Morgan Stanley performed an illustrative precedent transactions premiums analysis by
reviewing 72 software company transactions larger than $1 billion in aggregate value since 2014. For these transactions, Morgan Stanley noted the distributions of the following financial statistics, where available: (1) the
implied premium to KnowBe4s closing Class A common stock price on September 16, 2022, the last trading day prior to announcement of KnowBe4s receipt of an offer from Vista to acquire KnowBe4; and (2) the implied premium to
KnowBe4s unaffected 30-day average closing Class A common stock price on September 16, 2022.
The seventh paragraph under the caption Special FactorsOpinion of Morgan Stanley & Co LLCGeneral is amended and restated
to read as follows:
In the two years prior to the date of Morgan Stanleys opinion, Morgan Stanley and its affiliates have
provided financing services for KnowBe4 and received aggregate fees of approximately $5 to $10 million in connection with such services. In the two years prior to the date of Morgan Stanleys opinion, Morgan Stanley provided financial
advisory and financing services to the Vista Related Entities and received aggregate fees of approximately $120 to $140 million in connection with such services (this includes fees attributable to a transaction that closed on September 30,
2022 and financial advisory and financing services fees from companies that were no longer majority-controlled affiliates or portfolio companies of Vista at the time the relationships disclosure memorandum was circulated by Morgan Stanley on
July 12, 2022). In the two years prior to the date of Morgan Stanleys opinion, Morgan Stanley provided financial advisory and financing services to the KKR Related Entities and received aggregate fees of approximately $80 to
$105 million in connection with such services. In the two years prior to the date of Morgan Stanleys opinion, Morgan Stanley has not provided financial advisory and financing services to Elephant Partners. Morgan Stanley may also seek to
provide financial advisory and/or financing services to KnowBe4, Parent, Vista, the Vista Related Entities, KKR, the KKR Related Entities and Elephant Partners in the future and would expect to receive fees for the rendering of these services.
For purposes of this paragraph, financial advisory and financing services generally include M&A advisory, equity and debt capital markets transactions, and loans, but do not include sales, trading and asset management services.
The three paragraphs under the caption Special FactorsLitigation Relating to the Merger are amended and restated to read as follows:
On November 15, 2022, a purported KnowBe4 stockholder filed a complaint in the U.S. District Court for the Southern District of
New York against KnowBe4 and the members of the KnowBe4 Board, captioned ODell v. KnowBe4, Inc., et al., Case No. 22-cv-9727 (the
ComplaintO Dell Complaint).
On December 22, 2022, another purported KnowBe4 stockholder filed a complaint in the U.S. District Court for the Southern District of New York against KnowBe4 and the members of the KnowBe4 Board, captioned
Bushansky v. KnowBe4, Inc., et al., Case No. 1:22-cv-10833 (the
Bushansky Complaint). On January 10, 2023, another purported KnowBe4 stockholder filed a complaint in the
U.S. District Court for the District of Delaware, captioned Finger v. KnowBe4, Inc., et al., Case No. 1:23-cv-00021 (the
Finger Complaint). On January 13, 2022, another purported KnowBe4 stockholder filed a complaint in the U.S. District
Court for the District of Delaware, captioned Wilhelm v. KnowBe4, Inc., et al., Case No. 1:23-cv-00041 (the
Wilhelm Complaint and, collectively with the ODell Complaint, the
Bushansky Complaint, and the Finger Complaint, the Complaints). The
ODell Complaint and the Bushansky Complaint have since been voluntarily dismissed.
The Complaints asserts claims against all defendants under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder for issuing allegedly false and misleading statements in KnowBe4s preliminary proxy statement and definitive proxy statement and against the individual defendants
under Section 20(a) of the Exchange Act for alleged control person liability with respect to such allegedly false or misleading statements. The allegations in the Complaints include that the preliminary proxy statement
and definitive proxy statement omitted material information regarding KnowBe4s financial projections, the analyses performed by Morgan Stanley, potential conflicts of interest involving Morgan Stanley, and potential conflicts of
interest involving alleged KnowBe4 insiders. The Complaints seeks, among other relief, (1) to enjoin defendants from consummating the Merger; (2) to rescind the Merger Agreement or recover damages, if the
Merger is completed; (3) an accounting of damages; and (4) attorneys fees and costs.
The defendants believe that the
disclosures set forth in the preliminary proxy statement and definitive proxy statement comply fully with all applicable law and that the allegations contained in the Complaints are without merit. Additional lawsuits
arising out of the Merger may be filed in the future. No assurances can be made as to the outcome of such lawsuits or the Complaints.
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If you have any questions concerning the Special Meeting, the Proxy Statement or this Amendment, would like additional copies of the Proxy
Statement or this Amendment, or need help submitting your proxy or voting your shares of common stock, please contact our proxy solicitor: