strategic alternatives. The Momentive board of directors authorized and instructed the Momentive strategic committee, among other things, to (1) oversee and provide assistance to Momentive management and Momentive’s advisors with respect to the exploration, evaluation, consideration, review and negotiation of the terms and conditions of any potential strategic alternative, including a possible sale of Momentive; (2) take such other actions with respect to any strategic alternative as the Momentive strategic committee deemed necessary, appropriate or advisable; and (3) recommend to the Momentive board of directors the actions, if any, that should be taken by Momentive with respect to any such transaction. The Momentive board of directors retained the power and authority to approve the final decision on pursuing a strategic alternative, including a sale of Momentive. It was also understood that the Momentive board of directors would continue to have an active role in the consideration of potential strategic alternatives. The Momentive board of directors did not provide for the payment of any compensation to the members of the Momentive strategic committee in consideration of their service on the committee. The Momentive board of directors also delegated to the Momentive strategic committee the authority to engage, on behalf of Momentive, one or more financial advisors to assist in connection with these matters and to consider Allen & Company and J.P. Morgan for such purposes. Ms. Decker was subsequently designated by the Momentive strategic committee as its chair.

 

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On August 18, 2021, Mr. Lurie called a representative of Party A to convey that the Momentive board of directors had reviewed Party A’s proposal, and that the proposal merited further discussion and exploration. Mr. Lurie informed Party A that Momentive would require a proposal with a specific per share valuation, and would seek an improved valuation. The representatives of Party A responded that Party A could not increase the value of its proposal until it received additional due diligence information, including Momentive’s long-range plan.

Also on August 18, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Wilson Sonsini in attendance. Mr. Lurie provided an update on discussions with Party A. Members of Momentive management presented their preliminary long-range business plan for Momentive, including underlying assumptions and potential growth drivers and operating margin expectations for Momentive’s business. The Momentive board of directors discussed the preliminary long-range plan, including the achievability of the plan and the possibility of reducing costs and increasing operating margins to enhance stockholder value. The Momentive board of directors directed management to (1) review sensitivities for optimizing planned growth and operating margins for Momentive’s business with the objective of enhancing stockholder value; and (2) present an updated version of the long-range plan with revisions consistent with the outcome of this review and the discussion at the meeting.

On August 20, 2021, the Momentive strategic committee met, with members of Momentive management and representatives of Wilson Sonsini in attendance. Members of management presented a revised long-range plan for Momentive, including updates to the plan relative to the preliminary plan presented at the prior meeting of the Momentive board of directors based on the feedback of the Momentive directors. The Momentive strategic committee discussed the updates to the long-range plan with members of Momentive management, including the achievability of the updated plan and the impact on Momentive’s long-term performance and valuation, and members of management expressed their view that the updated plan optimized planned growth and operating margins for Momentive’s business with a view toward maximizing stockholder value with respect to these metrics. Following further discussion, the Momentive strategic committee approved sharing the long-range plan with Momentive’s financial advisors. Members of management then reviewed with the Momentive strategic committee the proposed terms of Allen & Company’s and J.P. Morgan’s respective engagements to serve as Momentive’s financial advisors. The Momentive strategic committee also discussed each of Allen & Company’s and J.P. Morgan’s experience, qualifications and familiarity with Momentive and its business and industry, their experience in similar situations, and the advantages of engaging two financial advisors, including the additional perspectives and potential counterparty contacts that each financial advisor could provide. The Momentive strategic committee also met in executive session, without members of management present, to discuss these matters. The Momentive strategic committee approved the engagement of Allen & Company and J.P. Morgan as Momentive’s financial advisors and directed Ms. Blum, together with representatives of Wilson Sonsini, to negotiate and finalize the terms of such engagements consistent with the discussion at the meeting.

On August 21, 2021, Mr. Lurie met with a representative of Party A to discuss Momentive’s business and growth strategy. Mr. Lurie reiterated that Momentive would seek an improved per share valuation from Party A. Following the meeting, Mr. Lurie updated Ms. Decker and Momentive’s financial advisors on his discussion with Party A.

On August 23, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors discussed various alternatives and considerations with respect to a potential outreach process to solicit interest regarding a transaction from other potential strategic acquirors and financial sponsors that Momentive might consider engaging with based on those parties’ likely or previously expressed interest in a potential transaction with Momentive, track record of transactions, ability to finance and consummate a transaction, and potential strategic rationale for a transaction with Momentive, including the potential for synergies with a potential acquiror’s business or portfolio companies. Also discussed were the potential risks of an outreach process, including potential public disclosure leaks, management and employee

 

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distraction, and adverse impacts on Momentive’s business, and the increase in the likelihood of those risks in a wider private or public process relative to a more targeted outreach. At the Momentive strategic committee’s request, Mr. Lurie provided his views on potential counterparties in light of these factors. The Momentive strategic committee also discussed continuing to provide Party A with due diligence information, and the potential timetable for an outreach to additional potential strategic acquirors and financial sponsors so that those additional counterparties would not be at an informational or timing disadvantage relative to Party A. The Momentive strategic committee also met in executive session, without management or financial advisors in attendance, to continue to discuss these matters. The Momentive strategic committee determined, in light of Party A’s acquisition proposal, to continue providing Party A with due diligence information, and also to recommend to the Momentive board of directors the commencement of a targeted outreach process to solicit additional proposals with respect to a transaction. The Momentive strategic committee directed Momentive’s financial advisors to provide a preliminary financial overview of Momentive, based on Momentive’s long-range plan, at the next meeting of the Momentive board of directors. The Momentive strategic committee determined that Mr. Lurie should have additional discussions with Party A about its proposal. Mr. Lurie had confirmed that he had not had discussions regarding any “rollover” of equity by Mr. Lurie or Mr. Lurie’s role with Momentive following an acquisition, and the Momentive strategic committee directed that Mr. Lurie should not have discussions regarding such matters.

On August 25, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Members of Momentive management reviewed Momentive’s long-range plan, as extrapolated per Momentive management for fiscal years 2026 through 2031. The Momentive strategic committee also met in executive session, without financial advisors in attendance, to discuss the achievability of the long-range plan. The Momentive strategic committee reaffirmed its determination to recommend to the Momentive board of directors the commencement of a targeted outreach process to solicit additional proposals with respect to a potential transaction.

Also on August 25, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Ms. Decker provided the Momentive strategic committee’s recommendation to conduct a targeted outreach to solicit additional potential transaction proposals. Members of Momentive management presented Momentive’s long-range plan, including updates to the plan relative to the preliminary plan presented at the prior meeting of the Momentive board of directors. Momentive’s financial advisors reviewed financial aspects of Party A’s proposal, a preliminary financial overview of Momentive and certain market perspectives on Momentive based on the long-range plan. Momentive’s financial advisors also discussed various alternatives and considerations with respect to a potential outreach process, strategic acquirors and financial sponsors that Momentive might consider contacting based on those parties’ likely or previously expressed interest in a potential strategic transaction with Momentive, track record of transactions, ability to finance and consummate a transaction, and potential strategic rationale for a transaction with Momentive, including the potential for synergies with a potential acquiror’s business or portfolio companies. Representatives of Wilson Sonsini reviewed relevant Delaware law matters, including the directors’ fiduciary duties in connection with a potential outreach process. The Momentive board of directors also discussed the potential risks of an outreach, including potential public disclosure leaks, management and employee distraction, and adverse impacts on Momentive’s business, and the increase in the likelihood of those risks in a wider private or public process relative to a more targeted outreach. The Momentive board of directors also met in executive session, without management or financial advisors in attendance, to continue to discuss these matters. The Momentive board of directors discussed whether, in light of Momentive’s valuation, trading performance and prospects, likely counterparty interest, and Party A’s proposal, it was the right time to explore a potential strategic transaction, and whether an outreach process was in the best interests of Momentive and its stockholders relative to Party A’s proposal or continuing to execute Momentive’s long-range plan as an independent entity. The Momentive board of directors directed the Momentive strategic committee to proceed with an outreach to selected potential strategic acquirors and financial sponsors identified by the Momentive strategic committee to solicit additional proposals with respect to a potential transaction. The Momentive board

 

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of directors also authorized providing Party A and other potentially interested counterparties with due diligence information regarding Momentive in connection with this process.

On August 27, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. The Momentive strategic committee discussed process considerations and counterparties with which to engage in an outreach process to solicit transaction proposals based on the factors and risks discussed at the prior meetings, including the individuals best positioned, among the Momentive directors, members of management and financial advisors, to initiate discussions with each counterparty. The Momentive strategic committee authorized Momentive’s financial advisors and members of management to contact seven potential strategic acquirors (including Zendesk) and four potential financial sponsors (including Party A) regarding a potential transaction, and authorized management to present to interested potential counterparties an overview of Momentive’s business and provide other relevant due diligence information, including Momentive’s long-range plan. The Momentive strategic committee determined not to engage at that time with other potential strategic acquirors and financial sponsors (including Party B, Party C and Party D, and two potential strategic acquirors, which we refer to as “Party E” and “Party F”) based on concerns regarding the impact on Momentive’s competitive positioning that might arise from sharing Momentive’s confidential information with these counterparties and/or the Momentive strategic committee’s belief that these counterparties would not be able to proceed with or consummate a strategic transaction involving Momentive at that time. It was the Momentive strategic committee’s expectation that strategic acquirors that might present competitive sensitivities could be introduced later in the process without being at a significant timing and informational disadvantages given their familiarity with Momentive’s business and industry. The Momentive strategic committee authorized entering into confidentiality agreements with potentially interested counterparties as part of this process, and directed that these confidentiality agreements include “standstill” provisions that restricted the counterparties from making public proposals with respect to the acquisition of Momentive without Momentive’s prior consent. The Momentive strategic committee also discussed the timetable for the outreach and process, including the date on which Momentive would request that proposals be submitted and strategic and timing considerations to avoid having the other potential counterparties be at an informational or timing disadvantage relative to Party A.

Between August 27, 2021 and August 31, 2021, in accordance with the directives of the Momentive strategic committee, representatives of Momentive’s financial advisors and members of Momentive management commenced their outreach to the ten potential counterparties, including Zendesk, in addition to Party A. Ultimately, seven of the ten additional potential counterparties entered into a confidentiality agreement with Momentive, including Zendesk, which entered into a non-disclosure agreement with Momentive on September 6, 2021. Three of the ten additional potential counterparties declined to engage in discussions or due diligence with respect to a potential transaction involving Momentive and did not enter into a confidentiality agreement with Momentive. Of the seven additional potential counterparties that entered into a confidentiality agreement, six included “standstill” provisions restricting the counterparties from making public proposals with respect to the acquisition of Momentive without Momentive’s prior consent (but not restricting confidential proposals to the Momentive board of directors), which restrictions would terminate upon the occurrence of, among other things, Momentive’s execution of a definitive agreement with a third party to acquire more than 50% of Momentive’s outstanding voting securities. Momentive and Party A separately executed a restated confidentiality agreement that included similar “standstill” provisions. All of the confidentiality agreements Momentive entered into with interested counterparties during the course of the process also restricted the counterparty’s ability to engage with equity or debt financing sources regarding a potential transaction without Momentive’s prior consent.

On August 30, 2021, a representative of Party D called Mr. Lurie on an unsolicited basis to express Party D’s interest in an acquisition of Momentive. Mr. Lurie referred Party D to representatives of J.P. Morgan. Representatives of Party D and J.P. Morgan discussed Party D’s interest and representatives of J.P. Morgan thereafter updated the members of the Momentive strategic committee on Party D’s outreach.

Between September 1, 2021 and September 13, 2021, following the execution of the applicable confidentiality agreement, members of Momentive management, together with representatives of Momentive’s financial

 

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advisors, met with representatives of nine interested counterparties (including Zendesk, Party A, and Party D) to provide an overview of Momentive’s business and operational and financial due diligence information, including Momentive’s long-range plan.

As described below, during September 2021, there were unsolicited inquiries to and additional outreach by Momentive. By mid-October 2021, 14 potential counterparties had entered into confidentiality agreements, consisting of eight financial sponsors and six strategic acquirors (including Zendesk). Each confidentiality agreement subsequently entered into with interested counterparties during the course of the process also included similar “standstill” provisions.

On September 3, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management, and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors and members of Momentive management provided an update on discussions with potential counterparties, as well as planned management meetings. Representatives of J.P. Morgan also discussed Party D’s unsolicited outreach, and the Momentive strategic committee authorized entering into a confidentiality agreement with Party D and providing Party D with a management presentation and due diligence information regarding Momentive. The Momentive strategic committee also met in executive session, without management or financial advisors in attendance, to discuss strategic and process considerations, including strategies for maximizing the valuation of potential transaction proposals, and whether to engage with additional potential counterparties at that time based on the factors considered at the prior meeting of the Momentive strategic committee. The Momentive strategic committee also discussed the next steps in the outreach process, and determined (1) to continue with the outreach process and request that preliminary proposals from interested counterparties be submitted during the week of September 27, 2021 and (2) not to solicit interest from additional potential counterparties at that time.

Also on September 3, 2021, Party D entered into a confidentiality agreement with Momentive.

Beginning on September 7, 2021, Momentive provided potential counterparties with access to a virtual data room to share operational and financial due diligence information regarding Momentive.

On September 8, 2021, a representative of Party B called Mr. Lurie on an unsolicited basis to express Party B’s interest in an acquisition of Momentive, including the possibility of combining Momentive with one of Party B’s portfolio companies. Mr. Lurie updated the members of the Momentive strategic committee on Party B’s outreach.

On September 10, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors and members of Momentive management provided an update on the outreach process, including Party B’s outreach and that certain counterparties had declined to proceed with discussions regarding a potential transaction with Momentive. In light of Party B’s unsolicited outreach and continued interest, the Momentive strategic committee authorized entering into a confidentiality agreement with Party B and providing Party B with a management presentation and due diligence information regarding Momentive. The Momentive strategic committee also met in executive session, without management or financial advisors in attendance, to discuss strategic considerations and related matters.

Throughout the remainder of September 2021, in accordance with the directives of the Momentive strategic committee, members of Momentive management, together with representatives of Momentive’s financial advisors, engaged in follow-up discussions and meetings at the request of Zendesk and the other remaining counterparties regarding Momentive’s business, including Momentive’s long-range plan, financial and operational condition, products and go-to-market strategy. From time to time during this period, Mr. Lurie met with representatives of several counterparties (including Mikkel Svane, chief executive officer of Zendesk, other representatives of Zendesk, and representatives of Party A, Party B and Party D) regarding their interest in a

 

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transaction with Momentive, and Mr. Lurie regularly updated the members of the Momentive strategic committee on these meetings.

On September 14, 2021, Party B entered into a confidentiality agreement with Momentive.

On September 15, 2021 and on September 17, 2021, in accordance with the directives of the Momentive strategic committee, members of Momentive management, together with representatives of Momentive’s financial advisors, met with representatives of Party B to provide an overview of Momentive’s business.

Also on September 17, 2021, at a meeting of the Zendesk transaction committee (as defined below) at which members of the Zendesk management team and a representative of Hogan Lovells US LLP, which is referred to as “Hogan Lovells,” were present, members of the Zendesk management team reviewed and discussed with the Zendesk transaction committee a potential strategic transaction with Momentive, including the strategic rationale for the potential transaction, certain growth forecast considerations, potential deal structures, valuation considerations, regulatory-related matters and the possible timeline for the potential transaction. Following discussion, the Zendesk transaction committee authorized the Zendesk management team to continue discussions with Momentive regarding a potential strategic transaction.

Also on September 17, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors and members of Momentive management provided an update on discussions with the potential transaction counterparties, noting that a transaction proposal was expected from Zendesk that would include significant stock consideration, and discussed with the Momentive strategic committee the need to conduct reverse due diligence on Zendesk and understand potential synergies of the combined company to properly evaluate the proposal. Momentive’s financial advisors also noted that certain financial sponsors, with Momentive’s prior approval, were coordinating or partnering with equity financing sources, including institutional investors and other financial sponsors, to obtain sufficient equity financing commitments to consummate a potential transaction. In this context, Mr. Lurie noted that Party A had inquired about the potential interest of directors in “rolling over” their equity in connection with an acquisition. The Momentive strategic committee directed members of management and Momentive’s financial advisors to inform Party A that any transaction proposal should not assume any “rollover” of existing stockholder equity, and reiterated that Momentive’s directors and management should not engage in discussions regarding a “rollover” of equity with potential counterparties at that time. The Momentive strategic committee also discussed whether to contact additional potential strategic acquirors (including Party E and Party F) that, until this time, had not been included in the process, and provide them with more limited operational due diligence information to help mitigate competitive sensitivities. Following discussion regarding strategic and timing considerations, the Momentive strategic committee directed Mr. Lurie to engage with Party E to solicit interest in a potential transaction involving Momentive. The Momentive strategic committee also met in executive session, without management or financial advisors in attendance, to discuss these matters.

On September 21, 2021, Mr. Lurie called representatives of Party E to discuss Momentive’s business and the possibility of a strategic transaction between Party E and Momentive.

Also on September 21, 2021, a representative of a financial sponsor, which we refer to as “Party G,” called representatives of J.P. Morgan on an unsolicited basis to express Party G’s interest in an acquisition of Momentive.

Also on September 21, 2021, members of Momentive management participated in functional due diligence meetings with members of Zendesk management to discuss business, financial, operational and legal matters. Representatives of Momentive’s financial advisors and Goldman Sachs also attended these meetings.

On September 22, 2021, members of Zendesk management, together with representatives of Goldman Sachs, met with Momentive management and representatives of Momentive’s financial advisors to discuss Momentive’s financial and operational condition.

 

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On September 24, 2021, Party E entered into a confidentiality agreement with Momentive.

Also on September 24, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors and members of Momentive management provided an update on discussions with the potential transaction counterparties, including Party G’s outreach. Of the eight potential strategic acquirors and the six potential financial sponsors (not including Party G) contacted, six potential strategic acquirors and two potential financial sponsors had declined to proceed with further discussions regarding a potential strategic transaction. The Momentive strategic committee discussed with Momentive’s financial advisors’ expectations regarding transaction proposals that might be submitted from the remaining interested counterparties on or after September 27, 2021 and each counterparty’s ability to consummate a transaction, including the expectation that a potential transaction proposal from Zendesk would include significant stock consideration and that financial sponsors continued their efforts to coordinate or partner with equity financing sources. The Momentive strategic committee discussed whether to contact additional potential counterparties (including Party C, Party F and Party G), but declined to do so at this time based on the Momentive strategic committee’s belief that such counterparties would not be in a position to proceed with or consummate a strategic transaction with Momentive. Mr. Lurie also updated the Momentive strategic committee on upcoming meetings with representatives of the remaining potential counterparties, including Zendesk and Party A. The Momentive strategic committee also met in executive session, without management or financial advisors in attendance, to discuss these matters.

On September 27, 2021, a representative of Party F called Mr. Lurie on an unsolicited basis to express Party F’s interest in a strategic transaction with Momentive. Mr. Lurie updated the members of the Momentive strategic committee on Party F’s outreach, and the Momentive strategic committee approved engaging with Party F.

Also on September 27, 2021, Party A delivered a non-binding written proposal to acquire Momentive in an all-cash transaction at a price per share of $26.00. The proposal indicated that Party A had received sufficient non-binding equity financing commitments from an institutional investor to consummate the acquisition, and would seek debt financing commitments in connection with the execution of a transaction.

Also on September 27, 2021, Party D delivered a non-binding written proposal to acquire Momentive in an all-cash transaction at a price per share of $26.00. The proposal noted that Party D had not, at that time, coordinated sufficient equity financing to consummate a transaction, but requested the opportunity to partner with another equity source in the next phase of the process, and would seek debt financing commitments at the appropriate time.

On September 28, 2021, Party F entered into a confidentiality agreement with Momentive.

Also on September 28, 2021, in accordance with the directives of Momentive’s strategic committee, members of Momentive management, together with representatives of Momentive’s financial advisors, met with representatives of Party F to provide an overview of Momentive’s business.

On September 28, 2021, at a special meeting of the Zendesk board of directors at which members of the Zendesk management team and representatives of Goldman Sachs, whom the Zendesk management team preliminarily had requested advise Zendesk in connection with its evaluation of certain strategic alternatives, and Hogan Lovells were present, members of the Zendesk management team reviewed and discussed with the Zendesk board of directors a potential strategic transaction with Momentive, including the strategic rationale for the potential transaction, key due diligence findings to date, certain prospective financial information for Momentive and the potential for synergy opportunities that may be achievable through the potential strategic transaction. Representatives of Goldman Sachs reviewed preliminary bid considerations and certain deal structure considerations. Following discussion, the Zendesk board of directors established a transaction committee, which is referred to as the “Zendesk transaction committee,” comprised of Carl Bass, Hilarie Koplow-McAdams and

 

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Thomas Szkutak to, among other things, evaluate a potential strategic transaction with Momentive, approve the submission to Momentive of non-binding expressions of interest with respect to a potential strategic transaction involving Momentive and approve the engagement of a financial advisor to assist Zendesk with a potential strategic transaction involving Momentive. The Zendesk board of directors also ratified the September 17, 2021 meeting of such directors as a meeting of the Zendesk transaction committee and authorized the Zendesk management team to submit a non-binding proposal to purchase all outstanding shares of Momentive common stock at a price of $24.00 to $26.00 per share, to be paid in shares of Zendesk common stock.

Later on September 28, 2021, Zendesk delivered a non-binding written proposal to acquire Momentive at a price per share of $24.00 to $26.00, to be paid entirely in shares of Zendesk common stock based on a mutually agreed fixed exchange ratio.

Later on September 28, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors reviewed the transaction proposals received from Party A, Party D and Zendesk, and provided an update on discussions with such parties regarding their proposals and with other potential counterparties. Representatives of J.P. Morgan noted (1) that Party A had indicated its belief that, after reviewing Momentive’s operational and financial due diligence information, its proposal reflected an appropriate valuation for Momentive and that Party A had not expressed an ability to increase the value of its proposal; (2) Party D had indicated that it could potentially increase the value of its proposal with additional due diligence information regarding Momentive, but would need to partner with additional sources of equity financing; and (3) Momentive would need to conduct reverse due diligence and understand potential synergies of the combined company to properly evaluate Zendesk’s proposal. Representatives of J.P. Morgan also updated the Momentive strategic committee on their discussions with representatives of Party B, which previously had stated that it would be in a position to submit a proposal to acquire Momentive in an all-cash transaction at a value per share in the mid-$20s, and that J.P. Morgan had in response encouraged Party B to submit a written proposal. Party B did not submit a written proposal with respect to a transaction. Momentive’s financial advisors also noted that Party E and Party F, which were still conducting management meetings and due diligence and that no other counterparties had indicated that they were actively considering submitting a transaction proposal. The Momentive strategic committee discussed the proposals relative to Momentive’s standalone and future prospects, and also discussed strategic and timing considerations for negotiating increased valuations from Party A, Party D and Zendesk and maximizing the valuation of potential proposals from Party E and Party F. Following discussion, the Momentive strategic committee directed Momentive’s financial advisors to (1) inform Party A that its proposal was insufficient; (2) request from Party D an improved proposal by October 8, 2021, and provide Party D with additional due diligence information; (3) inform Zendesk that its proposal was insufficient, but request reverse due diligence and information on expected synergies of the combined company to better evaluate Zendesk’s all-stock proposal while continuing to seek an improved proposal from Zendesk; and (4) request that Party E and Party F submit potential transaction proposals by October 8, 2021.

From September 29, 2021 through October 14, 2021, members of Momentive management, together with representatives of Momentive’s financial advisors, continued to engage in follow-up discussions regarding Momentive’s business with Zendesk and the other remaining counterparties.

On September 29, 2021, representatives of a financial sponsor, which we refer to as “Party H,” contacted Mr. Lurie and representatives of an additional financial sponsor, which we refer to as “Party I,” contacted representatives of J.P. Morgan separately on an unsolicited basis to each express their respective interest in an acquisition of Momentive. Party I did not ultimately enter into a confidentiality agreement with Momentive.

Also on September 29, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Members of the Momentive strategic committee and representatives of Momentive’s financial advisors reviewed the process to solicit transaction proposals conducted by Momentive to date, including the proposals received, and ongoing

 

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discussions with, each of the remaining counterparties. The Momentive board of directors discussed strategic and timing considerations for maximizing the valuation of transaction proposals, and concurred with the responses outlined by the Momentive strategic committee. The Momentive board of directors also authorized entering into a confidentiality agreement with each of Party H and Party I and providing each of them with due diligence information regarding Momentive. The Momentive board of directors also met in executive session, without management or financial advisors in attendance, to discuss these matters. Following the meeting, representatives of Momentive’s financial advisors and Mr. Lurie responded to Party A, Party D and Zendesk as directed by the Momentive strategic committee.

On September 30, 2021, in accordance with the directives of the Momentive strategic committee, members of Momentive management, together with representatives of Momentive’s financial advisors, met with representatives of Party E to provide an overview of Momentive’s business.

On October 5, 2021, members of Zendesk management, together with representatives of Goldman Sachs, met with Momentive management and representatives of Momentive’s financial advisors to discuss Zendesk’s perspectives on the combined company’s operational and growth strategy and potential areas of synergies for the combined company.

Later on October 5, 2021, Mr. Svane and Mr. Lurie discussed the possibility of Mr. Svane making a presentation to Momentive’s board of directors regarding Zendesk’s business and growth strategy, Zendesk’s proposal to acquire Momentive and the strategic rationale for a combination of Zendesk and Momentive.

On October 6, 2021, Bloomberg and other media outlets published reports that Legion Partners Asset Management, a Momentive stockholder, was calling for Momentive to conduct a strategic review, including to consider a potential sale of Momentive.

On October 7, 2021, Bloomberg published a report that Momentive was exploring options, including a potential sale after receiving takeover interest. Over the 30 calendar days preceding the publication of the reports on October 6, 2021, the volume weighted average price of Momentive common stock was $19.55 per share.

Also on October 7, 2021, Party H entered into a confidentiality agreement with Momentive.

Also on October 7, 2021, representatives of Party F communicated to representatives of J.P. Morgan that Party F would not be moving forward with a potential acquisition of Momentive.

Also on October 7, 2021, Mr. Svane and Mr. Lurie discussed Zendesk’s acquisition proposal, including the strategic rationale for the proposed transaction.

On October 8, 2021, members of Zendesk management, together with representatives of Goldman Sachs, met with Momentive management and representatives of Momentive’s financial advisors to present an overview of Zendesk’s business.

Also on October 8, 2021, representatives of Party E communicated to representatives of J.P. Morgan that Party E would not be moving forward with a potential acquisition of Momentive.

Also on October 8, 2021, representatives of Party A discussed Party A’s acquisition proposal with representatives of J.P. Morgan. During this conversation, the representatives of Party A stated that Party A could be in a position to increase its acquisition proposal to “$27 plus” per share.

Also on October 8, 2021, representatives of Party D discussed Party D’s acquisition proposal with representatives of J.P. Morgan. During this conversation, the representatives of Party D indicated that Party D could potentially increase the value of its proposal, subject to further due diligence and obtaining sufficient commitments from

 

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third party equity financing sources to consummate the transaction. Party D also requested approval to partner with Party C in a potential acquisition. J.P. Morgan updated the members of the Momentive strategic committee on Party D’s request to partner with Party C, and the Momentive strategic committee approved that request.

Also on October 8 and on October 9, 2021, members of the Zendesk management team and the Zendesk transaction committee discussed the submission of a revised proposal to acquire Momentive in an all-stock transaction. Following such discussions, the Zendesk transaction committee authorized the Zendesk management team to submit one or more proposals to purchase all outstanding shares of Momentive common stock at a price of up to $28.00 per share, to be paid in shares of Zendesk common stock.

Also on October 9, 2021, Party C entered into a confidentiality agreement with Momentive, and Momentive began providing Party C due diligence information regarding Momentive.

On October 10, 2021, Zendesk submitted a revised non-binding written proposal to acquire Momentive at a price per share of $27.00, to be paid entirely in shares of Zendesk common stock based on a mutually agreed fixed exchange ratio. The revised proposal also included a draft exclusivity agreement, which provided that Momentive would negotiate exclusively with Zendesk until the later of (1) October 28, 2021 and (2) the fifth business day after Momentive provided written notice to Zendesk of the termination of the exclusivity agreement.

On October 11, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors provided an update on the proposal received from Zendesk, including Zendesk’s request for exclusivity, and the discussions with the remaining potential counterparties. Momentive’s financial advisors also noted that Party E and Party F had declined to submit transaction proposals. Momentive’s financial advisors provided a market and trading overview of Zendesk, and the Momentive board of directors discussed the need to continue to analyze the synergies of a potential combination of Zendesk and Momentive to better evaluate Zendesk’s transaction proposal. Mr. Svane was then invited to join the meeting to provide an overview of Zendesk’s business and growth strategy, and the Momentive board of directors discussed with Mr. Svane the strategic rationale of a combination of Zendesk and Momentive. After Mr. Svane left the meeting, the Momentive board of directors discussed strategic considerations for further negotiating acquisition proposals from Party A, Party D and Zendesk. Following discussion, the Momentive board of directors approved continuing to engage with Zendesk and analyzing the synergies of a potential combination, but determined not to enter into exclusive negotiations with Zendesk at this time. The Momentive board of directors also met in executive session, without management or financial advisors in attendance, to discuss these matters.

On October 12, 2021, Party A submitted a revised non-binding written proposal to acquire Momentive in an all-cash transaction at a price per share of $27.00 in cash, noting that Party A had not completed commercial due diligence.

Also on October 12, 2021, in a discussion between Mr. Svane and Mr. Lurie, Mr. Svane indicated that Zendesk could increase its proposal to acquire Momentive to $28.00 per share, noting that Zendesk had made substantial progress on, but had not completed, business due diligence.

On October 13, 2021, representatives of Party D indicated in a call with J.P. Morgan that Party D could potentially increase the value of its proposal, subject to further due diligence.

Also on October 13, 2021, the Momentive strategic committee met, with other Momentive directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Momentive’s financial advisors provided an update on the proposals received from Party A and Zendesk and J.P. Morgan provided an update on its discussions with Party D. The Momentive strategic committee discussed the expected timing and valuation of an eventual proposal by Party D. Members of Momentive management also

 

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provided their preliminary perspectives on potential synergies of a combination of Zendesk and Momentive, based on ongoing discussions with Zendesk management, including the potential for significant go-to-market, product, packaging and revenue synergies; and Momentive’s financial advisors reviewed potential financial and trading considerations for the combined company. The Momentive strategic committee discussed Zendesk’s proposal and the potential upside and risks for Momentive stockholders in receiving consideration in the form of stock in the combined company relative to (1) Party A’s proposal and the possibility of an improved proposal from Party D and (2) continuing to execute Momentive’s long-range plan as an independent entity. The Momentive strategic committee also discussed strategic and valuation considerations with respect to setting the exchange ratio in a potential combination with Zendesk based on the price of Zendesk’s common stock as of the date of the proposal versus as of the execution of definitive acquisition agreements, including based on Momentive management’s due diligence of Zendesk’s business and prospects and the fact that Zendesk management had communicated to Momentive that it expected to announce Q3 2021 earnings generally consistent with consensus market estimates and increase its earnings guidance for Q4 2021. Mr. Lurie noted for the Momentive strategic committee that, as directed, he had not had discussions with Zendesk regarding his potential management role or compensation with the combined company. Following discussion, the Momentive strategic committee (1) directed Momentive’s financial advisors to discuss further the methodology for setting the exchange ratio; (2) directed J.P. Morgan to request a “best and final” proposal from Party A, Party C and Party D; and (3) in the event that final proposals were generally consistent with the prior discussions with each relevant counterparty, determined to recommend to the Momentive board of directors that Momentive enter into exclusive negotiations with Zendesk with respect to its transaction proposal. The Momentive board of directors also met in executive session, without management or financial advisors in attendance, to discuss these matters.

On October 14, 2021, Mr. Lurie and representatives of Momentive’s financial advisors met with Zendesk management and representatives of Goldman Sachs to discuss Zendesk’s proposal and the methodology for setting the exchange ratio, including the relevant period for calculating the volume weighted average price of Zendesk common stock to use for determining the exchange ratio. Representatives of Zendesk orally indicated its final proposal to acquire Momentive at a price per share of $28.00, to be paid entirely in shares of Zendesk common stock, with a fixed exchange ratio to be set based on the 15-trading day volume weighted average price of Zendesk’s common stock, ending two trading days prior to signing of a definitive merger agreement, and also indicated that Zendesk’s proposal was predicated on Momentive agreeing to negotiate with Zendesk on an exclusive basis. Representatives of Zendesk also noted that exclusivity would be necessary to negotiate a definitive merger agreement and announce the transaction by October 28, 2021, prior to the announcement of Zendesk’s third quarter earnings, and that failure to meet this timeline could jeopardize the parties’ ability to finalize a definitive merger agreement in a timely fashion.

Also on October 14, 2021, at a meeting of the Zendesk transaction committee at which members of the Zendesk management team and representatives of Goldman Sachs and Hogan Lovells were present, members of the Zendesk management team provided an update on the negotiations with Momentive, including that the parties discussed that Zendesk’s proposal to acquire Momentive would use a 15-trading day volume weighted average price of Zendesk common stock, ending two trading days prior to signing of a definitive merger agreement, to determine the exchange ratio in respect of the $28.00 per share price for Momentive common stock. The Zendesk management team also provided an update on the status of the due diligence process and discussed the expectation that Momentive would execute an exclusivity agreement with Zendesk later that day. The Zendesk management team then reviewed and discussed with the Zendesk transaction committee potential synergies that may be achievable through a potential strategic transaction with Momentive, including, among other things, potential revenue synergies and potential operational scale efficiencies. Following discussion, the Zendesk transaction committee authorized the Zendesk management team to continue discussions with Momentive regarding a potential strategic transaction subject to final approval of any such transaction by the Zendesk board of directors.

Also on October 14, 2021, as directed by the Momentive strategic committee, representatives of J.P. Morgan called representatives of Party A to discuss Party A’s proposal. During this discussion, the representatives of

 

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Party A orally indicated its final proposal to acquire Momentive for $27.25 per share in cash. Party A did not submit a written proposal reflecting that price.

Also on October 14, 2021, as directed by the Momentive strategic committee, representatives of J.P. Morgan called representatives of Party C and Party D to discuss their proposal, who indicated that they would need to conduct further due diligence. Party D did not submit a revised written proposal beyond the proposal initially submitted on September 27, 2021, either alone or with Party C.

Also on October 14, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Members of the Momentive strategic committee and Momentive’s financial advisors reviewed the process to solicit proposals conducted by Momentive to date, in which Momentive with the assistance of its financial advisors had engaged in discussions with 18 potential counterparties, consisting of nine potential strategic acquirors and nine financial sponsors, 14 of which had entered into confidentiality agreements with Momentive and conducted due diligence and three of which had submitted acquisition proposals at that time. Momentive’s financial advisors provided an update on the proposals received from Party A and Zendesk (including that Momentive was expecting a revised written proposal from Zendesk to acquire Momentive at a price per share of $28.00 in stock consideration with a fixed exchange ratio to be set based on the trailing 15-trading day volume weighted average price of Zendesk common stock, with the calculation period ending two days prior to the signing of a definitive merger agreement) and J.P. Morgan provided an update on its discussions with Party C and Party D. The Momentive strategic committee discussed the expected timing and valuation of a proposal by Party D, noting that the possibility of receiving an improved proposal from Party D (whether in partnership with Party C or not) would be subject to continued due diligence and commitments from Party C or other equity financing sources that had not yet been secured. Members of Momentive management also reviewed the potential synergies of a combination of Zendesk and Momentive, based on ongoing discussions with Zendesk management, including the potential for significant go-to-market, product, packaging and revenue synergies. Momentive’s financial advisors reviewed financial matters relating to, and certain trading perspectives on, Momentive and the potential combined company, including Momentive’s and Zendesk’s respective long-range plans and the potential synergies expected by the management teams of Momentive and Zendesk to result from the combination. The Momentive board of directors discussed the potential upside for Momentive stockholders in receiving consideration in the form of stock in the combined company and from owning a significant stake in the equity of the combined company (based on, among other things, (1) the Momentive board of directors’ belief that Zendesk common stock may be undervalued, (2) the expected synergies of the combination, (3) the expected size, business diversification and growth rate of the combined business, (4) the potential trading multiple of the combined company relative to each of Momentive and Zendesk on a standalone basis and (5) the opportunity for Momentive stockholders, as stockholders of the combined company, to obtain another premium if and when the combined company were to undertake a sale of control). The Momentive board also discussed the potential risks to receiving consideration in the form of a fixed exchange ratio of stock in the combined company, including that the value of the merger consideration could decrease. This was contrasted with (1) Party A’s cash proposal, including the uncertainty that Party A would execute an acquisition at the proposed value in light of its track record of negotiations with Momentive and the remaining due diligence and financing contingencies indicated in its proposal; (2) the uncertainty of receiving an improved proposal from Party D (whether in partnership with Party C or not); and (3) continuing to execute Momentive’s long-range plan as an independent entity. Representatives of Wilson Sonsini reviewed with the members of the Momentive board of directors relevant Delaware law matters, including the directors’ fiduciary duties in connection with these matters. The Momentive strategic committee delivered its recommendation that Momentive enter into exclusive negotiations with Zendesk. Following discussion, the Momentive board of directors authorized Momentive entering into exclusive negotiations with Zendesk following receipt of the expected revised written proposal.

Later on October 14, 2021, Zendesk submitted a revised “best and final” non-binding written proposal to acquire Momentive at a price per share of $28.00, to be paid entirely in shares of Zendesk common stock based on a fixed exchange ratio to be set using an unaffected trailing 15-day volume weighted average price of Zendesk

 

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common stock, with the calculation period ending two days prior to the signing of a definitive merger agreement. Zendesk’s proposal was conditioned on Momentive agreeing to work with Zendesk on an exclusive basis.

On October 15, 2021, representatives of Party H indicated to Mr. Lurie that it could not lead a potential acquisition of Momentive, but that it might be in a position to partner with another financial sponsor to pursue a potential transaction.

Also On October 15, 2021, Zendesk submitted a revised written version of its proposal clarifying that the fixed exchange ratio would be set using an unaffected trailing 15 “trading” day volume weighted average price of Zendesk common stock, but with no other changes.

Also on October 15, 2021, following negotiation of the terms, Momentive and Zendesk entered into an exclusivity agreement in which Momentive agreed to negotiate exclusively with Zendesk until the later of (1) October 28, 2021 and (2) the second day after Momentive provided written notice to Zendesk of the termination of the exclusivity agreement.

Beginning on October 15, 2021, representatives of Zendesk and its advisors, including Hogan Lovells, were granted access to additional legal and operational due diligence documents and information regarding Momentive in its electronic data room to support their continued due diligence review of Momentive. Over the following two weeks, members of Zendesk management and its advisors conducted operational, legal, financial, accounting, employment and other due diligence on Momentive, including reviews of Momentive’s commercial relationships, intellectual property, privacy, security, equity awards, employment arrangements and employee benefit plans and compliance and regulatory matters, and from time to time had discussions with members of Momentive management and its advisors regarding due diligence information, potential synergies, employee retention and related matters. Momentive conducted reverse due diligence on Zendesk, including with respect to Zendesk’s long-term plan and potential synergies that could result from the combination.

On October 18, 2021, at a meeting of the Zendesk transaction committee at which members of the Zendesk management team and representatives of Goldman Sachs and Hogan Lovells were present, members of the Zendesk management team reviewed and discussed, among other things, the potential synergies that may be achievable through a potential strategic transaction with Momentive as well as the primary drivers for those potential synergies. Representatives of Goldman Sachs reviewed and discussed certain precedent transactions in the technology sector and discussed the agreed upon measurement period that would be used to determine the exchange ratio, noting that the Momentive stockholders’ ownership of the combined company would depend on how Zendesk common stock trades prior to the signing of a definitive merger agreement.

On October 19, 2021, representatives of Hogan Lovells sent a draft of the merger agreement to representatives of Wilson Sonsini. Over the subsequent nine days, representatives of Momentive and Zendesk and their respective legal advisors negotiated the terms of the merger agreement. Key terms of the merger agreement negotiated between the parties included (1) whether, and the circumstances in which, each party’s board of directors could change its recommendation to its stockholders or negotiate or accept an alternative acquisition transaction, including the circumstances in which the merger agreement could be terminated; (2) the amount of the termination fee payable by each party and the circumstances in which it would be payable; (3) the definition of “material adverse effect” with respect to each party; (4) the conditions to each party’s obligation to, and the parties’ commitments in connection with, obtaining required regulatory approvals and other closing conditions; (5) the treatment of Momentive equity awards and Momentive’s 2018 Employee Stock Purchase Plan in the merger; and (6) the interim operating covenants applicable to Momentive prior to the closing of the merger and related exceptions for matters such as capital expenditures and employee retention matters.

On October 20, 2021, at a meeting of the Zendesk transaction committee at which members of the Zendesk management team were present, members of the Zendesk management team reviewed the Zendesk standalone projections with the Zendesk transaction committee and discussed the status of negotiations and discussions with

 

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Momentive. Following discussion, the Zendesk transaction committee authorized the Zendesk management team to share the Zendesk standalone projections with Goldman Sachs and Momentive.

On October 21, 2021, representatives of Hogan Lovells sent a draft voting agreement to representatives of Wilson Sonsini. Over the following seven days, representatives of Momentive, Zendesk, the stockholders requested to be party to a voting agreement and respective advisors negotiated the terms of the voting agreement. Key terms of the voting agreement negotiated between the parties included (1) the circumstances in which the voting agreement would terminate; (2) the obligations of stockholder parties to the voting agreements to vote with respect to the merger if the Momentive board of directors changed its recommendation to Momentive’s stockholders; and (3) the restrictions on such stockholder parties’ transfer of Momentive common stock and other obligations and agreements under the voting agreement.

On October 22, 2021, the Momentive strategic committee met, with other members of Momentive board of directors, members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Members of Momentive management and Momentive’s financial advisors provided an update on Zendesk’s and Momentive’s due diligence processes, including Momentive’s review of Zendesk’s long-term plan and potential synergies that could result from the combination. Momentive’s financial advisors also reviewed each of Zendesk’s and Momentive’s historical and recent trading price performance and the potential impact on setting the negotiated fixed exchange ratio. The representatives of Wilson Sonsini reviewed with the Momentive strategic committee the principal terms of the merger agreement under negotiation, including the circumstances in which the Momentive board of directors could change its recommendation to Momentive stockholders, and the amount of the termination fee payable by each party and the circumstances in which it would be payable. The Momentive board of directors also met in executive session, without management or financial advisors in attendance, and continued to discuss the terms of the merger agreement. At the conclusion of the meeting, the Momentive strategic committee directed the representatives of Wilson Sonsini to continue to negotiate the terms of the merger agreement.

Also on October 22, 2021, at a meeting of the Zendesk transaction committee at which members of the Zendesk management team and representatives of Goldman Sachs and Hogan Lovells were present, the Zendesk transaction committee discussed engaging Centerview Partners LLC, which is referred to as “Centerview Partners,” to act as a financial advisor to Zendesk in connection with a potential strategic transaction with Momentive. Prior to this meeting, Centerview Partners periodically advised the Zendesk board of directors on such matters as well as ongoing corporate preparedness planning. After reviewing the terms of the engagement letter with Centerview Partners, which did not provide for the rendering of an opinion regarding the fairness of the potential strategic transaction with Momentive, the Zendesk transaction committee authorized the engagement of Centerview Partners. Members of management and representatives of Goldman Sachs reviewed and discussed the expected calculation of the exchange ratio for the potential strategic transaction with Momentive and certain unaudited prospective financial information relating to Zendesk and Momentive, each on a standalone basis, and Zendesk on a pro forma basis after giving effect to proposed strategic transaction with Momentive. Representatives of Goldman Sachs also discussed possible effects that the announcement of a strategic transaction with Momentive could have on the price of Zendesk common stock.

On October 25, 2021, at a meeting of the Zendesk transaction committee at which members of the Zendesk management team and representatives of Goldman Sachs and Hogan Lovells were present, the Zendesk transaction committee discussed engaging Goldman Sachs as Zendesk’s financial advisor in connection with a potential strategic transaction with Momentive and, after reviewing the terms of the engagement letter with Goldman Sachs, authorized the engagement of Goldman Sachs. Members of the Zendesk management team then provided an update regarding the status of its due diligence investigation of Momentive and key findings to date. Representatives of Goldman Sachs reviewed and discussed the method for determining the exchange ratio and the resulting impact on the Momentive stockholders’ ownership of the combined company, and possible investor and stock price reactions to the announcement of a strategic transaction with Momentive. Representatives of Goldman Sachs also reviewed and discussed certain unaudited prospective financial information relating to

 

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Zendesk and Momentive, each on a standalone basis, and Zendesk on a pro forma basis after giving effect to proposed strategic transaction with Momentive.

On October 26, 2021, at a regular meeting of the Zendesk board of directors at which members of the Zendesk management team and representatives of Goldman Sachs and Hogan Lovells were present, members of the Zendesk management team reviewed and discussed the potential strategic transaction with Momentive, including the status of negotiations with Momentive, the strategic rationale for the potential transaction, the potential synergies that may be achievable through the potential transaction and the possibility that the potential transaction would be growth accretive. Members of the Zendesk management team also reviewed and discussed the material terms of the draft merger agreement, including the consideration to be paid, certain covenants agreed to between the parties and the deal protections for Zendesk, including a termination fee for both parties of $150 million. Members of the Zendesk management team also reviewed the status of Zendesk’s legal, finance, accounting and tax due diligence of Momentive. Representatives of Goldman Sachs then reviewed and discussed certain preliminary financial analyses with respect to the proposed strategic transaction with Momentive.

On October 27, 2021, the Momentive strategic committee met, with members of Momentive management and representatives of Momentive’s legal advisors in attendance. The representatives of Wilson Sonsini provided an update on the negotiation of the merger agreement and the voting agreements, and reviewed the key terms of the voting agreement requested by Zendesk to be entered into by Mr. Lurie and Ryan Finley and Sheryl Sandberg and certain of their respective affiliates, each in their capacity as Momentive stockholders. The Momentive strategic committee determined that entry into the proposed voting agreements, should the Momentive board of directors approve the proposed acquisition, would be in the best interests of Momentive and its stockholders.

Also on October 27, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. The representatives of Wilson Sonsini reviewed with the members of the Momentive board of directors relevant Delaware law matters, including the directors’ fiduciary duties in connection with the merger. The representatives of Wilson Sonsini also reviewed with the Momentive board of directors the principal terms of the merger agreement and the voting agreements. Momentive’s financial advisors reviewed, on a preliminary basis, their respective financial analysis of the exchange ratio and related financial aspects of the merger. The Momentive board of directors also discussed the strategic rationale for the merger, the integration of Momentive’s operations into the combined company, the operation of Momentive’s business prior to the completion of the merger and the announcement strategy for the merger. The Momentive board of directors also met in executive session, without management or financial advisors in attendance, and continued to discuss the terms of the merger agreement.

Also on October 27, 2021, at a regular meeting of the Zendesk board of directors at which members of the Zendesk management team and representatives of Goldman Sachs and Hogan Lovells were present, members of the Zendesk management team and representatives of Goldman Sachs reviewed and discussed the potential synergies that may be achievable through a potential strategic transaction with Momentive, the possible value creation that could flow to the stockholders of the combined company if those synergies were achieved and the possibility that the potential transaction would be growth accretive.

On October 28, 2021, representatives of Wilson Sonsini and Hogan Lovells and members of management of Momentive and Zendesk management finalized the forms of the merger agreement, voting agreements and related transaction documents.

Also on October 28, 2021, at a special meeting of the Zendesk board of directors at which members of the Zendesk management team and representatives of Goldman Sachs and Hogan Lovells were present, representatives of Goldman Sachs reviewed and discussed Goldman Sachs’ financial analyses with respect to the proposed strategic transaction with Momentive and delivered to the Zendesk board of directors its oral opinion, subsequently confirmed by delivery of a written opinion dated October 28, 2021, that, as of such date, based upon and subject to the factors and various assumptions made, procedures followed and limitations and

 

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qualifications set forth in the written opinion, the exchange ratio of 0.225 of a share of Zendesk common stock to be issued in exchange for each share of Momentive common stock pursuant to the merger agreement was fair, from a financial point of view, to Zendesk. The Zendesk board of directors, with the advice and assistance of its financial advisors and outside legal counsel and Zendesk management, evaluated and discussed the terms of the merger agreement and the transactions contemplated thereby, taking into consideration various factors, including those described in the section titled “—Zendesk’s Reasons for the Merger and Recommendation of the Zendesk Board of Directors.” After further consideration and discussion, the Zendesk board of directors unanimously (i) determined that the merger and the share issuance, on the terms and subject to the conditions set forth in the merger agreement, are advisable and fair to, and in the best interests of, Zendesk and its stockholders; (ii) approved the merger agreement and the transactions contemplated thereby, including the merger and the share issuance; and (iii) recommended that Zendesk stockholders vote to approve the Zendesk share issuance proposal.

Later on October 28, 2021, the Momentive board of directors met, with members of Momentive management and representatives of Momentive’s legal and financial advisors in attendance. Representatives of Wilson Sonsini provided an update on the negotiation of the merger agreement and other relevant transaction documents, including updates to the final terms of the merger agreement since the last meeting of the Momentive board of directors. Momentive’s financial advisors provided the Momentive board of directors with their respective financial analysis of the exchange ratio and related financial aspects of the merger. Representatives of J.P. Morgan then delivered its oral opinion to the Momentive board of directors, subsequently confirmed by delivery of a written opinion dated October 28, 2021, to the effect that, as of the date of such opinion and based upon and subject to the factors and the assumptions set forth in its opinion, the exchange ratio was fair, from a financial point of view, to Momentive common stockholders. Also at this meeting, Allen & Company rendered an oral opinion, confirmed by delivery of a written opinion dated October 28, 2021, to the Momentive board of directors to the effect that, as of such date and based on and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken as set forth in such opinion, the exchange ratio provided for in the merger agreement was fair, from a financial point of view, to holders of Momentive common stock (other than, to the extent applicable, Zendesk, Merger Sub and their respective affiliates). The Momentive board of directors was also provided with certain information from each of Allen & Company and J.P. Morgan regarding their respective material relationships with Momentive and Zendesk during the preceding two-year period. Following discussion, and taking into consideration various factors, including those described in the section titled “—Momentive’s Reasons for the Merger and Recommendation of the Momentive Board of Directors,” the Momentive board of directors determined by unanimous approval of the directors present at the meeting that the merger agreement and the merger are advisable and fair to and in the best interests of Momentive and its stockholders, and declared advisable, adopted and approved in all respects the merger agreement and the transactions contemplated by the merger agreement, including the merger, and approved the execution and delivery of the merger agreement and the voting agreements.

Still later on October 28, 2021, the merger agreement and voting agreements were executed by the relevant parties, and Zendesk and Momentive publicly announced the merger and the execution of the merger agreement.

On October 31, 2021, a representative of Party C indicated orally on an unsolicited basis in an unrelated social situation to a Momentive director that Party C remained interested in a transaction with Momentive “at some price.” No proposal with respect to a transaction was made.

On November 1, 2021, the Momentive board of directors ratified the actions of the Momentive board of directors taken at the meeting held October 28, 2021 by unanimous written consent.

Zendesk’s Reasons for the Merger and Recommendation of the Zendesk Board of Directors

At a meeting of the Zendesk board of directors held on October 28, 2021, the Zendesk board of directors unanimously: (a) determined that the merger and the issuance of shares of Zendesk common stock in the merger

 

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as contemplated by the merger agreement, on the terms and subject to the conditions set forth in the merger agreement, are advisable and fair to, and in the best interests of, Zendesk and its stockholders; (b) authorized and approved the execution, delivery and performance of the merger agreement by Zendesk and approved the merger and the issuance of shares of Zendesk common stock in the merger as contemplated by the merger agreement; and (c) recommended that Zendesk’s stockholders vote in favor of the Zendesk share issuance proposal. Accordingly, the Zendesk board of directors unanimously recommends that Zendesk’s stockholders vote “FOR” the approval of the Zendesk share issuance proposal and “FOR” the approval of the Zendesk adjournment proposal.

In evaluating the merger, the Zendesk board of directors consulted with members of Zendesk’s management team and with Zendesk’s outside legal counsel and financial advisors and, in reaching its determinations and recommendations, the Zendesk board of directors considered a number of factors.

Many of the factors considered favored the determinations and recommendations made by the Zendesk board of directors, including the following (not in any relative order of importance):

 

   

the highly complementary customer bases and strategic fit of the businesses of Zendesk and Momentive and the expectation that Zendesk and Momentive will be able to create a differentiated, integrated platform that combines customer interactions and insights into intelligence and understanding;

 

   

the expectation that the combination of Zendesk’s leading customer service and sales platform and Momentive’s leadership in feedback, surveys and market research presents a unique opportunity for the combined company to emerge as the leader in customer intelligence;

 

   

the expectation that the combined company will have greater research and development resources, engineering expertise and technology, which will allow Zendesk to better serve customers and accelerate innovation;

 

   

the expectation that Zendesk will be able to accelerate Momentive’s enterprise maturation by leveraging Zendesk’s go-to-market capabilities and operating model;

 

   

the expectation, based on estimates provided by members of Zendesk’s management team prior to the execution of the merger agreement, that Zendesk and Momentive combined will be able to achieve revenue synergies of approximately $274 million by 2025;

 

   

the expectation, based on estimates provided by members of Zendesk’s management team prior to the execution of the merger agreement, that the combined company will have increased financial strength and flexibility, with an estimated $4.6 billion in combined revenue by 2025;

 

   

the expectation, based on estimates provided by members of Zendesk’s management team prior to the execution of the merger agreement, that the merger will be accretive to the long-term revenue growth rate of the combined company;

 

   

the expectation that the larger scale organization, greater marketing resources and international reach of the combined company will lead to improved opportunities for marketing and cross-selling products;

 

   

the probability that regulatory approvals for the merger would be obtained in a timely manner without the imposition of any conditions that Zendesk would find unacceptable;

 

   

the fact that, based on the number of shares of Zendesk common stock and the number of shares of Momentive common stock expected to be outstanding immediately prior to the completion of the merger, Zendesk’s stockholders are expected to own approximately 78% of the combined company immediately after the completion of the merger;

 

   

information and discussions with members of Zendesk’s management team and with Zendesk’s advisors regarding Momentive’s business, assets, financial condition, results of operations, reputation,

 

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current business strategy and prospects, including the projected long-term financial results of Momentive as a standalone company, the size and scale of the combined company and the expected pro forma effect of the merger on each company;

 

   

the belief that the Zendesk management team will be able to successfully integrate the two companies;

 

   

the oral opinion rendered by representatives of Goldman Sachs to the Zendesk board of directors, subsequently confirmed in writing by delivery of a written opinion dated as of October 28, 2021, that as of the date of the opinion and based upon and subject to the factors and various assumptions made, procedures followed and limitations and qualifications set forth therein, the exchange ratio pursuant to the merger agreement was fair, from a financial point of view, to Zendesk, such opinion more fully described below in the section titled “The Merger—Opinion of Zendesk’s Financial Advisor—Opinion of Goldman Sachs & Co. LLC”;

 

   

the review by the Zendesk board of directors with its advisors of the financial and other terms of the merger agreement, including the parties’ representations, warranties and covenants, the conditions to their respective obligations to complete the merger and the termination provisions, as well as the likelihood of the completion of the merger and the evaluation by the Zendesk board of directors of the likely time period necessary to complete the merger. The Zendesk board of directors also considered the following specific aspects of the merger agreement:

 

   

the fact that the exchange ratio is fixed and will not be adjusted to compensate for any decrease in the trading price of Zendesk common stock prior to the completion of the merger, which provides certainty to Zendesk’s stockholders as to their pro forma percentage ownership of the combined company immediately after the completion of the merger (as more fully described in the section titled “The Merger Agreement—Merger Consideration”);

 

   

the limited number and nature of the conditions to the obligation of Momentive to complete the merger, as well as the probability that those conditions would be satisfied prior to 11:59 p.m. (California time) on the end date (as more fully described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger”);

 

   

the conditions to the obligations of Zendesk and Merger Sub to complete the merger, as well as the probability that those conditions would be satisfied prior to 11:59 p.m. (California time) on the end date (as more fully described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger”);

 

   

the extensive representations and warranties made by Momentive (as more fully described in the section titled “The Merger Agreement—Representations and Warranties”), as well as the covenants in the merger agreement relating to the conduct of Momentive’s business during the period from the date of the merger agreement through the effective time (as more fully described in the section titled “The Merger Agreement—Interim Operations of Momentive and Zendesk”);

 

   

the fact that the merger agreement includes restrictions, subject to certain exceptions, on the ability of Momentive to solicit, initiate, knowingly encourage, assist, induce or knowingly facilitate the making, submission or announcement of, or to engage in discussions or negotiations with any person or entity with respect to, any Momentive acquisition proposal or Momentive acquisition inquiry (each as defined below in, and as more fully described in, the section titled “The Merger Agreement—No Solicitation or Discussions by Momentive”) and Zendesk’s right to match any Momentive superior offer (as defined below in, and as more fully described in, the section titled “The Merger Agreement—Stockholder Meetings; Board Recommendations”);

 

   

the ability of Zendesk to terminate the merger agreement and receive a $150 million termination fee from Momentive upon the occurrence of a Momentive triggering event (as defined below in the section titled “The Merger Agreement—Termination of the Merger Agreement”) (as more fully described in the section titled “The Merger Agreement—Transaction Expenses and Termination Fees”);

 

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Zendesk’s right, prior to the approval of the Zendesk share issuance proposal, to furnish non-public information regarding Zendesk and its subsidiaries to, and to enter into discussions or negotiations with, any person or entity in response to a bona fide, written Disruptive Zendesk Acquisition Proposal (as defined below in the section titled “The Merger Agreement—No Solicitation or Discussions by Zendesk Relating to Disruptive Zendesk Acquisition Proposals”) that is made to Zendesk after the date of the merger agreement (and not withdrawn) (as more fully described in the section titled “The Merger Agreement—No Solicitation or Discussions by Zendesk Relating to Disruptive Zendesk Acquisition Proposals”);

 

   

the right of the Zendesk board of directors, prior to the approval of the Zendesk share issuance proposal, to make a Zendesk recommendation change in connection with a disruptive Zendesk superior offer or a Zendesk change in circumstances (as defined below in the section titled “The Merger Agreement—No Solicitation or Discussions by Zendesk Relating to Disruptive Zendesk Acquisition Proposals” and as more fully described in the section titled “The Merger Agreement— Stockholder Meetings; Board Recommendations”); and

 

   

the fact that if the Zendesk share issuance proposal has not been approved at the Zendesk special meeting, Zendesk may have no liability to Momentive under the merger agreement (as more fully described in the section titled “The Merger Agreement—Transaction Expenses and Termination Fees”).

In the course of its deliberations, the Zendesk board of directors also considered a variety of risks and other potentially negative factors, including the following (which are not in any relative order of importance):

 

   

the fact that the opinion of Goldman Sachs as to the fairness, from a financial point of view, of the exchange ratio pursuant to the merger agreement speaks only as of the date of the written opinion and is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of the written opinion and the fact that Goldman Sachs assumes no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its written opinion;

 

   

the risk that Momentive’s financial performance may not meet Zendesk’s expectations;

 

   

the possibility that the merger may not be completed or that completion may be unduly delayed for reasons beyond the control of Zendesk;

 

   

the possible disruption to Zendesk’s and Momentive’s respective operations that may result from the merger, including the potential for diversion of management and employee attention from other strategic opportunities or operational matters and for increased employee attrition during the period prior to completion of the merger, and the potential effect of the merger on Zendesk’s and Momentive’s respective businesses and relations with customers and suppliers;

 

   

the adverse impact that business uncertainty pending completion of the merger could have on Zendesk’s and Momentive’s respective ability to attract, retain and motivate key personnel, and could have on Zendesk’s and Momentive’s respective ability to win new business with customers;

 

   

the difficulties and challenges inherent in completing the merger and integrating the businesses, operations and workforce of Momentive with those of Zendesk, and the possibility of encountering difficulties in achieving expected revenue growth and other synergies;

 

   

the risk that the anticipated strategic and other benefits to Momentive and Zendesk following completion of the merger, including the synergies described above, will not be realized or will take longer to realize than expected;

 

   

the risk that certain Zendesk customers and partners that compete with Momentive, and that certain Momentive customers and partners that compete with Zendesk, may be more reluctant to work with or award future business to the combined company;

 

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the potential that the fixed exchange ratio could result in Zendesk delivering greater value to Momentive stockholders than had been anticipated by Zendesk if the value of Zendesk common stock increases after the date of the merger agreement;

 

   

the risk that Zendesk stockholders may not approve the Zendesk share issuance proposal or that Momentive stockholders may not approve the Momentive merger proposal;

 

   

the risk that the structure of the merger could potentially trigger termination rights of Momentive’s counterparties under, or breach certain restrictive covenants or other terms of, Momentive’s contracts with third parties;

 

   

certain terms and conditions of the merger agreement, including:

 

   

the fact that the merger agreement includes restrictions on the ability of Zendesk to solicit, initiate, knowingly encourage, assist, induce or knowingly facilitate the making, submission or announcement of, or to engage in discussions or negotiations with any person or entity with respect to, any Disruptive Zendesk Acquisition Proposal, subject to certain exceptions (as more fully described in the section titled “The Merger Agreement—No Solicitation or Discussions by Zendesk Relating to Disruptive Zendesk Acquisition Proposals”);

 

   

Momentive’s right, prior to the approval of the Momentive merger proposal, to furnish non-public information regarding Momentive and its subsidiaries to, and to enter into discussions or negotiations with, any person or entity in response to a bona fide, written Momentive acquisition proposal that is made to Momentive after the date of the merger agreement (and not withdrawn) (as more fully described in the section titled “The Merger Agreement—No Solicitation or Discussions by Momentive”);

 

   

the right of the Momentive board of directors, prior to the approval of the Momentive merger proposal, to make a Momentive recommendation change in connection with a Momentive superior offer or a Momentive change in circumstances (as more fully described in the section titled “The Merger Agreement—Stockholder Meetings; Board Recommendations”);

 

   

the restrictions on the right of the Zendesk board of directors to make a Zendesk recommendation change, subject to certain conditions (including in connection with a termination of the merger agreement by Momentive as a result of a Zendesk triggering event, the payment by Zendesk to Momentive of a $150 million termination fee) (as more fully described in the section titled “The Merger Agreement—Transaction Expenses and Termination Fees”), which could have the effect of discouraging disruptive Zendesk acquisition proposals from being made or pursued; and

 

   

the requirement that Zendesk provide Momentive with an opportunity to propose revisions to the merger agreement prior to Zendesk being able to make a Zendesk recommendation change in connection with a disruptive Zendesk superior offer or a Zendesk change in circumstances (as more fully described in the section titled “The Merger Agreement—Stockholder Meetings; Board Recommendations”);

 

   

the fact that Zendesk’s current stockholders will have reduced ownership and voting interests after the completion of the merger (compared to their current ownership and voting interests in Zendesk) and will exercise less influence over the Zendesk board of directors and management and policies of Zendesk (compared to their current influence over the Zendesk board of directors and management and policies of Zendesk);

 

   

the substantial costs to be incurred in connection with the merger, including those incurred regardless of whether the merger is completed;

 

   

the risks and contingencies relating to the announcement and pendency of the merger and the risks and costs to Zendesk if the merger is not completed on a timely basis or at all, including the impact on Zendesk’s relationships with employees, with customers and with third parties;

 

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the fact that if the merger is not completed, Zendesk will have expended significant human and financial resources on a failed transaction, and may also be required to pay a termination fee of $150 million under certain circumstances (as more fully described in the section titled “The Merger Agreement—Transaction Expenses and Termination Fees”); and

 

   

various other risks associated with the merger and the business of Zendesk described in the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” respectively.

The factors set forth above are not intended to be exhaustive, but include many of the material factors considered by the Zendesk board of directors in approving the merger, the merger agreement and the issuance of shares of Zendesk common stock in the merger as contemplated by the merger agreement, in authorizing the execution of the merger agreement and related transaction documents and in recommending that Zendesk’s stockholders vote in favor of the Zendesk share issuance proposal. In view of the wide variety of factors, both positive and negative, considered in connection with making its determinations and recommendations, and the complexity of these matters, the Zendesk board of directors did not find it practical to, and did not attempt to, quantify, rank or otherwise assign any relative or specific weights or values to any of the various factors considered in reaching its determination to approve the merger, the merger agreement and the issuance of shares of Zendesk common stock in the merger as contemplated by the merger agreement and to recommend that Zendesk’s stockholders vote in favor of the Zendesk share issuance proposal. The Zendesk board of directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the Zendesk board of directors. In addition, individual members of the Zendesk board of directors may have given different weights to different factors. The Zendesk board of directors carefully considered all of the factors described above as a whole.

Momentive’s Reasons for the Merger and Recommendation of the Momentive Board of Directors

The Momentive board of directors unanimously: (i) determined that the terms of the merger agreement and the transactions contemplated thereby are fair to and in the best interests of Momentive and the Momentive stockholders; (ii) declared advisable, approved and authorized in all respects the merger agreement, the performance by Momentive of its obligations thereunder and the consummation of the transactions contemplated thereby, on the terms and subject to the conditions set forth in the merger agreement; and (iii) recommended that Momentive stockholders adopt the merger agreement. Accordingly, the Momentive board of directors unanimously recommends that Momentive stockholders vote “FOR” the Momentive merger proposal, “FOR” the Momentive compensation proposal and “FOR” the Momentive adjournment proposal.

As described in the section titled “—Background of the Merger,” in evaluating the merger agreement and the transactions contemplated thereby, including the merger, the Momentive board of directors held a number of meetings and consulted with Momentive management and Momentive’s outside legal and financial advisors. In reaching its decision to approve the merger agreement and to recommend that Momentive stockholders vote to adopt the merger agreement, the Momentive board of directors considered a number of factors, including, but not limited to the following (which are not necessarily presented in order of their relative importance to the Momentive board of directors), and concluded that entering into the merger agreement with Zendesk was advisable and in the best interests of Momentive and the Momentive stockholders.

 

   

Strategic Rationale of the Combination. The strategic and business rationale of the merger. Among the potential benefits identified by the Momentive board of directors were:

 

   

The opportunity to combine two successful businesses with well-positioned and proven product and technology portfolios and complementary product offerings.

 

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The importance of scale in the competitive market environments in which Momentive and Zendesk operate, and the potential for the merger to enhance the combined company’s ability to compete effectively in those environments and across multiple end markets, including the ability to capitalize on new growth opportunities and to compete for customers and key employee talent.

 

   

The markets and use cases for the combined company through the combination of Momentive products with Zendesk products.

 

   

The Momentive board of directors’ view, based on discussions with Momentive management, of the ability of Zendesk management to successfully integrate and combine the respective businesses of Momentive and Zendesk.

 

   

The cultural alignment between Momentive and Zendesk, including shared cultures of innovation, excellence and collaboration.

 

   

Discussions with Momentive management and Momentive’s advisors regarding Zendesk’s business, operations, strategy and future prospects. In this regard, the Momentive board of directors considered the combined company’s financial condition as well as the diversification and growth expected to result from the merger.

 

   

The expectation that the combined company could achieve approximately $274 million of revenue synergies by 2025, and that Momentive stockholders will be able to participate in the benefits of such potential synergies as stockholders of the combined company.

 

   

Financial Condition, Results of Operations and Prospects of Momentive; Risks of Execution. The current, historical and projected financial condition, results of operations and business of Momentive, as well as Momentive’s prospects and risks if it were to remain an independent company. In particular, the Momentive board of directors considered Momentive’s current business plan and long-term operating plan (as reflected in the section titled —Momentive Unaudited Financial Projections). The Momentive board of directors considered these plans and the potential opportunities that they presented against, among other things: (i) the risks and uncertainties associated with achieving and executing Momentive’s current business plan and long-term operating plan in the short and long term; (ii) the impact of market, customer and competitive trends on Momentive; and (iii) the general risks related to market conditions that could reduce the price of Momentive common stock. The Momentive board of directors considered, among other potential risks to the achievement of Momentive’s current business plan and long-term operating plan, Momentive’s competitive positioning and prospects as an independent company, including Momentive’s size, as well as its financial resources, relative to those of its competitors, and new and evolving competitive threats.

 

   

Value to Momentive Stockholders. The belief of the Momentive board of directors that the exchange ratio represented the highest and best value that Momentive could obtain from Zendesk, taking into account the Momentive board of directors’ familiarity with the business, operations, prospects, business strategy, assets, liabilities and general financial condition of Momentive on a historical and prospective basis. The Momentive board of directors further considered:

 

   

The implied value of the consideration to be received by Momentive stockholders in the merger (which was $27.60 per share of Momentive common stock based on the exchange ratio and the closing price of Zendesk common stock on October 27, 2021) represented an approximate premium of approximately 41% over the unaffected volume weighted average price of Momentive common stock over the 30 calendar days preceding October 6, 2021.

 

   

The exchange ratio of 0.225 of a share of Zendesk common stock for each share of Momentive common stock is fixed, which affords Momentive stockholders the opportunity to benefit from any potential appreciation in the value of Zendesk common stock.

 

   

The exchange ratio was the result of extensive negotiation between the parties.

 

 

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Momentive stockholders will own approximately 22% of the combined company on a pro forma basis (based on the exchange ratio and the number of shares of Momentive common stock outstanding as of October 25, 2021 and Zendesk common stock outstanding as of October 28, 2021) and have the opportunity to participate in the future earnings and growth of the combined company.

 

   

The expected treatment of the merger as a tax-free reorganization under Section 368(a) of the Code for U.S. federal income tax purposes, as more fully described in the section titled “U.S. Federal Income Tax Consequences of the Merger.”

 

   

Results of Strategic Review Process. The transaction with Zendesk was the result of an extensive strategic review process overseen by the Momentive strategic committee. The Momentive board of directors considered that Momentive management and the Momentive financial advisors engaged in discussions with 18 potential counterparties, consisting of nine potential strategic acquirors (including Zendesk) and nine financial sponsors, concerning their interest in an acquisition of Momentive. The Momentive board of directors considered the nature of the engagement by each of these potential counterparties over multiple meetings.

 

   

Potential Strategic Alternatives. The assessment of the Momentive board of directors that none of the alternatives to the merger (including the possibility of continuing to operate Momentive as an independent company or pursuing a different transaction, and the desirability and perceived risks of those alternatives, as well as the potential benefits and risks to Momentive stockholders of those alternatives and the timing and likelihood of effecting such alternatives) was reasonably likely to present superior opportunities for Momentive to create greater value for Momentive stockholders, taking into account execution risks as well as business, competitive, financial, industry, legal, market and regulatory risks. In assessing the strategic transactions and alternatives available to Momentive, the Momentive board of directors considered, among other things, the uncertainty of executing or receiving alternative cash proposals from potential alternative acquirors, as described in the section titled “ —Background of the Merger.”

 

   

Opinion of Allen & Company. The opinion, dated October 28, 2021, of Allen & Company to the Momentive board of directors as to the fairness, from a financial point of view and as of such date, of the exchange ratio, which opinion was based on and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken as set forth in such opinion attached as Annex C to this joint proxy statement/prospectus and more fully described in the section titled “ —Opinion of Allen & Company LLC.

 

   

Opinion of J.P. Morgan. The oral opinion of J.P. Morgan rendered to the Momentive board of directors, subsequently confirmed in writing, that, as of October 28, 2021, and based upon and subject to factors and assumptions in its opinion, the exchange ratio was fair, from a financial point of view, to Momentive common stockholders. The opinion is more fully described in the section titled “—Opinion of J.P. Morgan Securities LLC” and the full text of the opinion is attached as Annex D to this joint proxy statement/prospectus.

 

   

Terms of the Merger Agreement. The terms of the merger agreement, which was the product of arms’-length negotiations, and the belief of the Momentive board of directors that the merger agreement contained terms that provided Momentive with a high level of closing certainty. The factors considered included:

 

   

Momentive’s ability, under certain circumstances, to furnish information to, and conduct negotiations with, third parties regarding acquisition proposals.

 

   

The Momentive board of directors’ ability, under certain circumstances, to withdraw or modify its recommendation that Momentive stockholders vote in favor of the adoption of the merger agreement.

 

 

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The limited conditions to Zendesk’s obligation to consummate the merger, making the merger reasonably likely to be consummated.

 

   

The consummation of the merger not being subject to a financing condition. In addition, Zendesk does not require financing in order to complete the merger.

 

   

The Momentive board of directors’ belief that the $150 million termination fee payable by Momentive in certain circumstances was reasonable, consistent with similar fees payable in comparable transactions, and not preclusive of other acquisition proposals.

 

   

The limited circumstances in which the Zendesk board of directors may terminate the merger agreement or change its recommendation that Zendesk stockholders approve the Zendesk share issuance proposal.

 

   

The requirement that Zendesk pay Momentive a $150 million termination fee in certain circumstances.

The Momentive board of directors also considered uncertainties and risks and other potentially negative factors related to the merger, including the following:

 

   

Fixed Exchange Ratio. The exchange ratio under the merger agreement is fixed, meaning that Momentive stockholders could be adversely affected, and the implied value of the merger consideration will decline, if there is a decline in the trading price of Zendesk common stock.

 

   

Merger and Integration Risks. The risk that the combined company will not realize all of the anticipated strategic and other benefits of the merger, including the possibility that Zendesk’s financial performance may not meet Momentive’s expectations and that the expected synergies may not be realized or will cost more to achieve than anticipated. In this regard, the Momentive board of directors was aware of challenges inherent in completing the merger and integrating the business, operations and workforce of Momentive and Zendesk. The Momentive board of directors was aware that this process could take longer than expected and might ultimately be unsuccessful.

 

   

Effects of the Merger Announcement. The effects of the public announcement of the merger, including the: (1) effects on Momentive’s employees, customers, operating results and potential effects on the stock price of Zendesk and Momentive; (2) impact on Momentive’s ability to attract and retain key management, sales and marketing and technical personnel; and (3) potential for litigation in connection with the merger.

 

   

Receipt of Required Stockholders Votes. The possibility that Momentive stockholders may not approve the adoption of the merger agreement at the Momentive special meeting or that Zendesk stockholders may not approve the Zendesk share issuance proposal at the Zendesk special meeting.

 

   

Zendesk’s Ability to Consider Alternative Transactions. The risk related to Zendesk’s right, subject to certain conditions, to respond to and negotiate with respect to certain acquisition proposals from third parties, and the related possibility that the Zendesk board of directors might withdraw its recommendation in favor of the Zendesk share issuance proposal.

 

   

Restrictions on Momentive’s Ability to Consider Alternative Transactions or Terminate the Merger Agreement to Enter into an Alternative Transaction. The restrictions in the merger agreement on Momentive’s ability to solicit competing proposals (subject to certain exceptions to allow the Momentive board of directors to exercise its fiduciary duties and change its recommendation to Momentive stockholders), the ability of Zendesk to terminate the merger agreement if the Momentive board of directors changes its recommendation to Momentive stockholders and Momentive’s inability to terminate the merger agreement in order to enter into an agreement with respect to a superior proposal.

 

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Termination Fee Payable by Momentive. The requirement that Momentive pay Zendesk a termination fee under certain circumstances following termination of the merger agreement. In this regard, the Momentive board of directors considered the potentially discouraging impact that this termination fee could have on a third party’s interest in making a competing proposal to acquire Momentive.

 

   

Risk Associated with Failure to Consummate the Merger. The possibility that the merger might not be consummated, and if it is not consummated, that: (1) Momentive’s directors, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work on behalf of Momentive during the pendency of the merger; (2) Momentive will have incurred significant transaction and other costs; (3) Momentive’s continuing business relationships with customers, business partners and employees may be adversely affected; (4) the trading price of Momentive common stock could be adversely affected; (5) the termination fee of $150 million payable by Zendesk to Momentive will not be available in all instances in which the merger agreement is terminated and such termination fee may not be sufficient to compensate Momentive for the damage suffered by its business as a result of the pendency of the merger or of the strategic initiatives forgone by Momentive during this period; (6) the other contractual and legal remedies available to Momentive in the event of the termination of the merger agreement may be insufficient, costly to pursue or both; and (7) the failure of the merger to be consummated could result in an adverse perception among customers, potential customers, employees and investors about Momentive’s prospects.

 

   

Impact of Interim Restrictions on Momentive’s Business Pending the Completion of the Merger. The restrictions on the conduct of Momentive’s business prior to the consummation of the merger, which may delay or prevent Momentive from undertaking strategic initiatives before the completion of the merger that, absent the merger agreement, Momentive might have pursued.

 

   

Interests of Momentive’s Directors and Executive Officers. The interests that Momentive’s directors and executive officers may have in the merger, which may be different from, or in addition to, those of Momentive’s other stockholders.

 

   

No Appraisal Rights. The lack of appraisal rights for Momentive stockholders in connection with the merger.

This discussion is not meant to be exhaustive. Rather, it summarizes the material reasons and factors evaluated by the Momentive board of directors in its consideration of the merger. After considering these and other factors, the Momentive board of directors concluded that the potential benefits of entering into the merger agreement outweighed the uncertainties and risks. In the light of the variety of factors considered by the Momentive board of directors and the complexity of these factors, the Momentive board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights, ranks or values to the factors that it considered in reaching its determination and recommendations. Moreover, each member of the Momentive board of directors applied his or her own personal business judgment to the process and may have assigned different relative weights, ranks or values to the different factors. The Momentive board of directors approved the merger agreement and the merger, and recommended that Momentive stockholders adopt the merger agreement, based upon the totality of the information presented to, and considered by, the Momentive board of directors.

The foregoing discussion of the information and factors considered by the Momentive board of directors in approving the merger agreement is forward looking in nature. This information should be read in the light of the factors discussed in the section titled “Cautionary Statement Regarding Forward-Looking Statements.”

Opinion of Zendesk’s Financial Advisor

Opinion of Goldman Sachs & Co. LLC

At a meeting of the Zendesk board of directors, Goldman Sachs rendered to the Zendesk board of directors its oral opinion, subsequently confirmed in Goldman Sachs’ written opinion, dated October 28, 2021, to the effect

 

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that, as of the date of Goldman Sachs’ written opinion, and based upon and subject to the factors and assumptions set forth therein, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to Zendesk.

The full text of the written opinion of Goldman Sachs, dated October 28, 2021, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this joint proxy statement/prospectus as Annex B. The summary of Goldman Sachs’ opinion contained in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Zendesk board of directors in connection with its consideration of the transaction contemplated by the merger agreement, which is referred to as the “transaction” in the section titled “—Opinion of Goldman Sachs & Co. LLC.” The Goldman Sachs opinion is not a recommendation as to how any holder of Zendesk common stock should vote with respect to the transaction or any other matter.     

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

 

   

the merger agreement;

 

   

the annual reports to stockholders and Annual Reports on Form 10-K of Zendesk and Momentive for the five fiscal years ended December 31, 2020;

 

   

Momentive’s Registration Statement on Form S-1, including the prospectus contained therein dated August 29, 2018, relating to Momentive’s initial public offering of Momentive common stock;

 

   

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Zendesk and Momentive;

 

   

certain publicly available research analyst reports for Zendesk and Momentive;

 

   

certain other communications from Zendesk and Momentive to their respective stockholders;

 

   

certain internal financial analyses and forecasts for Momentive as prepared by its management;

 

   

certain internal financial analyses and forecasts for Zendesk (including a schedule of expected utilization of net operating loss carryforwards by Zendesk) on a standalone basis, which are referred to in this section titled “—Opinion of Goldman Sachs & Co. LLC” as the “Zendesk standalone forecasts,” and on a pro forma basis giving effect to the merger, which are referred to in this section titled “—Opinion of Goldman Sachs & Co. LLC” as the “Zendesk combined company forecasts”, as well as certain financial analyses and forecasts for Momentive, in each case for fiscal years 2021 through 2031 and as approved for Goldman Sachs’ use by Zendesk, which are referred to collectively as the “forecasts” in this section titled “—Opinion of Goldman Sachs & Co. LLC”; and

 

   

certain operating synergies projected by Zendesk management to result from the merger, as approved for Goldman Sachs’ use by Zendesk, which are referred to as the “synergies estimates” in this section titled “—Opinion of Goldman Sachs & Co. LLC.”

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

 

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

Goldman Sachs’ opinion did not address the underlying business decision of Zendesk to engage in the transaction, or the relative merits of the transaction as compared to any strategic alternatives that may be available to Zendesk; nor did it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addressed only the fairness from a financial point of view to Zendesk, as of the date of its written opinion, of the exchange ratio pursuant to the merger agreement.

Goldman Sachs did not express any view on, and its opinion did not address, any other term or aspect of the merger agreement or the transaction or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the transaction, including, the fairness of the exchange ratio to, or any consideration received in connection therewith by, the holders of any class of securities, creditors, or other constituencies of Zendesk; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Zendesk and Momentive, or any class of such persons in connection with the transaction, whether relative to the exchange ratio pursuant to the merger agreement or otherwise. Goldman Sachs did not express any opinion as to the prices at which Zendesk common stock or Momentive common stock would trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on Zendesk and Momentive, or the transaction, or as to the impact of the transaction on the solvency or viability of Zendesk and Momentive or the ability of Zendesk and Momentive to pay their respective obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of its written opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its written opinion. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the Zendesk board of directors in connection with its consideration of the transaction and the opinion does not constitute a recommendation as to how any holder of Zendesk common stock should vote with respect to such transaction or any other matter. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

Summary of Financial Analyses

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

 

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before October 27, 2021, the last completed trading day prior to the meeting of the Zendesk board of directors on October 28, 2021, and is not necessarily indicative of current or future market conditions.

Illustrative Discounted Cash Flow Analysis—Zendesk Standalone

Using the Zendesk standalone forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis of Zendesk. Using a mid-year discounting convention and discount rates ranging from 7.0% to 9.0%, reflecting estimates of Zendesk’s weighted average cost of capital, Goldman Sachs discounted to present value as of September 30, 2021 (i) estimates of the unlevered free cash flows, which are referred to as “UFCF,” for fiscal years 2021 through 2031 as reflected in the Zendesk standalone forecasts and (ii) a range of illustrative terminal values for Zendesk, which were calculated by applying exit terminal year, next twelve months’, which is referred to as “NTM,” UFCF multiples ranging from 30.0x to 40.0x, to a terminal year NTM UFCF, to be generated by Zendesk, as reflected in the Zendesk standalone forecasts (which analysis implied perpetuity growth rates ranging from 3.7% to 6.5%). Goldman Sachs derived the discount rates referenced above by application of the Capital Asset Pricing Model, which is referred to as “CAPM,” which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The illustrative terminal value to NTM UFCF multiple range for Zendesk was derived by Goldman Sachs utilizing its professional judgment and experience, taking into account, among other things, enterprise value over UFCF for calendar 2022 of certain publicly traded companies, as described below in the section titled “—Selected Public Company Comparables Analysis.”

Goldman Sachs derived a range of illustrative enterprise values for Zendesk by adding the ranges of present values it derived as described above. Goldman Sachs then added to the range of illustrative enterprise values it derived for Zendesk the amount of net cash of Zendesk as of September 30, 2021 and the net present value of net operating losses as reflected in the Zendesk standalone forecasts, in each case, as provided by Zendesk management and approved for Goldman Sachs’ use by Zendesk management, to derive a range of illustrative equity values for Zendesk. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Zendesk common stock, as provided by Zendesk management, to derive a range of illustrative present values per share of Zendesk common stock ranging from $130 to $197, rounded to the nearest dollar.

Illustrative Discounted Cash Flow Analysis—Combined Company

Using the Zendesk combined company forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis on Zendesk on a pro forma basis, after giving effect to the merger. Using a mid-year discounting convention and discount rates ranging from 7.25% to 9.25%, reflecting estimates of the combined company’s weighted average cost of capital, Goldman Sachs discounted to present value as of September 30, 2021 (i) estimates of the combined company’s UFCF for fiscal years 2021 through 2031 and taking into account the synergies estimates and (ii) a range of illustrative terminal values for the combined company, which were calculated by applying exit terminal year NTM UFCF multiples ranging from 27.5x to 37.5x, to a terminal year estimate of NTM UFCF to be generated by the combined company as reflected in the Zendesk combined company forecasts (which analysis implied perpetuity growth rates ranging from 3.6% to 6.6%). Goldman Sachs derived the discount rates referenced above by application of CAPM, which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The illustrative terminal value to NTM UFCF multiple range for the combined company was derived by Goldman Sachs utilizing its professional judgment and experience, taking into account the financial and trading data of comparable companies as of October 27, 2021, as described below in the section titled “—Selected Public Company Comparables Analysis.”

 

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Goldman Sachs derived a range of illustrative enterprise values for the combined company by adding the ranges of present values it derived as described above. Goldman Sachs then added to the range of illustrative enterprise values it derived for the combined company the net cash of the combined company as of September 30, 2021 and added the net present value of net operating losses of the combined company as reflected in the Zendesk combined company forecasts, in each case as provided by Zendesk management and approved for Goldman Sachs’ use by Zendesk management, to derive a range of illustrative equity values for the combined company. Goldman Sachs then divided the range of illustrative equity values by the number of fully diluted shares of Zendesk common stock estimated to be outstanding following consummation of the transaction, estimated by applying the exchange ratio by the number of fully diluted outstanding shares of Momentive common stock as of the last trading date, calculated on a treasury stock method, and adding the result to the number of fully diluted outstanding shares of Zendesk common stock as of the last trading date, each as provided by Zendesk management, to derive a range of illustrative present values per share of common stock of the combined company ranging from $144 to $221, rounded to the nearest dollar.

Illustrative Present Value of Future Share Price—Zendesk Standalone

Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of Zendesk common stock, which is designed to provide an indication of the present value of a theoretical future value of a company’s equity as a function of such company’s financial multiples. For this analysis, Goldman Sachs used the Zendesk standalone forecasts for each of the fiscal years 2021 through 2025. Goldman Sachs first calculated the implied enterprise value per share of Zendesk common stock as of December 31, for each of the fiscal years 2022 through 2024, by applying multiples of enterprise value to NTM revenue, which is referred to as “EV/NTM revenue,” in this section titled “—Opinion of Goldman Sachs & Co. LLC,” of 10.0x to 11.5x to estimates of Zendesk’s revenue for each of the fiscal years 2022 to 2024. These illustrative EV/NTM revenue multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical EV/NTM revenue multiples for Zendesk during the 3-month, 6-month, 1-year, and 3-year periods ending October 27, 2021, as described below in the section titled “—Historical EV/NTM Trading Multiples.” Goldman Sachs then added the amount of Zendesk’s forecasted net cash as of December 31 for each of the fiscal years 2022 to 2024, as provided by Zendesk management, from the respective implied enterprise values in order to derive a range of illustrative equity values for Zendesk. Goldman Sachs then divided the results by the number of projected year-end fully diluted outstanding shares of Zendesk common stock for each of the fiscal years 2022 to 2024, as provided by Zendesk management, to derive a range of implied future share prices. Goldman Sachs then discounted the implied per share future equity values for the twelve-months periods ending on December 31, 2022, on December 31, 2023 and on December 31, 2024, respectively, back to September 30, 2021, using an illustrative discount rate of 8.1%, reflecting an estimate of Zendesk’s cost of equity. Goldman Sachs derived such discount rate by application of CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied present values per share of Zendesk common stock of $149 to $212, rounded to the nearest dollar.

Goldman Sachs also performed an illustrative present value of future share price analysis, by calculating the implied enterprise values per share of Zendesk common stock as of December 31, for each of the fiscal years 2022 through 2024, by applying enterprise value to growth-adjusted EV/NTM revenue multiples adjusted using NTM revenue growth, of 0.40x to 0.45x to NTM revenue estimates for Zendesk for each of the fiscal years 2022 to 2024. For this analysis, Goldman Sachs used the Zendesk standalone forecasts for each of the fiscal years 2021 through 2025. These illustrative multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical growth-adjusted EV/NTM revenue multiples for Zendesk, as described below in the section titled “Historical EV/NTM Trading Multiples.” Goldman Sachs then added the amount of Zendesk’s forecasted net cash as of December 31 for each of the fiscal years 2022 to 2024, as provided by Zendesk management, from the respective implied enterprise values in order to derive a range of illustrative equity values for Zendesk. Goldman Sachs then divided the results by the number of projected year-end fully diluted outstanding shares of Zendesk common stock for each of the fiscal years 2022 to

 

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2024, as provided by Zendesk management, to derive a range of implied future share prices. Goldman Sachs then discounted the implied per share future equity values for the twelve-months periods ending on December 31, 2022, on December 31, 2023 and on December 31, 2024, respectively, back to September 30, 2021, using an illustrative discount rate of 8.1%, reflecting an estimate of Zendesk’s cost of equity. Goldman Sachs derived such discount rate by application of CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied present values per share of Zendesk common stock of $158 to $207, rounded to the nearest dollar.

Illustrative Present Value of Future Share Price—Combined Company

Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of Zendesk on a pro forma basis, after giving effect to the merger, which is designed to provide an indication of the present value of a theoretical future value of a company’s equity as a function of such company’s financial multiples. For this analysis, Goldman Sachs used the Zendesk combined company forecasts for each of the fiscal years 2021 through 2025. Goldman Sachs first calculated the implied enterprise value per share of common stock of the combined company as of December 31, for each of the fiscal years 2022 through 2024, by applying EV/NTM revenue multiples of 9.75x to 11.50x to NTM revenue estimates for the combined company for each of the fiscal years 2022 to 2024. These illustrative EV/NTM revenue multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical EV/NTM revenue multiples for Zendesk and Momentive and blended EV/NTM revenue multiples for the combined company, as described below in the section titled “—Historical EV/NTM Trading Multiples.” Goldman Sachs then added the amount of the combined company’s forecasted net cash as of December 31 for each of the fiscal years 2022 to 2024, as projected by Zendesk management, from the respective implied enterprise values in order to derive a range of illustrative equity values for the combined company. Goldman Sachs then divided the results by the number of projected year-end fully diluted shares of common stock of the combined company for each of the fiscal years 2022 to 2024, as provided by Zendesk management, to derive a range of implied future share prices. Goldman Sachs then discounted the implied per share future equity values for the twelve-months periods ending on December 31, 2022, on December 31, 2023 and on December 31, 2024, respectively, back to September 30, 2021 using an illustrative discount rate of 8.4%, reflecting an estimate of the combined company’s cost of equity. Goldman Sachs derived such discount rate by application of CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied present values of $150 to $229 per share of common stock of the combined company, rounded to the nearest dollar.

Goldman Sachs also performed an illustrative present value of future share price analysis, by calculating the implied enterprise values per share of Zendesk common stock on a pro forma basis, after giving effect to the merger, as of December 31, for each of the fiscal years 2022 through 2024, by applying enterprise value to growth-adjusted EV/NTM revenue multiples adjusted using NTM revenue growth, of 0.40x to 0.45x to NTM revenue estimates for the combined company for each of the fiscal years 2022 to 2024. For this analysis, Goldman Sachs used the Zendesk combined company forecasts for each of the fiscal years 2021 through 2025. Goldman Sachs first calculated the implied enterprise value per share of common stock of the combined company as of December 31, for each of the fiscal years 2022 through 2024, by applying EV/NTM revenue multiples of 9.75x to 11.50x to NTM revenue estimates for the combined company for each of the fiscal years 2022 to 2024. These illustrative EV/NTM revenue multiple estimates were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical growth-adjusted EV/NTM revenue multiples for Zendesk and Momentive and blended growth-adjusted EV/NTM revenue multiples for the combined company, as described below in the section titled “—Historical EV/NTM Trading Multiples.” Goldman Sachs then added the amount of the combined company’s forecasted net cash as of December 31 for each of the fiscal years 2022 to 2024, as projected by Zendesk management, from the respective implied enterprise values in order to derive a range of illustrative equity values for the combined company. Goldman Sachs then divided the results by the number of projected year-end fully diluted shares of common stock of the combined company for

 

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each of the fiscal years 2022 to 2024, as provided by Zendesk management, to derive a range of implied future share prices. Goldman Sachs then discounted the implied per share future equity values for the twelve-months periods ending on December 31, 2022, on December 31, 2023 and on December 31, 2024, respectively, back to September 30, 2021 using an illustrative discount rate of 8.4%, reflecting an estimate of the combined company’s cost of equity. Goldman Sachs derived such discount rate by application of CAPM, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied present values of $166 to $233 per share of common stock of the combined company, rounded to the nearest dollar.

Historical EV/NTM Trading Multiples

Goldman Sachs calculated and compared EV/NTM revenue multiples and growth-adjusted EV/NTM revenue multiples adjusted using NTM revenue growth for each of Zendesk, Momentive and the combined company, based on financial and trading data as of October 27, 2021, information Goldman Sachs obtained from Bloomberg, publicly available historical data, market data and Institutional Brokers’ Estimate System estimates. Goldman Sachs calculated average EV/NTM revenue multiples and average growth-adjusted EV/NTM revenue multiples over certain time periods prior to and including October 27, 2021.

The results of these calculations are as follows:

 

EV/NTM Revenue Multiple Over Time  
Average    Zendesk      Momentive      Combined Company
(Blended)
 

3-Months

     10.1x        6.1x        9.1x  

6-Months

     11.0x        6.2x        9.8x  

1-Year

     12.0x        6.7x        10.7x  

3-Year

     10.2x        7.0x        9.4x  
Growth-Adjusted EV/NTM Revenue Multiple Over
Time (1)
                    

3-Months

     0.40x        0.32x        0.38x  

6-Months

     0.43x        0.32x        0.42x  

1-Year

     0.48x        0.34x        0.46x  

3-Year

     0.37x        0.37x        0.38x  

 

(1)

Based on CY2 / CY1 Revenue, adjusted to reflect current NTM offset.

Selected Public Company Comparables Analysis

Goldman Sachs reviewed and compared certain financial and stock market information for the following publicly traded corporations, which are collectively referred to as the “comparable companies”:

 

   

Adobe Inc.;

 

   

Dynatrace, Inc.;

 

   

Microsoft Corporation;

 

   

Oracle Corporation;

 

   

Salesforce.com, inc.;

 

   

SAP SE;

 

   

ServiceNow, Inc.; and

 

   

Workday, Inc.

 

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Although none of the comparable companies is directly comparable to Zendesk, the companies included were chosen because they are mature publicly-traded companies in the software industry with operations that for purposes of analysis would be considered similar to certain projected operations of Zendesk.

Goldman Sachs calculated and compared the enterprise value as of October 27, 2021 as a multiple of UFCF for the comparable companies for calendar year 2022, based on financial and trading data as of October 27, 2021, information Goldman Sachs obtained from Bloomberg and publicly available historical and market data, in order to determine appropriate terminal NTM UFCF multiples ranges for Goldman Sachs’ illustrative discounted cash flow analyses.

The results of this analysis is summarized as follows:

 

Comparable Company

   EV/CY22 UFCF  

Adobe Inc.

     40x  

Dynatrace, Inc.

     63x  

Microsoft Corporation

     35x  

Oracle Corporation

     22x  

Salesforce.com, inc.

     50x  

SAP SE

     23x  

ServiceNow, Inc.

     60x  

Workday, Inc.

     56x  

Median

     45x  

General

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

Goldman Sachs prepared these analyses for purposes of providing its opinion to the Zendesk board of directors as to the fairness from a financial point of view to Zendesk, as of the date of its written opinion, of the exchange ratio pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Zendesk, Momentive, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

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

As described above, Goldman Sachs’ opinion to the Zendesk board of directors was one of many factors taken into consideration by the Zendesk board of directors in making its determination to approve the merger. The

 

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foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B to this joint proxy statement/prospectus.

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of Zendesk, Momentive, any of their respective affiliates and third parties, including Legion Partners Asset Management, a significant stockholder of Momentive, which is referred to as “Legion Partners,” or any currency or commodity that may be involved in the transaction contemplated by the merger agreement. Goldman Sachs acted as financial advisor to Zendesk in connection with, and participated in certain of the negotiations leading to, the transaction contemplated by the merger agreement. Goldman Sachs has provided certain financial advisory and/or underwriting services to Zendesk and its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as bookrunner with respect to the public offering by Zendesk of 0.625% convertible senior notes due 2025 in an aggregate principal amount of $1.15 billion, which are referred to as the “Zendesk 2025 convertible notes,” in June 2020. During the two-year period ended October 28, 2021, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to Zendesk and/or its affiliates of approximately $8.5 million. During the two-year period ended October 28, 2021, the Investment Banking Division of Goldman Sachs has not been engaged by Momentive, Legion Partners or their respective affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to Zendesk, Momentive, or Legion Partners and their respective affiliates for which our Investment Banking Division may receive compensation. Affiliates of Goldman Sachs also may have co-invested with Legion Partners and its affiliates from time to time and may have invested in limited partnership units of affiliates of Legion Partners and may do so in the future.

Goldman Sachs also acted as bookrunner with respect to the offering by Zendesk of 0.25% convertible senior notes due 2023 in an aggregate principal amount of $500 million, which are referred to as the “Zendesk 2023 convertible notes,” and together with the Zendesk 2025 convertible notes, the “Zendesk convertible notes,” in March 2018 and, concurrent with the issuance of the Zendesk convertible notes, Zendesk entered into capped call transactions with respect to the Zendesk convertible notes, which are collectively referred to as the “capped call transactions,” with Goldman Sachs (with respect to 50% of the Zendesk 2023 convertible notes and 20% of the Zendesk 2025 convertible notes) and other counterparties each acting as principal for its own account, consisting of the purchase by Zendesk of capped call options with respect to collectively approximately 4,558,428 shares of Zendesk common stock from the Zendesk 2023 convertible notes and 2,114,712 shares of Zendesk common stock from the Zendesk 2025 convertible notes, the aggregate number of shares of Zendesk common stock underlying the Zendesk convertible notes (at the initial conversion rate of 9.1944 shares of Zendesk common stock per $1,000 in principal amount of Zendesk 2025 convertible notes and of 15.8554 shares of Zendesk common stock per $1,000 in principal amount of Zendesk 2023 convertible notes). The Zendesk 2025 convertible notes had an initial strike price equal to $108.76 per share of Zendesk common stock, subject to an initial cap price of $164.17 per share. The Zendesk 2023 convertible notes had an initial strike price of approximately $63.07 per share of Zendesk common stock and an initial cap price of $95.20 per share of Zendesk common stock. As of January 4, 2022, 100% of the capped call transactions with respect to the Zendesk 2025 convertible notes remain outstanding, with a strike price of approximately $108.76 and a cap price of $164.17 and approximately 26% of the capped call transactions with respect to the Zendesk 2023 convertible notes remain outstanding, with a strike price of approximately $63.07 and a cap price of $95.20.

 

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The capped call transactions were intended to offset a portion of the potential dilutive effect on Zendesk stockholders of the conversion of the Zendesk convertible notes and/or any potential cash payment in excess of the principal amount of the Zendesk convertible notes that Zendesk may make in connection with a cash settlement of the Zendesk convertible notes, up to the cap price. The capped call transactions generally require the capped call counterparties to deliver to Zendesk in respect of each Zendesk convertible note that is surrendered for conversion, a number of shares of Zendesk common stock (and/or in certain circumstances, at Zendesk election, cash) determined based on the excess, if any, of the lower of the cap price and the price of the shares of Zendesk common stock at that time (determined over a period specified in the capped call transactions) over the strike price per share of Zendesk common stock.

The capped call transactions may be adjusted, exercised, cancelled and/or terminated in accordance with their terms in connection with certain events. In particular, under the terms of the capped call transactions, Goldman Sachs and the other counterparties, each acting separately as calculation agent under the capped call transactions to which it is a party, are entitled in certain circumstances to make adjustments on more than one occasion to the terms of such capped call transactions to reflect the economic effect of the announcement of such events (including the merger) on the embedded call options, including if such economic effect is material. In addition, each of Goldman Sachs and the other counterparties may, acting separately as the calculation agent, determining party or otherwise as principal under the capped call transactions to which it is a party, determine such adjustments in respect of such capped call transactions in accordance with their terms, including on or following consummation or abandonment of such events. All actions or exercises of judgment by Goldman Sachs, in its capacity as calculation agent, pursuant to the terms of the capped call transactions to which it is a party must be performed in good faith and a commercially reasonable manner.

As a result of the capped call transactions, the capped call counterparties are expected to have market exposure to the price of the shares of Zendesk common stock. It is the ordinary practice of the capped call counterparties to engage in hedging activities to limit their respective market exposure to the price of the stock underlying privately negotiated equity derivative transactions with issuers of such stock, such as the capped call transactions. In connection with the capped call transactions to which it is a party, Goldman Sachs (and its affiliates) have engaged, and will continue to engage, in accordance with applicable law in hedging and other market transactions (which may include the entering into or unwinding of various derivative transactions with respect to Zendesk common stock) that are generally intended to substantially neutralize Goldman Sachs’ exposure as a result of the capped call transactions to which it is a party to changes in the price of Zendesk common stock. Such hedging activity is at Goldman Sachs’ own risk and may result in a gain or loss to Goldman Sachs that may be greater than or less than the initial expected contractual benefit to Goldman Sachs under the capped call transactions to which it is a party. The amount of any such gain or loss will not be known until the applicable capped call transactions have been exercised, expired or terminated in accordance with their terms and Goldman Sachs shall have completed all of its hedge unwind activities. In accordance with industry practice, Goldman Sachs maintains customary institutional information barriers reasonably designed to prevent the unauthorized disclosure of confidential information by personnel in its Investment Banking Division to the personnel in its Securities Division who are undertaking hedging and other market transactions with respect to Goldman Sachs’ capped call transactions. To mitigate the exposure from the capped call transactions, as of January 4, 2022, Goldman Sachs held a net long economic position of approximately 800,000 shares of Zendesk common stock.

The indentures governing the Zendesk convertible notes and the confirmations containing the terms of the capped call transactions were included as exhibits to Zendesk’s Current Reports on Form 8-K filed with the SEC on June 17, 2020 and March 20, 2018, which contain additional disclosure regarding the Zendesk convertible notes and a description of the capped call transactions. All references in this section to share counts, conversion prices, cap prices and strike prices are subject to adjustment from time to time in accordance with the terms of the confirmations relating to the capped call transactions.

The Zendesk board of directors selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transaction.

 

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Pursuant to an engagement letter dated October 27, 2021, Zendesk engaged Goldman Sachs to act as its financial advisor in connection with the transaction. The engagement letter between Zendesk and Goldman Sachs provides for a transaction fee of approximately $29 million, $4 million of which became payable at announcement of the transaction, and the remainder of which is contingent upon consummation of the transaction. In addition, Zendesk has agreed to reimburse Goldman Sachs for certain of its expenses, including reasonable attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Opinions of Momentive’s Financial Advisors

Opinion of Allen & Company LLC

Momentive has engaged Allen & Company as a financial advisor to Momentive in connection with the merger. In connection with this engagement, Momentive requested that Allen & Company render an opinion to the Momentive board of directors regarding the fairness, from a financial point of view, of the exchange ratio provided for in the merger agreement. On October 28, 2021, at a meeting of the Momentive board of directors held to evaluate the merger, Allen & Company rendered an oral opinion, which was confirmed by delivery of a written opinion dated October 28, 2021, to the Momentive board of directors to the effect that, as of that date and based on and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken described in its opinion, the exchange ratio provided for in the merger agreement was fair, from a financial point of view, to holders of Momentive common stock (other than, to the extent applicable, Zendesk, Merger Sub and their respective affiliates).

The full text of Allen & Company’s written opinion, dated October 28, 2021, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached to this joint proxy statement/prospectus as Annex C and is incorporated by reference herein in its entirety. The description of Allen & Company’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Allen & Company’s opinion. Allen & Company’s opinion and advisory services were intended for the benefit and use of the Momentive board of directors (in its capacity as such) in connection with its evaluation of the exchange ratio from a financial point of view and did not address any other terms, aspects or implications of the merger. Allen & Company’s opinion did not constitute a recommendation as to the course of action that Momentive (or the Momentive board of directors or any committee thereof) should pursue in connection with the merger or otherwise address the merits of the underlying decision by Momentive to engage in the merger, including in comparison to other strategies or transactions that might be available to Momentive or which Momentive might engage in or consider. Allen & Company’s opinion does not constitute advice or a recommendation to any securityholder or other person as to how to vote or act on any matter relating to the merger or otherwise.

Allen & Company’s opinion reflected and gave effect to Allen & Company’s general familiarity with Momentive and the industry in which Momentive and Zendesk operate as well as information that Allen & Company received during the course of its assignment, including information provided by the managements of Momentive and Zendesk in the course of discussions relating to the merger as more fully described below. In arriving at its opinion, Allen & Company neither conducted a physical inspection of the properties or facilities of Momentive, Zendesk or any other entity nor made or obtained any evaluations or appraisals of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise) of Momentive, Zendesk or any other entity, or conducted any analysis concerning the solvency or fair value of Momentive, Zendesk or any other entity. Allen & Company did not investigate, and expressed no opinion or view regarding, any actual or potential litigation, proceedings or claims involving or impacting Momentive, Zendesk or any other entity and Allen & Company assumed, with Momentive’s consent, that there would be no developments with respect to any such matters that would be meaningful in any respect to its analyses or opinion.

In arriving at its opinion, Allen & Company, among other things:

 

   

reviewed the financial terms of a draft, dated October 28, 2021, of the merger agreement;

 

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reviewed certain publicly available historical business and financial information relating to Momentive and Zendesk, including public filings of Momentive and Zendesk, and historical market prices for Momentive common stock and Zendesk common stock;

 

   

reviewed certain financial information relating to Momentive, including certain internal financial forecasts, estimates and other financial and operating data relating to Momentive, provided to or discussed with Allen & Company by the management of Momentive, which are referred to in this section as the “Momentive forecasts;”

 

   

reviewed certain financial information relating to Zendesk, including certain internal financial forecasts, estimates and other financial and operating data relating to Zendesk, provided to or discussed with Allen & Company by the management of Zendesk and as approved and extended per the management of Momentive, which are referred to in this section as the “Zendesk forecasts;”

 

   

held discussions with the respective managements of Momentive and Zendesk relating to the operations, financial condition and prospects of Momentive and Zendesk;

 

   

held discussions with the managements of Momentive and Zendesk as to potential synergies expected by such managements to result from the merger;

 

   

reviewed and analyzed certain publicly available information, including certain stock market data and financial information, relating to selected companies with businesses that Allen & Company deemed generally relevant in evaluating Momentive and Zendesk;

 

   

reviewed and analyzed certain publicly available financial information relating to selected transactions that Allen & Company deemed generally relevant in evaluating the merger; and

 

   

conducted such other financial analyses and investigations as Allen & Company deemed necessary or appropriate for purposes of its opinion.

In rendering its opinion, Allen & Company relied upon and assumed, with Momentive’s consent and without independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information available to Allen & Company from public sources, provided to or discussed with Allen & Company by the managements and other representatives of Momentive and Zendesk or otherwise reviewed by Allen & Company. With respect to the financial forecasts, estimates and other financial and operating data relating to Momentive and Zendesk (as approved and extended, in the case of Zendesk, per the management of Momentive and including, without limitation, as to tax attributes) that Allen & Company was directed to utilize for purposes of its analyses and opinion, Allen & Company was advised by the respective managements of Momentive and Zendesk and Allen & Company assumed, at Momentive’s direction, that such financial forecasts, estimates and other financial and operating data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such managements, as the case may be, as to, and were a reasonable basis upon which to evaluate, the future financial and operating performance of Momentive and Zendesk, the potential synergies expected by the managements of Momentive and Zendesk to result from the merger and the other matters covered thereby. Allen & Company also assumed, with Momentive’s consent, that the financial results, including, without limitation, the potential synergies expected by the management of Momentive and Zendesk to result from the merger, reflected in the financial forecasts, estimates and other financial and operating data utilized in Allen & Company’s analyses would be realized in the amounts and at the times projected. Allen & Company expressed no opinion or view as to any financial forecasts, estimates or other financial or operating data or the assumptions on which they were based.

Allen & Company relied, at Momentive’s direction, upon the assessments of the managements of Momentive and Zendesk as to, among other things, (i) the potential impact on Momentive and Zendesk of certain market, competitive, macroeconomic, seasonal and other conditions, trends and developments in and prospects for, and governmental, regulatory and legislative policies and matters relating to or otherwise affecting, the technology industry, including the software solutions sector thereof, (ii) the respective products and platform solutions,

 

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technology and intellectual property of Momentive and Zendesk (including associated risks), (iii) implications for Momentive and Zendesk and their respective operations of the global COVID-19 pandemic, (iv) existing and future agreements and arrangements involving, and the ability to attract, retain and/or replace, key employees, customers, third-party service providers, partners and other commercial relationships of Momentive and Zendesk, and (v) the ability to integrate the operations of Momentive and Zendesk and to realize the potential synergies expected by the managements of Momentive and Zendesk to result from the merger as contemplated. With Momentive’s consent, Allen & Company assumed that there would be no developments with respect to any such matters that would have an adverse effect on Zendesk, Momentive or the merger (including the contemplated benefits thereof) or that otherwise would be meaningful in any respect to Allen & Company’s analyses or opinion.

Further, Allen & Company’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Allen & Company as of, the date of its opinion. It should be understood that subsequent developments may affect the conclusion expressed in Allen & Company’s opinion and that Allen & Company assumed no responsibility for advising any person of any change in any matter affecting Allen & Company’s opinion or for updating or revising its opinion based on circumstances or events occurring after the date of such opinion. As the Momentive board of directors was aware, the credit, financial and stock markets, the industry in which Momentive and Zendesk operate and the securities of Momentive and Zendesk have experienced and may continue to experience volatility and Allen & Company expressed no opinion or view as to any potential effects of such volatility on Momentive, Zendesk or the merger (including the contemplated benefits thereof).

Allen & Company assumed, with Momentive’s consent, that the merger would be consummated in accordance with its terms and in compliance with all applicable laws, documents and other requirements, without waiver, modification or amendment of any material term, condition or agreement, and that, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers, decrees and agreements for the merger, no delay, limitation, restriction or condition, including any divestiture or other requirements or remedies, amendments or modifications, would be imposed or occur that would have an adverse effect on Momentive, Zendesk or the merger (including the contemplated benefits thereof) that would be meaningful in any respect to Allen & Company’s analyses or opinion. Allen & Company also assumed, with Momentive’s consent, that the merger would qualify for U.S. federal income tax purposes as a reorganization within the meaning of Section 368 of the Code and would otherwise qualify, as applicable, for the intended tax treatment contemplated by the merger agreement. In addition, Allen & Company assumed, with Momentive’s consent, that the final executed merger agreement would not differ from the draft reviewed by Allen & Company in any respect meaningful to its analyses or opinion.

Allen & Company’s opinion was limited to the fairness, from a financial point of view and as of the date of such opinion, of the exchange ratio (to the extent expressly specified in such opinion), without regard to individual circumstances of specific holders of Momentive common stock (whether by virtue of control, voting, liquidity, contractual arrangements or otherwise) that may distinguish such holders or the securities of Momentive held by such holders, and Allen & Company’s opinion did not in any way address proportionate allocation or relative fairness. Allen & Company’s opinion also did not address any other terms, aspects or implications of the merger, including, without limitation, the form or structure of the merger, any voting agreement or any other agreements, arrangements or understandings entered into in connection with, related to or contemplated by the merger or otherwise. Allen & Company expressed no opinion or view as to the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation or other consideration payable to any officers, directors or employees of any party to the merger or any related entities, or any class of such persons or any other party, relative to the exchange ratio or otherwise. Allen & Company did not express any opinion or view as to the actual value of Zendesk common stock when issued in the merger or the prices at which Zendesk common stock or any other securities of Zendesk, or any securities of Momentive, may trade or otherwise be transferable at any time, including following announcement or consummation of the merger. In addition, Allen & Company expressed no opinion or view with respect to accounting, tax, regulatory, legal or similar matters, including, without limitation, as to tax or other consequences of the merger or otherwise or changes in, or the impact of, accounting standards,

 

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tax and other laws, regulations and governmental and legislative policies affecting Momentive, Zendesk or the merger (including the contemplated benefits thereof), and Allen & Company relied, at Momentive’s direction, upon the assessments of representatives of Momentive as to such matters. Allen & Company’s opinion did not constitute a recommendation as to the course of action that Momentive (or the Momentive board of directors or any committee thereof) should pursue in connection with the merger or otherwise address the merits of the underlying decision by Momentive to engage in the merger, including in comparison to other strategies or transactions that might be available to Momentive or which Momentive might engage in or consider.

In connection with its opinion, Allen & Company performed a variety of financial and comparative analyses, including those described below. The summary of the analyses below and certain factors considered is not a comprehensive description of all analyses undertaken or factors considered by Allen & Company. The preparation of a financial opinion or analysis is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion and analyses are not readily susceptible to summary description. Allen & Company arrived at its opinion based on the results of all analyses undertaken and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis. Accordingly, Allen & Company believes that the analyses and factors summarized below must be considered as a whole and in context. Allen & Company further believes that selecting portions of the analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses and factors, could create a misleading or incomplete view of the processes underlying Allen & Company’s analyses and opinion.

In performing its financial analyses, Allen & Company considered industry performance, general business and economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of Momentive and Zendesk. No company, business or transaction reviewed is identical or directly comparable to Momentive or Zendesk, their respective businesses or the merger and an evaluation of these analyses is not entirely mathematical; rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies, businesses or transactions reviewed. The estimates of the future performance of Momentive and Zendesk in or underlying Allen & Company’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by such analyses. These analyses were prepared solely as part of Allen & Company’s analysis of the fairness, from a financial point of view, of the exchange ratio and were provided to the Momentive board of directors in connection with the delivery of Allen & Company’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the assumptions and estimates used in, and the reference ranges resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as the views of Allen & Company regarding the actual value of Momentive and Zendesk.

Allen & Company did not recommend that any specific consideration constituted the only appropriate consideration in the merger. The type and amount of consideration payable in the merger was determined through negotiations between Momentive and Zendesk, rather than by any financial advisor, and was approved by the Momentive board of directors. The decision to enter into the merger agreement was solely that of the Momentive board of directors. Allen & Company’s opinion and analyses were only one of many factors considered by the Momentive board of directors in its evaluation of the merger and the exchange ratio and should not be viewed as determinative of the views of the Momentive board of directors or management with respect to the merger or the exchange ratio provided for in the merger agreement.

Financial Analysis

The summary of the financial analyses described in this section titled “—Financial Analysis” is a summary of the material financial analyses provided by Allen & Company in connection with its opinion, dated October 28,

 

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2021, to the Momentive board of directors. The summary set forth below is not a comprehensive description of all analyses undertaken by Allen & Company in connection with its opinion, nor does the order of the analyses in the summary below indicate that any analysis was given greater weight than any other analysis. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by Allen & Company, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by Allen & Company. Considering the data set forth in the tables 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 the financial analyses performed by Allen & Company. Future results may differ from those described and such differences may be material. Approximate implied per share equity value reference ranges derived from the financial analyses described below and discounted Wall Street research analysts’ stock price targets were rounded to the nearest $0.25. Except as otherwise noted, financial data utilized for Momentive and Zendesk in the financial analyses described below were based on the Momentive forecasts and the Zendesk forecasts, respectively.

In calculating implied exchange ratio reference ranges as reflected in the financial analyses described below, Allen & Company divided the low-ends (or high-ends, as the case may be) of the approximate implied per share equity value reference ranges derived for Momentive from such analyses by the high-ends (or low-ends, as the case may be) of the approximate implied per share equity value reference ranges derived for Zendesk from such analyses in order to calculate the low-ends (or high-ends, as the case may be) of the implied exchange ratio reference ranges.

Selected Public Companies Analyses. Allen & Company performed separate selected public companies analyses of Momentive and Zendesk in which Allen & Company reviewed certain financial and stock market information relating to Momentive, Zendesk and the selected publicly traded companies listed below.

Momentive. In its selected public companies analysis of Momentive, Allen & Company reviewed certain financial and stock market information relating to Momentive and the following 11 selected publicly traded companies with operations in the software industry and business and financial profiles that Allen & Company considered generally relevant for purposes of analysis, consisting of the following six companies, which are referred to in this section as the “Momentive selected business profile companies,” and the following five companies, which are referred to in this section as the “Momentive selected financial profile companies” and, together with the Momentive selected business profile companies, collectively, the “Momentive selected companies:”

 

Momentive Selected

Business Profile Companies

  

Momentive Selected

Financial Profile Companies

•  Dropbox, Inc.

•  GoDaddy Inc.

•  LiveRamp Holdings, Inc.

•  Pegasystems Inc.

•  Sprinklr, Inc.

•  Wix.com Ltd.

  

•  8x8, Inc.

•  Datto Holding Corp.

•  Domo, Inc.

•  Sumo Logic, Inc.

•  Zendesk, Inc.

Allen & Company reviewed, among other information, enterprise values, calculated as implied equity values based on closing stock prices on October 27, 2021 plus total debt, preferred equity and non-controlling interests (as applicable) and less cash and cash equivalents and unconsolidated assets, as a multiple of calendar year 2022 estimated revenue. Financial data of the Momentive selected companies were based on publicly available Wall Street research analysts’ estimates, public filings and other publicly available information. Financial data of Momentive was based on the Momentive forecasts, Wall Street research analysts’ estimates as of October 5, 2021 (one trading day prior to Legion Partners Asset Management’s public announcement, among other things,

 

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calling for Momentive to engage in a strategic review process, including a sale of Momentive), public filings and other publicly available information.

The overall low to high calendar year 2022 estimated revenue multiples observed for the Momentive selected business profile companies and the Momentive selected financial profile companies were 3.6x and 7.9x (with a mean of 6.1x and a median of 6.2x) and 4.4x to 11.2x (with a mean of 7.7x and a median of 8.3x), respectively. Allen & Company noted that the calendar year 2022 estimated revenue multiple observed for Momentive based on Wall Street research analysts’ estimates (as of October 5, 2021) was 5.8x. Allen & Company then applied a selected range of calendar year 2022 estimated revenue multiples derived from the Momentive selected companies of 6.0x to 8.5x to corresponding data of Momentive based on the Momentive forecasts. This analysis indicated an approximate implied equity value reference range for Momentive of $21.00 to $29.00 per share.

Zendesk. In its selected public companies analysis of Zendesk, Allen & Company reviewed certain financial and stock market information relating to Zendesk and the following nine publicly traded companies with operations in the software industry that Allen & Company considered generally relevant for purposes of analysis, which are referred to in this section as the “Zendesk selected companies:”

 

   

Ceridian HCM Holding Inc.

   

Everbridge, Inc.

   

LivePerson, Inc.

   

Momentive Global Inc.

   

PagerDuty, Inc.

   

RingCentral, Inc.

   

salesforce.com, inc.

   

Sprinklr, Inc.

   

Workday, Inc.

Allen & Company reviewed, among other information, enterprise values, calculated as implied equity values based on closing stock prices on October 27, 2021 plus total debt, preferred equity and non-controlling interests (as applicable) and less cash and cash equivalents and unconsolidated assets, as a multiple of calendar year 2022 estimated revenue. Financial data of the Zendesk selected companies were based on publicly available Wall Street research analysts’ estimates, public filings and other publicly available information (in the case of Momentive, unaffected as of October 5, 2021). Financial data of Zendesk was based on the Zendesk forecasts, Wall Street research analysts’ estimates, public filings and other publicly available information.

The overall low to high calendar year 2022 estimated revenue multiples observed for the Zendesk selected companies were 5.8x and 17.6x (with a mean of 10.9x and a median of 11.2x). Allen & Company noted that the calendar year 2022 estimated revenue multiple observed for Zendesk based on Wall Street research analysts’ estimates was 9.5x. Allen & Company then applied a selected range of calendar year 2022 estimated revenue multiples derived from the Zendesk selected companies of 8.0x to 12.0x to corresponding data of Zendesk based on the Zendesk forecasts. This analysis indicated an approximate implied equity value reference range for Zendesk of $107.50 to $159.00 per share.

Utilizing the approximate implied per share equity value reference ranges derived for Momentive and Zendesk described above, Allen & Company calculated the following approximate implied exchange ratio reference range, as compared to the exchange ratio:

 

Implied Exchange Ratio Reference Range    Exchange Ratio

 

  

 

0.132x – 0.270x    0.225x

 

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Selected Precedent Transactions Analysis. Using publicly available information, Allen & Company reviewed financial data relating to the following 12 selected transactions involving target companies with operations in the software industry that Allen & Company considered generally relevant for purposes of analysis, which are referred to in this section as the “Momentive selected transactions:”

 

Announcement Date

 

Acquiror

 

Target

July 2021  

•  Thoma Bravo, L.P.

 

•  Medallia, Inc.

April 2021  

•  Thoma Bravo, L.P.

 

•  Proofpoint, Inc.

March 2021  

•  Thoma Bravo, L.P.

 

•  Talend S.A.

December 2020  

•  Thoma Bravo, L.P.

 

•  RealPage, Inc.

December 2020  

•  Vista Equity Partners Management, LLC

 

•  Pluralsight, Inc.

December 2019  

•  Thoma Bravo, L.P.

 

•  Instructure Holdings, Inc.

February 2019  

•  Hellman & Friedman LLC

 

•  The Ultimate Software Group, Inc.

December 2018  

•  Vista Equity Partners Management, LLC

 

•  MINDBODY, Inc.

November 2018  

•  Vista Equity Partners Management, LLC

 

•  Apptio, Inc.

October 2018  

•  Twilio Inc.

 

•  SendGrid, Inc.

September 2018  

•  Adobe Inc.

 

•  Marketo, Inc.

January 2018  

•  SAP SE

 

•  Callidus Software Inc.

Allen & Company reviewed, among other information, transaction values of the Momentive selected transactions, calculated as the enterprise values implied for the target companies involved in the Momentive selected transactions based on the consideration paid or payable in the Momentive selected transactions as a multiple of the next 12 months estimated revenue of the target company as of the applicable announcement date of such transaction. Financial data for the Momentive selected transactions were based on publicly available Wall Street research analysts’ estimates, public filings and other publicly available information. Financial data of Momentive was based on the Momentive forecasts, public filings and other publicly available information.

The overall low to high next 12 months estimated revenue multiples observed for the Momentive selected transactions were 6.5x to 10.9x (with a median of 7.9x). Allen & Company then applied a selected range of next 12 months estimated revenue multiples derived from the Momentive selected transactions of 7.5x to 11.0x to corresponding data (as of September 30, 2021) of Momentive based on the Momentive forecasts. This analysis indicated an approximate implied equity value reference range for Momentive of $25.00 to $35.75 per share, as compared to the implied price for Momentive common stock of $27.60 per share based on the exchange ratio and the closing price for Zendesk common stock on October 27, 2021.

Discounted Cash Flow Analyses. Allen & Company performed separate discounted cash flow analyses of Momentive and Zendesk as described below.

Momentive. Allen & Company performed a discounted cash flow analysis of Momentive by calculating, based on the Momentive forecasts, the estimated present value of the standalone unlevered, after-tax free cash flows that Momentive was forecasted to generate during the fiscal years ending December 31, 2021 through December 31, 2031. For purposes of this analysis, stock-based compensation was treated as a cash expense. Allen & Company calculated implied terminal values for Momentive by applying to Momentive’s unlevered, after-tax free cash flows for the fiscal year ending December 31, 2031 a selected range of perpetuity growth rates of 3.0% to 3.5%. The present values (as of September 30, 2021) of the cash flows and terminal values were then calculated using a selected range of discount rates of 8.0% to 9.25%. This analysis indicated an approximate implied equity value reference range for Momentive of $25.25 to $36.25 per share.

Zendesk. Allen & Company performed a discounted cash flow analysis of Zendesk by calculating, based on the Zendesk forecasts, the estimated present value of the standalone unlevered, after-tax free cash flows that Zendesk was forecasted to generate during the fiscal years ending December 31, 2021 through December 31, 2031. For purposes of this analysis, stock-based compensation was treated as a cash expense. Allen & Company calculated

 

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implied terminal values for Zendesk by applying to Zendesk’s unlevered, after-tax free cash flows for the fiscal year ending December 31, 2031 a selected range of perpetuity growth rates of 3.0% to 3.5%. The present values (as of September 30, 2021) of the cash flows and terminal values were then calculated using a selected range of discount rates of 7.25% to 8.5%. This analysis indicated an approximate implied equity value reference range for Zendesk of $131.75 to $200.25 per share.

Utilizing the approximate implied per share equity value reference ranges derived for Momentive and Zendesk described above, Allen & Company calculated the following implied exchange ratio reference range, as compared to the exchange ratio:

 

Implied Exchange Ratio Reference Range    Exchange Ratio

 

  

 

0.126x – 0.275x    0.225x

Illustrative Theoretical Pro Forma Value Creation. Allen & Company reviewed an illustrative theoretical pro forma value creation for holders of Momentive common stock that could result from the merger based on the midpoint of the implied per share equity value reference range for Momentive derived from the discounted cash flow analysis of Momentive described above in this section under “—Discounted Cash Flow AnalysisMomentive” and the midpoint of the implied per share equity value reference range for Zendesk derived from the discounted cash flow analysis of Zendesk described above in this section under “—Discounted Cash Flow AnalysisZendesk,” after taking into account, among other things, cash flows from the potential synergies expected by the managements of Momentive and Zendesk to result from the merger. This review indicated an approximate illustrative theoretical implied equity value for the combined company of $37.45 per share as compared to the midpoint of the implied per share equity value reference range for Momentive referred to above in this section under “—Discounted Cash Flow AnalysisMomentive” of $30.71 per share. The foregoing was reviewed for illustrative and hypothetical purposes only and was not intended as indicative of actual future trading prices or other results which may vary based on various factors, including market conditions and financial performance.

Certain Additional Information

Allen & Company observed certain additional information that was not considered part of its financial analyses for its opinion but was noted for informational reference, including the following:

 

   

historical closing prices of Momentive common stock and Zendesk common stock during the 52-week period ended October 27, 2021, which indicated low to high closing prices of Momentive common stock of $16.96 per share to $27.88 per share, respectively, and low to high closing prices of Zendesk common stock of $104.12 per share to $158.00 per share, respectively, and implied exchange ratios of Momentive common stock and Zendesk common stock during such 52-week period based on such observed closing prices, which indicated an approximate implied exchange ratio reference range of 0.107x to 0.268x; and

 

   

publicly available Wall Street research analysts’ price targets for Momentive common stock and Zendesk common stock, which indicated an overall low to high target price range for Momentive common stock of $23.00 to $30.00 per share, implying a range of approximately $21.00 to $27.25 per share on a discounted basis (discounted one year using a selected discount rate of 9.75%), and an overall low to high target price range for Zendesk common stock of $153.00 to $193.00 per share, implying a range of approximately $140.25 to $177.00 per share on a discounted basis (discounted one year using a selected discount rate of 9.0%), and the exchange ratios implied by such stock price targets, which indicated an implied exchange ratio reference range of 0.119x to 0.194x.

Miscellaneous

Momentive selected Allen & Company as its financial advisor in connection with the merger based on, among other things, Allen & Company’s reputation, experience and general familiarity with Momentive and the industry

 

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in which Momentive and Zendesk operate. Allen & Company, as part of its investment banking business, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, private placements and related financings, bankruptcy reorganizations and similar recapitalizations, negotiated underwritings, secondary distributions of listed and unlisted securities, and valuations for corporate and other purposes. As the Momentive board of directors was aware, although during the two-year period prior to the date of its opinion Allen & Company did not provide investment banking services to Momentive unrelated to the merger or to Zendesk for which Allen & Company received compensation, Allen & Company in the future may provide such services to Momentive, Zendesk and/or their respective affiliates, for which Allen & Company would expect to receive compensation. In the ordinary course, Allen & Company as a broker-dealer and certain of its affiliates, directors and officers have invested or may invest, hold long or short positions and may trade, either on a discretionary or non-discretionary basis, for their own or beneficiaries’ accounts or for those of Allen & Company’s clients, in the debt and equity securities (or related derivative securities) of Momentive, Zendesk and/or their respective affiliates. The issuance of Allen & Company’s opinion was approved by Allen & Company’s opinion committee.

For Allen & Company’s financial advisory services, Momentive has agreed to pay Allen & Company an aggregate cash fee, based on the exchange ratio and the closing price of Zendesk common stock on October 27, 2021 (the last trading day prior to public announcement of the merger), of approximately $24 million, of which a portion was payable upon delivery of Allen & Company’s opinion and approximately $21 million is payable contingent upon consummation of the merger. Momentive also agreed to reimburse Allen & Company’s reasonable expenses and to indemnify Allen & Company and related parties against certain liabilities, including liabilities under the federal securities laws, arising out of its engagement.

Opinion of J.P. Morgan Securities LLC

Pursuant to an engagement letter, Momentive retained J.P. Morgan Securities LLC, which is referred to as “J.P. Morgan,” as a financial advisor in connection with the merger.

At the meeting of the Momentive board of directors on October 28, 2021, J.P. Morgan rendered its oral opinion to the Momentive board of directors that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Momentive common stockholders. J.P. Morgan confirmed its October 28, 2021 oral opinion by delivering its written opinion to the Momentive board of directors, dated October 28, 2021, that, as of such date, the exchange ratio in the proposed merger was fair, from a financial point of view, to such stockholders.     

The full text of the written opinion of J.P. Morgan dated October 28, 2021, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex D to this joint proxy statement/prospectus and is incorporated by reference herein. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Momentive stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the Momentive board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the merger, was directed only to the exchange ratio in the merger and did not address any other aspect of the merger. J.P. Morgan expressed no opinion as to the fairness of the exchange ratio to the holders of any other class of securities, creditors or other constituencies of Momentive or as to the underlying decision by Momentive to engage in the merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. The opinion does not constitute a recommendation to any stockholder of Momentive as to how such stockholder should vote with respect to the merger or any other matter.

In arriving at its opinion, J.P. Morgan, among other things:

 

   

reviewed a draft dated October 28, 2021 of the merger agreement;

 

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reviewed certain publicly available business and financial information concerning Momentive and Zendesk and the industries in which they operate;

 

   

compared the proposed financial terms of the merger with the publicly available financial terms of certain transactions involving companies J.P. Morgan deemed relevant and the consideration received for such companies;

 

   

compared the financial and operating performance of Momentive and Zendesk with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of Momentive common stock and Zendesk common stock and certain publicly traded securities of such other companies;

 

   

reviewed certain internal financial analyses and forecasts prepared by the managements of Momentive and Zendesk relating to their respective businesses, as well as the estimated amount and timing of cost savings and related expenses and synergies expected to result from the merger, which are referred to as the “estimated synergies” in this section titled “—Opinion of J.P. Morgan Securities LLC”; and

 

   

performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.

In addition, J.P. Morgan held discussions with certain members of Momentive management and Zendesk management with respect to certain aspects of the merger, and the past and current business operations of Momentive and Zendesk, the financial condition and future prospects and operations of Momentive and Zendesk, the effects of the merger on the financial condition and future prospects of Momentive and Zendesk, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by Momentive and Zendesk or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (and did not assume responsibility or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan did not conduct or was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of Momentive, Zendesk or Merger Sub under any applicable laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, including the estimated synergies, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of Momentive and Zendesk to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts (including the estimated synergies) or the assumptions on which they were based. J.P. Morgan also assumed that the merger and the other transactions contemplated by the merger agreement will qualify as a tax-free reorganization for United States federal income tax purposes and will be consummated as described in the merger agreement, and that the definitive merger agreement would not differ in any material respects from the draft thereof furnished to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by Momentive and Zendesk in the merger agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to Momentive with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on Momentive or Zendesk or on the contemplated benefits of the merger.

The projections furnished to J.P. Morgan were prepared by Momentive management. Momentive does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of Momentive management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from

 

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those set forth in such projections. For more information regarding the use of projections and other forward-looking statements, see the section titled “—Momentive Unaudited Financial Projections.”

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion, and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the exchange ratio in the merger, and J.P. Morgan has expressed no opinion as to the fairness of any consideration to the holders of any other class of securities, creditors or other constituencies of Momentive or the underlying decision by Momentive to engage in the merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the merger, or any class of such persons relative to the exchange ratio in the merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which Momentive common stock or Zendesk common stock will trade at any future time.

The terms of the merger agreement, including the exchange ratio, were determined through arm’s length negotiations between Momentive and Zendesk, and the decision to enter into the merger agreement was solely that of the Momentive board of directors. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the Momentive board of directors in its evaluation of the merger and should not be viewed as determinative of the views of the Momentive board of directors or management with respect to the merger or the exchange ratio.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodology in rendering its opinion to the Momentive board of directors on October 28, 2021 and contained in the presentation delivered to the Momentive board of directors on such date in connection with the rendering of such opinion and does not purport to be a complete description of the analyses or data presented by J.P. Morgan. 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 J.P. Morgan, 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 J.P. Morgan’s analyses.

Momentive Analysis

Public Trading Multiples Analysis

Using publicly available information, J.P. Morgan compared selected financial data of Momentive with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be analogous to the business of Momentive. These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analyses, may be considered sufficiently similar to those of Momentive based on business sector participation, operational characteristics and financial metrics. However, none of the selected companies reviewed is identical to Momentive and certain of these companies have financial and operating characteristics that are materially different from those of Momentive. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect Momentive.

 

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With respect to the selected companies, J.P. Morgan calculated the ratio of firm value to revenue for each company based on publicly available financial information and Wall Street estimates per FactSet Research Systems and Capital IQ as of October 27, 2021 for the calendar year 2022, which is referred to as “FV / CY22E Revenue.” The results of this analysis are indicated in the following table:

 

Selected Company   

FV / CY22E

Revenue

 

8x8 Inc.

     4.4x  

Datto Holding Corp.

     5.4x  

Domo, Inc.

     11.2x  

Dropbox, Inc.

     5.3x  

GoDaddy Inc.

     3.6x  

LiveRamp Holdings, Inc.

     5.4x  

Momentive Global Inc.(1)

     5.8x  

Pegasystems Inc.

     7.4x  

Sprinklr, Inc.

     7.9x  

Sumo Logic, Inc.

     8.3x  

Wix.com Ltd.

     7.0x  

Zendesk, Inc.

     9.5x  

 

(1)

Based on unaffected closing share price as of October 5, 2021.

Based on the results of the above analysis and on other factors J.P. Morgan considered appropriate, J.P. Morgan selected a FV / CY22E Revenue multiple reference range for Momentive of 6.0x to 8.5x. J.P. Morgan then applied that range to the estimated revenue for Momentive for calendar year 2022, provided by Momentive management, of $540 million, which was adjusted by adding Momentive’s net cash balance of approximately $87 million as of September 30, 2021. This analysis indicated a range of implied equity values per share of Momentive common stock, rounded to the nearest $0.25, of $21.00 to $29.00, which was compared to the unaffected closing price per share of Momentive common stock of $19.91 on October 5, 2021.

Selected Transaction Multiples Analysis

Using publicly available information, J.P. Morgan examined selected transactions involving companies that engaged in businesses that J.P. Morgan judged to be reasonably analogous to the business of Momentive or aspects thereof. None of the selected transactions reviewed was identical to the merger. Certain of these transactions may have characteristics that are materially different from those of the merger. However, the selected transactions were chosen because certain aspects of the transactions, for purposes of J.P. Morgan’s analysis, may be considered similar to the merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the transactions differently than they would affect the merger. For each of the

 

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selected transactions, J.P. Morgan calculated the ratio of the target company’s firm value to the public estimates of revenue for the 12-month period following the announcement of the applicable transaction, which is referred to as “FV / NTM Revenue.” Specifically, J.P. Morgan reviewed the following transactions:

 

Announcement

Date

  

Acquiror

  

Target

   FV / NTM
Revenue
July, 2021    Thoma Bravo, L.P.    Medallia, Inc.    10.7x
April, 2021    Thoma Bravo, L.P.    Proofpoint, Inc.    9.9x
March, 2021    Thoma Bravo, L.P.    Talend S.A.    7.4x
December, 2020    Thoma Bravo, L.P.    RealPage, Inc.    8.3x
December, 2020    Vista Equity Partners Management, LLC    Pluralsight, Inc.    7.9x
December, 2019    Thoma Bravo, L.P.    Instructure, Inc.    6.5x
February, 2019    Hellman & Friedman LLC    The Ultimate Software Group, Inc.    7.9x
December, 2018    Vista Equity Partners Management, LLC    MINDBODY, Inc.    6.6x
November, 2018    Vista Equity Partners Management, LLC    Apptio, Inc.    7.0x
October, 2018    Twilio Inc.    SendGrid, Inc.    10.9x
September, 2018    Adobe Inc.    Marketo, Inc.    10.3x
January, 2018    SAP SE    Callidus Software Inc.    7.8x

Based on the results of this analysis and other factors J.P. Morgan considered appropriate, J.P. Morgan selected a FV / NTM Revenue multiple reference range of 7.5x to 11.0x. J.P. Morgan then applied that reference range to the NTM Revenue for Momentive, which was adjusted by adding Momentive’s net cash balance of approximately $87 million as of September 30, 2021. This analysis indicated a range of implied equity values per share of Momentive common stock, rounded to the nearest $0.25, of $25.00 to $35.75, which was compared to the unaffected closing price per share of Momentive common stock of $19.91 on October 5, 2021.

Discounted Cash Flow Analysis

J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining the fully diluted equity value per share for Momentive common stock on a standalone basis. A discounted cash flow analysis is a method of evaluating an asset using estimates of the future unlevered free cash flows generated by an asset and taking into consideration the time value of money with respect to such future cash flows by calculating their present value. Unlevered free cash flow refers to a calculation of the future cash flows generated by an asset without including in such calculation any debt servicing costs. The current value of the future cash flows generated by an asset obtained by discounting those future cash flows back to the present using an appropriate discount rate is referred to as the “present value” in this section titled “—Opinion of J.P. Morgan Securities LLC.” The present value of all future cash flows generated by an asset for periods beyond the projections period is referred to as the “terminal value” in this section titled “—Opinion of J.P. Morgan Securities LLC.”

J.P. Morgan calculated the unlevered free cash flows that Momentive is expected to generate during the remainder of fiscal year 2021 through fiscal year 2031 based upon certain unaudited prospective financial projections prepared by Momentive management. J.P. Morgan also calculated a range of terminal values for Momentive by applying terminal growth rates ranging from 3.0% to 4.0% to the unlevered free cash flows of Momentive at the end of fiscal year 2031. The unlevered free cash flows and the range of terminal values were then discounted to present values using a discount rate range of 9.0% to 10.0%, which was chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of Momentive. The present value of the unlevered free cash flows and the range of terminal values were then adjusted by adding Momentive’s net cash balance of approximately $87 million as of September 30, 2021 and divided by Momentive’s fully diluted shares outstanding (calculated using the treasury stock method).

 

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Based on the results of this analysis, J.P. Morgan arrived at a range of implied equity values per share for Momentive common stock, rounded to the nearest $0.25, of $24.25 to $33.75, which was compared to the unaffected closing price per share of Momentive common stock of $19.91 on October 5, 2021.

Zendesk Analysis

Public Trading Multiples Analysis

Using publicly available information, J.P. Morgan compared selected financial data of Zendesk with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be analogous to the business of Zendesk. These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analyses, may be considered sufficiently similar to those of Zendesk based on business sector participation, operational characteristics and financial metrics. However, none of the selected companies reviewed is identical to Zendesk and certain of these companies have financial and operating characteristics that are materially different from those of Zendesk. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect Zendesk.

With respect to the selected companies, J.P. Morgan calculated the FV / CY22E Revenue. The results of this analysis are indicated in the following table:

 

Selected Company    FV / CY22E
Revenue
 

Ceridian HCM Holding Inc.

     17.6x  

Everbridge, Inc.

     14.1x  

LivePerson, Inc.

     7.0x  

Momentive Global Inc.(1)

     5.8x  

PagerDuty, Inc.

     11.2x  

RingCentral, Inc.

     12.5x  

salesforce.com, inc.

     9.6x  

Sprinklr, Inc.

     7.9x  

Workday, Inc.

     12.5x  

Zendesk, Inc.

     9.5x  

 

(1)

Based on unaffected closing share price as of October 5, 2021.

Based on the results of the above analysis and on other factors J.P. Morgan considered appropriate, J.P. Morgan selected a FV / CY22E Revenue multiple reference range for Zendesk of 8.0x to 12.0x. J.P. Morgan then applied that range to the estimated revenue for Zendesk for calendar year 2022, provided by Momentive management, of $1.695 billion, which was adjusted by adding Zendesk’s net cash balance of approximately $246 million as of September 30, 2021. This analysis indicated a range of implied equity values per share of Zendesk common stock, rounded to the nearest $0.25, of $107.50 to $159.00, which was compared to the closing price per share of Zendesk common stock of $122.66 on October 27, 2021.

Discounted Cash Flow Analysis

J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining the implied fully diluted equity value per share of Zendesk common stock on a standalone basis.

J.P. Morgan calculated the unlevered free cash flows that Zendesk is expected to generate during the remainder of fiscal year 2021 through fiscal year 2031 based upon certain unaudited prospective financial projections prepared by Momentive management. J.P. Morgan also calculated a range of terminal values for Zendesk by

 

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applying terminal growth rates ranging from 3.0% to 4.0% to the unlevered free cash flows of Zendesk at the end of fiscal year 2031. The unlevered free cash flows and the range of terminal values were then discounted to present values using a discount rate range of 8.25% to 9.25%, which was chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of Zendesk. The present value of the unlevered free cash flows and the range of terminal values were then adjusted by adding Zendesk’s net cash balance of approximately $246 million as of September 30, 2021 and divided by Zendesk’s fully diluted shares outstanding (calculated using the treasury stock method).

Based on the foregoing, this analysis indicated a range of implied equity values per share for Zendesk common stock, rounded to the nearest $0.25, of $124.50 to $182.75, which was compared to the closing price per share of Zendesk common stock on October 27, 2021 of $122.66.

Relative Valuation Exchange Ratio Analysis

Public Trading Multiples Analysis

J.P. Morgan compared the results of its public trading multiples analysis for Momentive to the results for Zendesk with respect to the FV / CY22E Revenue multiples described above in the section titled “—Momentive Analysis—Public Trading Multiples Analysis” and “—Zendesk Analysis—Public Trading Multiples Analysis” to determine a range of implied exchange ratios. Specifically, J.P. Morgan compared (i) the highest implied equity value per share for Momentive to the lowest implied equity value per share for Zendesk, and (ii) the lowest implied equity value per share for Momentive to the highest implied equity value per share for Zendesk, to derive a range of exchange ratios implied by the public trading multiples analysis. This analysis resulted in a range of implied exchange ratios of 0.132x to 0.270x, which was compared to the unaffected exchange ratio of 0.178x (based on Momentive’s unaffected closing price, and Zendesk’s closing price, on October 5, 2021) and the exchange ratio in the merger of 0.225x.

Discounted Cash Flow Analysis

J.P. Morgan compared the results with respect to its discounted cash flow analyses for Momentive, as described above in the section titled “—Momentive Analysis—Discounted Cash Flow Analysis,” to the results for Zendesk, as described above in the section titled “—Zendesk Analysis—Discounted Cash Flow Analysis,” to determine a range of implied exchange ratios. Specifically, J.P. Morgan compared (i) the highest implied equity value per share for Momentive to the lowest implied equity value per share for Zendesk, and (ii) the lowest implied equity value per share for Momentive to the highest implied equity value per share for Zendesk, to derive a range of exchange ratios implied by the discounted cash flow analyses. This analysis resulted in a range of implied exchange ratios of 0.133x to 0.271x, which was compared to the unaffected exchange ratio of 0.178x (based on Momentive’s unaffected closing price, and Zendesk’s closing price, on October 5, 2021) and the exchange ratio in the merger of 0.225x.

Value Creation Analysis—Intrinsic (DCF) Based Approach

J.P. Morgan conducted an illustrative value creation analysis that compared the implied equity value of Momentive common stock derived from a discounted cash flow valuation of Momentive on a standalone basis to the value of Momentive common stockholders’ pro forma ownership of the implied equity value of the combined company. The pro forma implied equity value of the combined company was calculated as the sum of: (i) the standalone implied equity value of Momentive using the midpoint value determined in J.P. Morgan’s discounted cash flow analysis described above in the section titled “—Momentive Analysis—Discounted Cash Flow Analysis,” plus (ii) the standalone implied equity value of Zendesk using the midpoint value determined in J.P. Morgan’s discounted cash flow analysis described above in the section titled “—Zendesk Analysis—Discounted Cash Flow Analysis,” plus (iii) the present value of the cash flows from the potential synergies expected by Momentive management to result from the merger using a discount rate of 9.5% and a terminal value growth rate

 

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of 3.5%. J.P. Morgan then determined the implied pro forma equity value of the combined company attributable to Momentive common stockholders based on the equity ownership percentage of the combined company to be owned by Momentive common stockholders of approximately 22% (on a fully diluted basis) implied by the exchange ratio provided for in the merger agreement. This analysis indicated an implied equity value per share to holders of Momentive common stock of $35.50, and that the exchange ratio yielded value accretion to holders of Momentive common stock of $1.15 billion. There can be no assurance, however, that the estimated synergies or estimated costs to achieve such synergies will not be substantially greater or less than Momentive management’s estimates.

Other Information

52-Week Historical Trading Range

For reference only and not as a component of its fairness analyses, J.P. Morgan reviewed the trading price range for Momentive common stock and Zendesk common stock for the 52-week period ending October 27, 2021. J.P. Morgan noted that the low and high closing share prices during this period for Momentive common stock were $16.96 and $27.88 per share, and that the low and high closing share prices during this period for Zendesk common stock were $104.12 and $158.00 per share. J.P. Morgan then compared the highest and lowest prices per share of Momentive common stock with the lowest and highest prices per share of Zendesk common stock to derive a range of implied exchange ratios of 0.107x to 0.268x.

Discounted Equity Research Analyst Price Targets

For reference purposes only and not as a component of its fairness analyses, J.P. Morgan reviewed certain publicly available equity research analyst share price targets for Momentive common stock and Zendesk common stock. J.P. Morgan noted that the range of such price targets for Momentive common stock, rounded to the nearest $0.25, was $21.00 to $27.25 per share and that the price targets for Zendesk common stock, rounded to the nearest $0.25, was $140.25 to $177.00 per share, in each case discounted one year at cost of equity of 9.75% and 9.0%, respectively. J.P. Morgan then compared the highest and lowest discounted share price targets for Momentive common stock with the lowest and highest discounted share price targets for Zendesk common stock to derive a range of implied exchange ratios of 0.119x to 0.194x.

Miscellaneous

The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of Momentive or Zendesk. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be

 

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appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary is identical to Momentive or Zendesk, and none of the selected transactions reviewed was identical to the merger. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of Momentive and Zendesk. The transactions selected were similarly chosen because their participants, size and other factors, for purposes of J.P. Morgan’s analysis, may be considered similar to the merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to Momentive and Zendesk and the transactions compared to the merger.    

As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise Momentive with respect to the merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with Momentive, Zendesk and the industries in which they operate.

For services rendered in connection with the merger, Momentive has agreed to pay J.P. Morgan a fee based on 0.55% of the total consideration payable to Momentive stockholders in the merger, which fee would be approximately $24 million based on the closing price of Zendesk common stock on October 27, 2021 (the trading day prior to the announcement of the merger), $3 million of which became payable to J.P. Morgan upon delivery of its opinion and the remainder of which will only become payable to J.P. Morgan upon the closing of the merger. In addition, Momentive has agreed to reimburse J.P. Morgan for its expenses incurred in connection with its services, including the fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement. During the two years preceding the date of J.P. Morgan’s opinion, neither J.P. Morgan nor its affiliates have had any other material financial advisory or other commercial or investment banking relationships with Momentive or Zendesk. J.P. Morgan’s commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of Momentive, for which it receives customary compensation or other financial benefits. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of Momentive or Zendesk for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments. During the two year period preceding delivery of its opinion ending on October 28, 2021, the aggregate fees received by J.P. Morgan from Momentive and Zendesk were approximately $150,000 and $450,000, respectively.

Zendesk Unaudited Financial Projections

In connection with the merger, Zendesk management (i) prepared certain unaudited prospective financial information of Zendesk on a standalone basis for fiscal years 2021 through 2025, which projections are referred to as the “Zendesk standalone projections,” (ii) received certain unaudited prospective financial information concerning Momentive on a standalone basis for fiscal years 2021 through 2026, which projections, as adjusted by Zendesk management, are referred to as the “Zendesk adjusted Momentive standalone projections,” (iii) prepared certain estimates of synergies expected to be realized following the completion of the merger for fiscal years 2021 through 2025, which are referred to as the “Zendesk synergy projections,” and (iv) prepared certain unaudited prospective financial information for Zendesk on a pro forma basis for fiscal years 2021 through 2025 on the basis of the Zendesk standalone projections, the Zendesk adjusted Momentive standalone projections and the Zendesk synergy projections, taking into account the merger, which projections are referred to as the “Zendesk pro forma projections.” The Zendesk pro forma projections were prepared on a basis different than the historical pro forma financial information included in the section titled “Unaudited Pro Forma Condensed

 

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Combined Financial Statements” beginning on page 172 in this joint proxy statement/prospectus. The Zendesk standalone projections, the Zendesk adjusted Momentive standalone projections, the Zendesk synergy projections and the Zendesk pro forma projections are referred to collectively as the “Zendesk projections.”

The Zendesk projections were prepared for internal use only and not for public disclosure and were provided to the Zendesk board of directors for the purposes of considering, analyzing and evaluating the merger. The Zendesk projections were also provided to and used by Goldman Sachs, Zendesk’s financial advisor, with the approval of Zendesk management for the purpose of performing financial analyses in connection with rendering its fairness opinion to the Zendesk board of directors. The Zendesk standalone projections and the Zendesk synergy projections were also provided to Momentive management in connection with its consideration and evaluation of the merger and to Momentive’s financial advisors, J.P. Morgan and Allen & Company. The Zendesk standalone projections and, to the knowledge of Zendesk, the Zendesk adjusted Momentive standalone projections, were prepared treating each of Zendesk and Momentive on a standalone basis, without giving effect to the merger, including the expenses that have already and will be incurred in connection with completing the merger, the potential synergies that may be achieved by the combined company as a result of the merger, the effect of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed or in anticipation of the merger, or the effect of any business or strategic decisions or actions which would likely have been taken if the merger agreement had not been executed but which were instead altered, accelerated, postponed or not taken in anticipation of the merger.

Other than its quarterly financial guidance and business outlook, Zendesk does not as a matter of course make other public projections as to future revenues, earnings or other results available due to, among other reasons, the inherent difficulty of accurately predicting financial performance for future periods and the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. The Zendesk projections are not included in this joint proxy statement/prospectus to influence any decision on whether to vote for the Zendesk share issuance proposal or the Momentive merger proposal, but rather are included in this joint proxy statement/prospectus to give stockholders access to certain non-public information that was provided to the Zendesk board of directors and Zendesk’s financial advisor, and to Momentive and its financial advisors, for purposes of considering and evaluating the merger. The inclusion of the Zendesk projections should not be regarded as an indication that the Zendesk board of directors, Zendesk, the Momentive board of directors, Momentive or their respective financial advisors or any other recipient of this information considered, or now considers, them to be necessarily predictive of actual future results, and they should not be relied on as such. There can be no assurance that the projected results will be realized or that actual results will not be materially lower or higher than estimated, whether or not the merger is completed.

The Zendesk projections were not prepared with a view toward public disclosure or with a view toward compliance with the published guidelines established by the SEC or the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information, or GAAP, but, in the view of Zendesk management, were, or, in the case of the Zendesk adjusted Momentive standalone projections, assumed to have been, reasonably prepared in good faith on a basis reflecting the best available estimates and judgments at the time of preparation, and presented as of the time of preparation, to the best of management’s knowledge and belief, the expected future financial performance of Zendesk or Momentive, as applicable. However, this information is not fact and should not be relied upon as being necessarily predictive of actual future results, and readers of this joint proxy statement/prospectus are cautioned not to place undue reliance on the Zendesk projections. Although Zendesk management believes there is, or, in the case of the Zendesk adjusted Momentive standalone projections, assumed there was, a reasonable basis for the Zendesk projections, Zendesk cautions stockholders that actual future results could be materially different from the Zendesk projections. Zendesk’s independent registered public accounting firm, Ernst & Young LLP, has not audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the Zendesk projections and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

 

 

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The Zendesk projections are subject to estimates and assumptions in many respects and, as a result, subject to interpretation. While presented with numerical specificity, the Zendesk projections are based upon a variety of estimates and assumptions that are inherently uncertain, though considered reasonable by Zendesk management, or, in the case of the Zendesk adjusted Momentive standalone projections, assumed to be reasonable, as of the date of their preparation. These estimates and assumptions may prove to be impacted by any number of factors, including general economic conditions, trends in the software industry, regulatory and financial market conditions and the risks and uncertainties described or incorporated by reference in the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this joint proxy statement/prospectus, all of which are difficult to predict and many of which are beyond the control of Zendesk and will be beyond the control of the combined company. Also see the section titled “Where You Can Find More Information.” The Zendesk standalone projections and the Zendesk synergy projections also reflect assumptions as to certain business decisions that are subject to change. Because the Zendesk standalone projections were developed for Zendesk as an independent company without giving effect to the merger, they do not reflect any divestitures or other restrictions that may be imposed in connection with the receipt of any necessary governmental or regulatory approvals, synergies that may be realized as a result of the merger or any changes to Zendesk’s operations or strategy that may be implemented after completion of the merger. There can be no assurance that the Zendesk projections will be realized, and actual results will likely differ, and may differ materially, from those shown. Generally, the further out the period to which the Zendesk projections relate, the less predictive the information becomes.

The Zendesk projections contain certain non-GAAP financial measures that Zendesk management believes are helpful in understanding the applicable company’s past financial performance and future results. Zendesk management regularly uses a variety of financial measures that are not in accordance with GAAP for forecasting, budgeting and measuring financial performance. The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. While Zendesk believes these non-GAAP financial measures provide meaningful information to help investors understand the operating results and to analyze Zendesk’s financial and business trends on a period-to-period basis, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of Zendesk’s competitors and may not be directly comparable to similarly titled measures of Zendesk’s competitors due to potential differences in the exact method of calculation. The SEC rules that would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure do not apply to non-GAAP financial measures provided to a board of directors or a financial advisor in connection with a proposed business combination such as the merger if the disclosure is included in a document such as this joint proxy statement/prospectus. In addition, reconciliations of non-GAAP financial measures were not relied upon by the Zendesk board of directors, the Momentive board of directors or their respective financial advisors in connection with their respective evaluation of the merger. Accordingly, Zendesk has not provided a reconciliation of the non-GAAP financial measures included in the Zendesk projections to the relevant GAAP financial measures.

None of Zendesk, Momentive, the combined company or their respective affiliates, officers, directors, advisors or other representatives can provide any assurance that actual results will not differ from the Zendesk projections, and, except as required by applicable law, none of Zendesk, Momentive, the combined company or their respective affiliates undertakes any obligation to update, or otherwise revise or reconcile, the Zendesk projections to reflect circumstances existing after the date the Zendesk projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Zendesk projections are shown to be inappropriate. None of Zendesk or its affiliates, officers, directors, advisors or other representatives has made or makes any representation to any Zendesk stockholder or other person regarding Zendesk’s ultimate performance compared to the information contained in the Zendesk projections or that forecasted results will be achieved. Zendesk has made no representation to Momentive, in the merger agreement or otherwise, concerning the Zendesk projections.

 

 

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Summary of the Zendesk standalone projections

The following table presents a summary of the unaudited prospective financial information of Zendesk on a standalone basis prepared by Zendesk management for fiscal years 2021 through 2025. Zendesk management made various assumptions when preparing the Zendesk projections, including certain assumptions regarding Zendesk’s ability to grow revenue by attracting new customers and retaining and expanding existing customers and Zendesk’s ability to increase profitability and cash flow. The projected compounded annual growth rate from fiscal year end 2021 through fiscal year end 2025 was assumed to be 26% and non-GAAP operating income margin (defined as non-GAAP operating income divided by revenue) was assumed to increase from approximately 7.5% in fiscal year 2021 to approximately 12.5% in fiscal year 2025 due to assumed benefits of scale created by the increased revenue base.

 

        
     FY21E     FY22E     FY23E     FY24E     FY25E  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    

(in millions)

 

Revenue

   $ 1,333     $ 1,695     $ 2,144     $ 2,702     $ 3,377  

Non-GAAP Operating Income(1)

   $ 100     $ 127