PREM14A 1 fitbitpreliminaryproxy.htm PREM14A Document
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
Filed by the Registrant x Filed by a Party other than the Registrant ¨ 
Check the appropriate box:
x
 
Preliminary Proxy Statement
¨
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨
 
Definitive Proxy Statement
¨
 
Definitive Additional Materials
¨
 
Soliciting Material Pursuant to § 240.14a-12
Fitbit, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box)
¨
 
No fee required.
 
 
x
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
 
 
 
 
(1)
 
Title of each class of securities to which transaction applies:
 
Class A common stock, par value $0.0001 per share (“Class A common stock”), and Class B common stock, par value $0.0001 per share (“Class B common stock”), of Fitbit, Inc. (together, “common stock”).
 
 
(2)
 
Aggregate number of securities to which transaction applies:
 
As of November 15, 2019, there were outstanding (i) 260,815,425 shares of common stock; (ii) 13,903,925 shares of common stock issuable upon the exercise of stock options with an exercise price below $7.35 per share (“Company Options”); (iii) 18,616,952 shares of Class A common stock issuable upon the settlement of time-based restricted stock units (“Company RSUs”); (vi) 1,365,418 shares of Class A common stock issuable upon the settlement of performance-based restricted stock units (“Company PSUs”), assuming maximum achievement; and (v) and 230,000 shares of Class A common stock issuable upon the exercise of a warrant to purchase shares of Class A common stock (the “Company Warrant”).
 
 
(3)
 
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
 
Solely for the purpose of calculating the filing fee, the underlying value of the transaction was determined based upon the sum of: (i) 260,815,425 shares of common stock issued and outstanding multiplied by $7.35 per share; (ii) 13,903,925 shares of common stock issuable upon the exercise of Company Options with an exercise price below $7.35 per share multiplied by $4.81 (which is the difference between $7.35 and the weighted average exercise price per share of such Company Options); (iii) 18,616,952 shares of Class A common stock issuable upon the settlement of Company RSUs multiplied by $7.35 per share; (iv) 1,365,418 shares of Class A common stock issuable upon the settlement of Company PSUs, assuming maximum achievement, multiplied by $7.35; and (v) 230,000 shares of Class A common stock issuable upon the exercise of the Company Warrant. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the sum calculated in the preceding sentence by .0001298.
 
 
(4)
 
Proposed maximum aggregate value of transaction:
 
 $2,132,432,172.50
 
 
(5)
 
Total fee paid:
 
 $276,790
 
 
¨
 
Fee paid previously with preliminary materials.
 
 
¨
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
 
 
 
 
(1)
 
Amount Previously Paid:
 
 
 
 
(2)
 
Form, Schedule or Registration Statement No.:
 
 
 
 
(3)
 
Filing Party:
 
 
 
 
(4)
 
Date Filed:
 
 


PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION

FITBIT, INC.
199 Fremont Street, 14th Floor
San Francisco, California 94105
                  , 2019
Dear Fitbit, Inc. Stockholder:
You are cordially invited to attend a virtual special meeting of stockholders of Fitbit, Inc. (the “Company” or “Fitbit,” “we,” “us,” or “our”). The virtual special meeting will be held exclusively online via live webcast on              ,              , at              , Pacific Time. There will not be a physical meeting location. The virtual special meeting can be accessed by visiting www.virtualshareholdermeeting.com/FIT2020SM, where you will be able to listen to the meeting live, submit questions and vote online. Please note that you will not be able to attend the virtual special meeting in person. We have chosen to hold a virtual rather than an in-person meeting because we believe that a virtual stockholder meeting provides greater access to those who may want to attend while improving meeting efficiency and reducing costs.
At the virtual special meeting, you will be asked to consider and vote upon a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated as of November 1, 2019, by and among Google LLC (“Google”), a Delaware limited liability company and wholly owned subsidiary of Alphabet Inc., Magnoliophyta Inc. (“Merger Sub”), a Delaware corporation and wholly owned subsidiary of Google, and Fitbit. Upon the terms and subject to the conditions of the Merger Agreement, if the merger is completed, Merger Sub will merge with and into Fitbit (the “Merger”), with Fitbit surviving the Merger as a wholly owned subsidiary of Google.
If the Merger Agreement is adopted with the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of our Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), and Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, “Fitbit Common Stock”), entitled to vote on such matter, voting together as a single class, and the Merger is completed, each share of Fitbit Common Stock that you own as of immediately prior to the effective time of the Merger will be converted into the right to receive $7.35 in cash, without interest.
Our board of directors (“Board”) carefully considered a number of factors in evaluating the terms of the Merger Agreement. Based on such consideration, our Board unanimously determined that the Merger and the Merger Agreement are fair to and in the best interests of our stockholders. Accordingly, our Board has unanimously approved the Merger Agreement and the Merger and recommends that you vote (1) “FOR” the proposal to adopt the Merger Agreement, (2) “FOR” the approval, on a non-binding advisory basis, of the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the Merger and (3) “FOR” the proposal to approve the adjournment of the virtual special meeting to a later date or dates, if our Board determines that it is necessary or appropriate, and is permitted by the Merger Agreement, to (i) solicit additional proxies if (a) there is not a quorum present or represented by proxy or (b) there are insufficient votes to adopt the Merger Agreement, in each case, at the time of the then-scheduled virtual special meeting, (ii) give holders of Fitbit Common Stock additional time to evaluate any supplemental or amended disclosure or (iii) otherwise comply with applicable law.
The enclosed proxy statement provides detailed information about the virtual special meeting, the Merger Agreement, the Merger and the other proposals to be voted on at the virtual special meeting. A copy of the Merger Agreement is attached as Annex A to the proxy statement. We encourage you to read the proxy statement carefully in its entirety.
Your vote is very important, regardless of the number of shares you own. The proposal to adopt the Merger Agreement must be approved by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class. Each share of Class A Common Stock that you own will have one vote and each share of Class B Common Stock that you own will have ten votes. Only stockholders who owned shares of Fitbit Common Stock at the close of business on              , 2019, the record date for the virtual special meeting, will be entitled to vote at the virtual special meeting.
To vote your shares, you may submit a proxy via the Internet or by telephone, as specified in the Internet and telephone voting instructions on your proxy card, return your proxy card using the postage prepaid envelope provided, or attend the virtual special


meeting and vote at the meeting. If your shares are held in the name of a brokerage firm, bank, trust or other nominee, you must instruct the brokerage firm, bank, trust or other nominee how to vote your shares or obtain a proxy, executed in your favor, from that record holder, giving you the right to vote the shares at the virtual special meeting. Even if you plan to attend the virtual special meeting, we urge you to promptly submit a proxy for your shares via the Internet or by telephone or by completing, signing, dating and returning the enclosed proxy card.
If you fail to submit your proxy via Internet or telephone, return your proxy card, attend the virtual special meeting and vote at the meeting, or give voting instructions to your brokerage firm, bank, trust or other nominee, then your shares will not be counted for determining whether a quorum is present at the virtual special meeting and your decision not to respond will have the same effect as if you voted “AGAINST” the adoption of the Merger Agreement.
If you attend the virtual special meeting and wish to vote at the meeting, you may revoke your proxy and vote at the meeting.
Thank you for your continued support of Fitbit.
Sincerely,

James Park
President, Chief Executive Officer and Chairman
              , 2019
Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the Merger, passed upon the merits or fairness of the Merger Agreement or the Merger or determined if the accompanying proxy statement is accurate or complete. Any representation to the contrary is a criminal offense.
The accompanying proxy statement is dated              , 2019 and, together with the enclosed form of proxy card, is first being mailed to our stockholders on or about              , 2019.


PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION
FITBIT, INC.
199 Fremont Street, 14th Floor
San Francisco, California 94105
NOTICE VIRTUAL OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Fitbit, Inc.:
Fitbit, Inc., a Delaware corporation (the “Company” or “Fitbit,” “we,” “us,” or “our”), will hold a virtual special meeting of stockholders exclusively online via live webcast on                     ,                     , at                     , Pacific Time. There will not be a physical meeting location. The virtual special meeting can be accessed by visiting www.virtualshareholdermeeting.com/FIT2020SM, where you will be able to listen to the meeting live, submit questions, and vote online. We encourage you to allow ample time for online check-in, which will open at         , Pacific Time. Please note that you will not be able to attend the virtual special meeting in person. We are holding the virtual special meeting to consider and vote upon the following proposals:
1.
To adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated as of November 1, 2019, by and among Google LLC (“Google”), a Delaware limited liability company and wholly owned subsidiary of Alphabet Inc., Magnoliophyta Inc. (“Merger Sub”), a Delaware corporation and wholly owned subsidiary of Google, and Fitbit. Upon the terms and subject to the conditions of the Merger Agreement, if the merger is completed, Merger Sub will merge with and into Fitbit (the “Merger”), with Fitbit surviving the Merger as a wholly owned subsidiary of Google;
2.
To approve, on a non-binding advisory basis, the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the Merger (the “compensation proposal”); and
3.
To approve the adjournment of the virtual special meeting to a later date or dates, if our board of directors (“Board”) determines that it is necessary or appropriate, and is permitted by the Merger Agreement, to (i) solicit additional proxies if (a) there is not a quorum present or represented by proxy or (b) there are insufficient votes to adopt the Merger Agreement, in each case, at the time of the then-scheduled virtual special meeting, (ii) give holders of our Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), and Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, “Fitbit Common Stock”), additional time to evaluate any supplemental or amended disclosure or (iii) otherwise comply with applicable law (the “adjournment proposal”).
Only record holders of Fitbit Common Stock at the close of business on              , 2019 are entitled to receive notice of and to vote at the virtual special meeting, including any adjournments or postponements of the virtual special meeting. Your vote is important, regardless of the number of shares of Fitbit Common Stock you own. Each share of Class A Common Stock that you own will have one vote and each share of Class B Common Stock that you own will have ten votes.
The votes required to approve each proposal are as follows:
1.
The Merger Agreement must be adopted by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class.
2.
The compensation proposal must be approved by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal.
3.
The adjournment proposal must be approved by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal.


If a quorum is not present or represented by proxy at the virtual special meeting, the chairperson of the meeting may adjourn the meeting or may direct that the holders of a majority of the voting power of the shares entitled to vote who are present or represented by proxy at the virtual special meeting adjourn the meeting. If there is not a quorum of stockholders at the virtual special meeting and any proposal to adjourn the meeting submitted to the holders who are present or represented by proxy at the virtual special meeting is not approved, our Board may set a new record date and meeting date for a virtual special meeting to consider the proposal to adopt the Merger Agreement, the compensation proposal and the adjournment proposal, in accordance with the Merger Agreement.
If the Merger is completed, our stockholders who (1) submit a written demand for an appraisal of their shares prior to the stockholder vote on the adoption of the Merger Agreement, (2) do not vote or submit a proxy in favor of the adoption of the Merger Agreement, (3) take certain actions and meet certain conditions under the Delaware General Corporation Law (the “DGCL”) and (4) do not thereafter withdraw their demand for appraisal of their shares of Fitbit Common Stock or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will have the right to have such shares appraised by the Delaware Court of Chancery and to receive payment of the fair value of such shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, on the amount determined to be the fair value. For a more detailed discussion of your appraisal rights, see the section captioned “Proposal 1: Adoption of the Merger—Appraisal Rights.” Section 262 of the DGCL is reproduced in its entirety in Annex C to the accompanying proxy statement and is incorporated therein by reference.
You are cordially invited to attend the virtual special meeting. The virtual special meeting can be accessed by visiting www.virtualshareholdermeeting.com/FIT2020SM, where you will be able to listen to the meeting live, submit questions and vote online. Whether or not you expect to attend the virtual special meeting, please submit a proxy via the Internet or by telephone, as specified in the Internet and telephone voting instructions on your proxy card or return your proxy card using the postage prepaid envelope provided as promptly as possible in order to ensure your representation at the virtual special meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote at the meeting if you attend the virtual special meeting. Please note, however, that if your shares are held in the name of your brokerage firm, bank, trust or other nominee and you wish to vote at the virtual special meeting, you must instruct the brokerage firm, bank, trust or other nominee how to vote your shares or obtain a proxy, executed in your favor, from that record holder, giving you the right to vote the shares at the virtual special meeting.
If you sign, date and return your proxy card or submit a proxy via the Internet or by telephone without indicating how you wish to vote, your proxy will be voted “FOR” the proposal to adopt the Merger Agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal. If you do attend the virtual special meeting and wish to vote at the meeting, you may revoke your proxy and vote at the meeting. You may revoke your proxy in the manner described in the enclosed proxy statement at any time before it has been voted at the virtual special meeting.
Our Board unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal.
The Merger is described in the accompanying proxy statement, which we urge you to read carefully. A copy of the Merger Agreement is attached as Annex A to the proxy statement. If you have any questions or need assistance in voting your shares of Fitbit Common Stock, please contact our proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call:
Toll-Free at (888) 750-5834 (from the U.S. and Canada)
or +1 (412) 232-3651 (from other locations)
Banks & Brokers May Call Collect: (212) 750-5833
By Order of the Board of Directors,

James Park
President, Chief Executive Officer and Chairman
              , 2019



YOUR VOTE IS IMPORTANT
Your vote is very important, regardless of the number of shares you own. The proposal to adopt the Merger Agreement must be adopted by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class. To vote your shares, you can submit a proxy via the Internet or by telephone, as specified in the Internet and telephone voting instructions on the proxy card, return your proxy card using the postage prepaid return envelope provided, or attend the virtual special meeting and vote at the meeting. We urge you to promptly submit a proxy for your shares via the Internet or by telephone or by completing, signing, dating and returning the enclosed proxy card.
If you fail to submit your proxy via Internet or telephone, return your proxy card, attend the virtual special meeting and vote at the meeting, or give voting instructions to your brokerage firm, bank, trust or other nominee, then your shares will not be counted for determining whether a quorum is present at the virtual special meeting and your decision not to respond will have the same effect as if you voted “AGAINST” the adoption of the Merger Agreement, but will have no effect on the outcome of any vote on the compensation proposal or the adjournment proposal, assuming a quorum is present.
If your shares are held in the name of a brokerage firm, bank, trust or other nominee, you must instruct the brokerage firm, bank, trust or other nominee how to vote your shares or obtain a proxy, executed in your favor, from that record holder giving you the right to vote the shares at the virtual special meeting.
REFERENCES FOR ADDITIONAL INFORMATION
If you have any questions about the accompanying proxy statement, the virtual special meeting, the Merger or need assistance with voting procedures, you should contact:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call:
Toll-Free at (888) 750-5834 (from the U.S. and Canada)
or +1 (412) 232-3651 (from other locations)
Banks & Brokers May Call Collect: (212) 750-5833




FITBIT, INC.
PROXY STATEMENT
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 








PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION
SUMMARY
Except as otherwise specifically noted in this proxy statement, “Fitbit,” “we,” “our,” “us” and similar words in this proxy statement refer to Fitbit, Inc. In addition, throughout this proxy statement, we refer to Magnoliophyta Inc. as “Merger Sub”, to Google LLC as “Google” and to Alphabet Inc. as “Alphabet.”
This summary highlights selected information from this proxy statement related to the merger of Merger Sub with and into Fitbit (the “Merger”) and may not contain all of the information that is important to you. To understand the Merger more fully and for a more complete description of the legal terms of the Merger, you should read carefully this entire proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement. See the section captioned “Where You Can Find More Information.” The Agreement and Plan of Merger, dated as of November 1, 2019, among Google, Merger Sub, and Fitbit, as such agreement may be amended from time to time (the “Merger Agreement”) is attached as Annex A to this proxy statement. We encourage you to read the Merger Agreement, which is the legal document governing the Merger. Capitalized terms used in this section but not defined in this proxy statement have the meaning ascribed to them in the Merger Agreement.
Parties Involved in the Merger
Fitbit, Inc.
We help people lead healthier, more active lives by empowering them with data, inspiration and guidance to reach their goals. We pioneered the connected health and fitness market starting in 2007, and since then, have grown into a leading global health and fitness brand. The Fitbit platform combines wearable devices with software and services to give our users tools to help them reach their health and fitness goals, augmented by general purpose features that add further utility and drive user engagement. Our wearable devices, which include health and fitness trackers and smartwatches, enable our users to view data about their daily activity, exercise and sleep in real-time. Our software and services, which include an online dashboard and mobile app, provide our users with data analytics, motivational and social tools, and virtual coaching through customized fitness plans and interactive workouts.
Google LLC
Google’s mission is to organize the world’s information and make it universally accessible and useful, through products and platforms like Android, Chrome, Gmail, Google Drive, Google Maps, Google Play, Search and YouTube. Google is a subsidiary of Alphabet Inc.
Magnoliophyta Inc.
Merger Sub, a Delaware corporation and a wholly owned subsidiary of Google, was formed on October 29, 2019 solely for the purpose of engaging in the transactions contemplated by the Merger Agreement (the “Transactions”). Merger Sub has not engaged in any business activities other than in connection with the Transactions. Upon completion of the Merger, Merger Sub will merge with and into Fitbit, and Merger Sub will cease to exist.
Commercial Relationship Between the Companies
In April 2018, Fitbit and Google announced a collaboration under which Fitbit chose Google Cloud as its preferred cloud provider and Fitbit would use Google’s Cloud Healthcare API to help Fitbit integrate further into the healthcare system. For further discussion regarding the commercial relationship between Fitbit and Google, see the section captioned “Proposal 1: Adoption of the Merger Agreement—Background of the Merger.”
The Virtual Special Meeting
Date, Time and Place
A virtual special meeting of our stockholders will be held exclusively online via live webcast on                     ,                     , at                     , Pacific Time. The virtual special meeting can be accessed by visiting www.virtualshareholdermeeting.com/

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FIT2020SM, where you will be able to listen to the meeting live, submit questions and vote online. Please note that you will not be able to attend the virtual special meeting in person.
Record Date; Shares Entitled to Vote
You are entitled to vote at the virtual special meeting if you owned shares of our Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), and Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, “Fitbit Common Stock”) at the close of business on            , 2019, the record date of the virtual special meeting (the “record date”). Each share of Class A Common Stock outstanding as of the record date is entitled to one vote and each share of Class B Common Stock outstanding as of the record date is entitled to ten votes with respect to each proposal to be presented at the virtual special meeting.
Purpose
At the virtual special meeting, we will ask stockholders to vote on proposals to (1) adopt the Merger Agreement, (2) approve, on a non-binding advisory basis, the compensation that may be paid or become payable to our named executive officers named in our proxy statement filed with the Securities and Exchange Commission (the “SEC”) on April 11, 2019 (the “named executive officers”) that is based on or otherwise relates to the Merger (the “compensation proposal”) and (3) to approve the adjournment of the virtual special meeting to a later date or dates, if our board of directors (our “Board”) determines that it is necessary or appropriate, and is permitted by the Merger Agreement, to (i) solicit additional proxies if (a) there is not a quorum present or represented by proxy or (b) there are insufficient votes to adopt the Merger Agreement, in each case, at the time of the then-scheduled special meeting, (ii) give holders of Fitbit Common Stock additional time to evaluate any supplemental or amended disclosure or (iii) otherwise comply with applicable law (the “adjournment proposal”).
Quorum
As of the record date, there were                     shares of Class A Common Stock and                 shares of Class B Common Stock entitled to vote at the virtual special meeting. The holders of a majority of the aggregate voting power of the shares of Fitbit Common Stock issued and outstanding and entitled to vote at the virtual special meeting, present or represented by proxy at the virtual special meeting, will constitute a quorum at the virtual special meeting.
Required Vote
The votes required to approve each proposal are as follows:
1.
The Merger Agreement must be adopted by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class.
2.
The compensation proposal must be approved, on a non-binding advisory basis, by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal.
3.
The adjournment proposal must be approved by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal.
Stock Ownership of Our Directors and Executive Officers
At the close of business on the record date for the virtual special meeting, our directors and executive officers and their respective affiliates beneficially owned and were entitled to vote        shares of Class A Common Stock and      shares of Class B Common Stock at the virtual special meeting, or approximately       % of the voting power of the shares of Fitbit Common Stock outstanding on such date. Our co-founders, James Park, who serves as our Chief Executive Officer, President and Chairman of our Board, and Eric Friedman, who serves as our Chief Technology Officer and a member of our Board, beneficially owned and were entitled to vote, in the aggregate,           shares of Class A Common Stock and           shares of Class B Common Stock,

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representing approximately      % of the voting power of the shares of Fitbit Common Stock outstanding on the record date. Although they are not obligated to do so, our directors and executive officers have informed us of their intent to vote all of their shares of Fitbit Common Stock (1) “FOR” the proposal to adopt the Merger Agreement, (2) “FOR” the compensation proposal, and (3) “FOR” the adjournment proposal.
Voting and Proxies
Any stockholder of record entitled to vote may submit a proxy via the Internet or by telephone, as specified in the Internet and telephone voting instructions on your proxy card, return your proxy card using the postage prepaid envelope provided, or may vote at the virtual special meeting via the virtual meeting website. Any stockholder can attend the virtual special meeting by visiting www.virtualshareholdermeeting.com/FIT2020SM, where stockholders may vote and submit questions during the meeting. The virtual special meeting starts at              , Pacific Time. Please have your 16-digit control number to join the virtual special meeting. Instructions on who can attend and participate via Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com. If you are a beneficial owner and hold your shares of Fitbit Common Stock in “street name” through a bank, broker or other nominee, you should instruct your bank, broker or other nominee on how you wish to vote your shares of Fitbit Common Stock using the instructions provided by your bank, broker or other nominee. Under applicable stock exchange rules, banks, brokers or other nominees have the discretion to vote on routine matters. The proposals to be considered at the virtual special meeting are non-routine matters, and banks, brokers and other nominees cannot vote on these proposals without your instructions. Therefore, it is important that you cast your vote or instruct your bank, broker or nominee on how you wish to vote your shares.
If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the virtual special meeting by (1) signing another proxy card with a later date and returning it prior to the virtual special meeting; (2) submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy; (3) delivering a written notice of revocation to our Corporate Secretary; or (4) attending the virtual special meeting and voting at the meeting (your attendance at the virtual special meeting will not, by itself, revoke your proxy, so you must vote at the virtual special meeting to revoke your proxy).
If you hold your shares of Fitbit Common Stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote at the virtual special meeting if you obtain a proxy from your bank, broker or other nominee.
The Merger
Upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the Delaware General Corporation Law (the “DGCL”), if the Merger is completed, Merger Sub will merge with and into Fitbit, and Fitbit will continue as the surviving corporation and wholly owned subsidiary of Google (the “Surviving Corporation”). As a result of the Merger, we will cease to be a publicly traded company, all outstanding shares of Fitbit Common Stock will be canceled and converted into the right to receive $7.35 in cash, without interest (the “Merger Consideration”) (except for any shares owned by stockholders who are entitled to and who properly exercise appraisal rights under the DGCL), and you will no longer own any shares of the capital stock of the Surviving Corporation.
After the Merger is completed, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a stockholder (except that stockholders who properly exercise their appraisal rights may have the right to receive a payment for the “fair value” of their shares as determined pursuant to an appraisal proceeding as contemplated by the DGCL, as described below under the section captioned “Proposal 1: Adoption of the Merger Agreement—Appraisal Rights”).
Treatment of Fitbit Equity Awards
As a result of the Merger, at the effective time of the Merger (the “Effective Time”), the treatment of the stock options to purchase shares of Fitbit Common Stock (each, a “Fitbit Option”), restricted stock units with respect to shares of Fitbit Common Stock (each, a “Fitbit RSU”) and performance stock units with respect to shares of Fitbit Common Stock (each, a “Fitbit PSU”) that are outstanding as of immediately prior to the Effective Time will be as follows:

3


Fitbit Options
•
each Fitbit Option (whether vested or unvested) with a per share exercise price that equals or exceeds the Merger Consideration will be immediately canceled at the Effective Time for no consideration;
•
each Fitbit Option (whether vested or unvested) held by a non-employee director of our Board will be canceled and converted into the right to receive an amount in cash, without interest, equal to the product of (A) the excess of (x) the Merger Consideration over (y) the exercise price per share of such Fitbit Option, multiplied by (B) the total number of shares issuable upon the exercise in full of such Fitbit Option (the “Option Consideration”);
•
each vested Fitbit Option will be canceled and converted into the right to receive an amount in cash, without interest, equal to the Option Consideration; and
•
each unvested Fitbit Option (other than those held by non-employee directors of our Board) will be canceled and converted into the right to receive the Option Consideration, and the payment of such Option Consideration will be subject to (x) vesting in accordance with the vesting schedule applicable to such unvested Fitbit Option immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date, and (y) the terms and conditions of the plan and any related agreements containing the payment, vesting conditions and other terms by which such consideration is payable to grantees thereof (the “Unvested Payment Plan”).
Fitbit RSUs
•
each Fitbit RSU (whether vested or unvested) held by a non-employee director of our Board will be canceled and converted into a right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to such Fitbit RSU (the “RSU Consideration”);
•
each vested Fitbit RSU will be canceled and converted into the right to receive an amount in cash, without interest, equal to the RSU Consideration;
•
each unvested Fitbit RSU (other than those held by non-employee directors of our Board) will be canceled and converted into the right to receive the RSU Consideration, and the payment of such RSU Consideration will be subject to (x) vesting in accordance with the vesting schedule applicable to such unvested Fitbit RSU immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date, and (y) the terms and conditions of the Unvested Payment Plan.
Fitbit PSUs
•
each Fitbit PSU for which the service-based vesting requirement has been satisfied at or prior to the Effective Time (each, a “Vested Fitbit PSU”) will be canceled and converted into the right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to the Vested Fitbit PSU based on the deemed achievement of all relevant performance goals at target level; and
•
each Fitbit PSU for which the service-based vesting requirement has not been satisfied at or prior to the Effective Time (each, an “Unvested Fitbit PSU”) will be canceled and exchanged for the right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to the Unvested Fitbit PSU based on the deemed achievement of all relevant performance goals at target level, with such payment subject to (x) vesting in accordance with the service-based vesting schedule applicable to such Unvested Fitbit PSU immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date and (y) the terms and conditions of the Unvested Payment Plan.
Any consideration payable in respect of the Unvested Fitbit PSUs will not be subject to any performance-based vesting requirements and will be subject solely to the service-based vesting requirements applicable to the applicable Unvested Fitbit PSU as of immediately prior to the Effective Time.

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Payments with Respect to Equity Awards
The amounts described above with respect to (i) each vested Fitbit Option, vested Fitbit RSU and vested Fitbit PSU held by an individual other than a non-employee director of our Board (such vested equity awards, the “Vested Awards”) and (ii) each Fitbit Option, whether vested or unvested, and each Fitbit RSU, whether vested or unvested, held by a non-employee director of our Board (such equity awards, the “Non-Employee Director Awards”) will be paid as soon as practicable following the closing of the Merger (the “Closing,” and the date on which the Closing occurs, the “Closing Date”), and in no event later than (A) the second regular payroll cycle following the Closing Date for all Vested Awards and (B) two business days following the Closing Date for all Non-Employee Director Awards. Any amounts subject to the Unvested Payment Plan will be paid at the time and in accordance with the terms set forth in the Unvested Payment Plan.
Treatment of the Warrant
At the Effective Time, the warrant to purchase our Class A Common Stock issued by Fitbit on July 10, 2017 to a third party vendor (the “Warrant”) will be canceled unless exercised prior to such time. Prior to the Effective Time, we will deliver to the holder of the Warrant any notice required pursuant to the terms of the Warrant.
Treatment of the Employee Stock Purchase Plan
Our 2015 Employee Stock Purchase Plan (the “ESPP”) will terminate as of immediately prior to the Closing Date. No new offering period under the ESPP will commence on or after November 1, 2019. Participants in the ESPP will not be able to alter their payroll deductions from those in effect on November 1, 2019 (other than to reduce or discontinue their participation in the ESPP in accordance with the terms and conditions of the ESPP) or make separate non-payroll contributions to the ESPP on or following November 1, 2019, except as may be required by applicable law. The amount of the accumulated contributions of each participant under the ESPP as of immediately prior to the Effective Time will, to the extent not used to purchase shares of Fitbit Common Stock in accordance with the terms and conditions of the ESPP, be refunded in cash to such participant as promptly as practicable following the Effective Time (without interest).
Financing of the Merger
Google’s and the Merger Sub’s obligations under the Merger Agreement are not conditioned on the receipt or availability of any funds, or subject to any financing condition. Google intends to finance the transaction using its cash on hand and has represented to us in the Merger Agreement that it has sufficient cash resources to pay the aggregate Merger Consideration.
Conditions to the Closing of the Merger
Fitbit, Google and Merger Sub’s obligations to effect the Merger are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
•
approval of the Merger Agreement by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class (such approval, the “Requisite Company Stockholder Approval”), must have been obtained;
•
the expiration or termination of any waiting periods or receipt of any requisite consents under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), and approval under the antitrust laws of the European Union and other jurisdictions agreed by the parties (the “Antitrust Approvals”); and
•
the absence of any law, order or other legal restraint or injunction by any court or governmental entity having jurisdiction over Fitbit, Google, or Merger Sub that makes the consummation of the Merger illegal or otherwise prohibited (a “Restraint”).
Google and Merger Sub’s obligations to effect the Merger are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
•
the continued accuracy of our representations and warranties in the Merger Agreement, subject to materiality qualifiers, as of the date of the Merger Agreement and as of the Closing Date or the date in respect of which such representation

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or warranty was specifically made, including our representation that since December 31, 2018, a “Company Material Adverse Effect” has not occurred;
•
our performance and compliance in all material respects with all agreements and covenants required to be performed or complied with under the Merger Agreement; and
•
the receipt by Google of a certificate signed on our behalf by an executive officer of Fitbit certifying as to the foregoing.
Our obligations to effect the Merger are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
•
the continued accuracy of Google and Merger Sub’s representations and warranties in the Merger Agreement, subject to materiality qualifiers, as of the date of the Merger Agreement and as of the Closing Date or the date in respect of which such representation or warranty was specifically made;
•
Google and Merger Sub’s performance and compliance in all material respects with all agreements and covenants required to be performed or complied with under the Merger Agreement; and
•
our receipt of a certificate executed by an executive officer of Google certifying as to the foregoing.
For more information on conditions to the parties’ obligations to consummate the Merger, see the section captioned “The Merger Agreement—Conditions to the Closing of the Merger.”
Regulatory Approvals Required for the Merger
Under the Merger Agreement, the Merger cannot be completed until (1) the applicable waiting period under the HSR Act has expired or been terminated; and (2) the approval or clearance of the Merger has been granted by relevant antitrust authorities in the European Union, Australia, and solely in the event that the European Commission shall not have declared the Merger compatible with the common market prior to the date, if any, on which the United Kingdom ceases to be a member state of the European Union and the European Commission no longer retains exclusive jurisdiction to review the Merger in the United Kingdom, the United Kingdom (collectively, the “Specified Foreign Antitrust Approvals”).
Recommendation of our Board
Our Board, after considering various factors described under the section captioned “Proposal 1: Adoption of the Merger Agreement—Recommendation of our Board and Reasons for the Merger” has unanimously (1) determined that the Merger Agreement and the Merger are fair to and in the best interests of our stockholders and (2) approved the Merger Agreement and the Merger. Our Board unanimously recommends that you vote (1) “FOR” the proposal to adopt the Merger Agreement, (2) “FOR” the compensation proposal and (3) “FOR” the adjournment proposal.
Opinion of Fitbit’s Financial Advisor
We engaged Qatalyst Partners LP (“Qatalyst Partners”) to provide financial advice in connection with the proposed Merger based on Qatalyst Partners’ qualifications, expertise, reputation and knowledge of our business and the industry in which we operate. At the meeting of our Board on October 31, 2019, Qatalyst Partners rendered to our Board its oral opinion, subsequently confirmed in writing, to the effect that, as of October 31, 2019 and based upon and subject to the various assumptions, qualifications, limitations and other matters set forth therein, the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the holders of shares of Class A Common Stock, in their capacity as holders of our Class A Common Stock (other than Google or any affiliate of Google) (the “Holders”), was fair, from a financial point of view, to such Holders.
The full text of the written opinion of Qatalyst Partners, dated as of October 31, 2019, is attached to this proxy statement as Annex B and is incorporated into this proxy statement by reference. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Qatalyst Partners in rendering its opinion. You should read the opinion carefully in its entirety.

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Qatalyst Partners’ opinion was provided to our Board and addressed only, as of the date of the opinion, the fairness, from a financial point of view, of the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the Holders, in their capacity as such Holders, to such Holders. It does not address any other aspect of the Merger. It does not constitute a recommendation to any Fitbit stockholder as to how to vote with respect to the Merger or any other matter and does not in any manner address the price at which the shares of Class A Common Stock will trade at any time. Qatalyst Partners expressed no opinion regarding the consideration to be received by any holder of Class B Common Stock under the Merger Agreement in such holder’s capacity as a holder of Class B Common Stock.
For a description of the opinion that our Board received from Qatalyst Partners, see the section captioned “Proposal 1: Adoption of the Merger Agreement —Opinion of Fitbit’s Financial Advisor.”
Interests of our Directors and Executive Officers in the Merger
When considering the recommendation of our Board that you vote to approve the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of our stockholders generally. In (1) evaluating and negotiating the Merger Agreement, (2) approving the Merger Agreement and the Merger, and (3) recommending that the Merger Agreement be adopted by stockholders, our Board was aware of and considered the following interests, among other matters:
•
our executive officers are party to retention agreements and, in certain cases, stock option agreements with Fitbit, which provide for accelerated vesting of equity awards and other severance payments and benefits in the event of certain qualifying terminations of employment following the Merger;
•
in connection with the Merger, the compensation committee of our Board approved cash retention payments and special equity awards to certain of our named executive officers;
•
in connection with the Merger, all outstanding and unvested equity awards held by the non-employee directors of the Board will accelerate and become fully vested;
•
the anticipated continued employment of certain of our executive officers by Google or the Surviving Corporation following the Effective Time;
•
the entitlement to receive cash and equity incentives by Messrs. Park and Friedman under new offer letters with Google; and
•
our directors and executive officers are entitled to continued indemnification and insurance coverage pursuant to their existing agreements and the Merger Agreement.
If the proposal to adopt the Merger Agreement is approved, the shares of Fitbit Common Stock held by our directors and executive officers will be treated in the same manner as outstanding shares of Fitbit Common Stock held by all other stockholders. For more information, see the section captioned “Proposal 1: Adoption of the Merger Agreement—Interests of our Directors and Executive Officers in the Merger.”
Appraisal Rights
If the Merger is completed, stockholders who do not vote or submit a proxy in favor of the adoption of the Merger Agreement and who properly demand appraisal of their shares may be entitled to appraisal rights in connection with the Merger under Section 262 of the DGCL. This means that stockholders may be entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of Fitbit Common Stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid on the amount determined to be the fair value. Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights.

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Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the Merger Consideration.
To exercise your appraisal rights, you must (1) deliver a written demand for appraisal to us before the vote is taken on the proposal to adopt the Merger Agreement; (2) not vote or submit a proxy in favor of the proposal to adopt the Merger Agreement; and (3) continue to hold your shares of Fitbit Common Stock through the Effective Time. As such, merely voting against, abstaining or failing to vote on the proposal to adopt the Merger Agreement will not preserve your right to appraisal under the DGCL. Further, because a properly submitted proxy which does not include instructions on how to vote will be voted “FOR” the proposal to adopt the Merger Agreement, the submission of a proxy not marked “AGAINST” or “ABSTAIN” will result in a waiver of appraisal rights. Additionally, certain other conditions, as set forth in Section 262 of the DGCL and as briefly described herein, must be met. Your failure to follow exactly the procedures specified under the DGCL may result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced in its entirety as Annex C to this proxy statement. Only a holder of record of shares of Fitbit Common Stock is entitled to demand appraisal rights for the shares registered in that holder’s name. If you hold your shares of Fitbit Common Stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or other nominee to determine the appropriate procedures for the making of a demand for appraisal on your behalf by your bank, broker or other nominee.
Material U.S. Federal Income Tax Consequences of the Merger
For U.S. federal income tax purposes, the receipt of cash by a U.S. Holder (as defined under the section captioned “Proposal 1: Adoption of the Merger Agreement—Material U.S. Federal Income Tax Consequences of the Merger”) in exchange for such U.S. Holder’s shares of Fitbit Common Stock in the Merger generally will result in the recognition of gain or loss in an amount measured by the difference, if any, between the amount of cash that such U.S. Holder receives in the Merger and such U.S. Holder’s adjusted tax basis in the shares of Fitbit Common Stock surrendered in the Merger.
A Non-U.S. Holder (as defined under the section captioned “Proposal 1: Adoption of the Merger Agreement—Material U.S. Federal Income Tax Consequences of the Merger”) generally will not be subject to U.S. federal income tax with respect to the exchange of Fitbit Common Stock for cash in the Merger unless such Non-U.S. Holder has certain connections to the United States.
For more information, see the section captioned “Proposal 1: Adoption of the Merger Agreement—Material U.S. Federal Income Tax Consequences of the Merger”. Stockholders should consult their own tax advisors concerning the U.S. federal income tax consequences relating to the Merger in light of their particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction.
Alternative Acquisition Proposals
Under the Merger Agreement, after November 1, 2019 until the Effective Time (or the earlier termination of the Merger Agreement in accordance with its terms), we have agreed not to, and have agreed to cause our subsidiaries and their respective representatives not to, directly or indirectly:
•
initiate, solicit, authorize or knowingly encourage, or knowingly facilitate the submission or making of, any Acquisition Proposal (as defined under the section captioned “The Merger Agreement—Ability to Change Board Recommendation; Superior Proposal”), or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Acquisition Proposal;
•
other than informing third parties of the existence of the no-solicitation provision in the Merger Agreement, conduct, continue, participate or engage in negotiations or discussions with, or furnish any information concerning us or any of our subsidiaries to, any third party relating to an Acquisition Proposal or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Acquisition Proposal (other than requesting the clarification of the terms and conditions thereof so as to determine whether the Acquisition Proposal is, or could reasonably be expected to result in, a Superior Proposal (as defined under the section captioned “The Merger Agreement—Ability to Change Board Recommendation; Superior Proposal”)); or

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•
enter into any contract (written or oral, binding or non-binding, preliminary or definitive) relating to an Acquisition Proposal.
Notwithstanding these restrictions, if, at any time prior to the receipt of the approval of our stockholders to adopt the Merger Agreement, we receive an unsolicited, written bona fide Acquisition Proposal (which was made after November 1, 2019 and did not result from a breach of our no-solicitation obligations), we, our Board and our representatives may engage in negotiations or discussions and furnish any information and reasonable access to any third party making such Acquisition Proposal if, and only if, our Board determines in good faith, after consultation with our outside legal counsel and outside independent financial advisors, that such Acquisition Proposal constitutes a Superior Proposal or would reasonably be expected to lead to or result in a Superior Proposal and failure to take such action would be inconsistent with the Board’s fiduciary duties to our stockholders.
We are not entitled to terminate the Merger Agreement to enter into an agreement for a Superior Proposal unless we comply with certain procedures in the Merger Agreement, including providing Google with notice and the material terms and conditions of such Acquisition Proposal and negotiating with Google, if requested, over a four business day period regarding changes to the terms of the Merger Agreement intended to cause the applicable Acquisition Proposal to no longer constitute a Superior Proposal. In addition, we are not entitled to terminate the Merger Agreement if, during such four business day period, Google makes an irrevocable proposal that results in the applicable Acquisition Proposal no longer being a Superior Proposal, as determined in good faith by our Board (after consultation with outside counsel and outside independent financial advisors). The termination of the Merger Agreement by us in order to accept a Superior Proposal will result in our payment to Google of an $80 million termination fee (the “Company Termination Fee”). For more information on the termination fees that may become payable by us pursuant to the Merger Agreement, see the section captioned “The Merger Agreement—Termination Fees.”
Termination of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the Effective Time in the following ways:
•
by mutual written agreement of Fitbit and Google;
•
by either Fitbit or Google, if:
◦
the Closing has not occurred at or prior to 5:00 p.m. (New York City time) on November 1, 2020 (the “End Date”), provided that the right to terminate the Merger Agreement will not be available to any party whose material breach of any provision of the Merger Agreement has been the principal cause of, or resulted in, the failure of the Closing to have occurred as of the End Date; provided, further, that if by the fifth business day prior to any then-scheduled End Date, the Regulatory Authorization Condition or the No Injunction Condition (each as defined under the section captioned “The Merger Agreement—Conditions to the Closing of the Merger”) have not been satisfied or waived by the party entitled to the benefit of such condition (provided that, in the case of the No Injunction Condition, only if the Restraint causing the No Injunction Condition to not be satisfied arises under antitrust laws), then either we or Google will be entitled to extend the End Date by three months; provided, further, that, the End Date can never be extended beyond May 1, 2021;
◦
the Requisite Company Stockholder Approval has not been obtained at the special meeting or any adjournment or postponement thereof; or
◦
any court of competent jurisdiction or any governmental entity has issued a final, non-appealable order or taken any other action, in each case, permanently restraining, enjoining or otherwise prohibiting the Merger, or any applicable law is in effect that makes consummation of the Merger illegal (provided that the right to terminate the Merger Agreement will not be available to any party whose failure to perform any of its obligations under the Merger Agreement has been the principal cause of, or resulted in, such events).
•
by Google, if:
◦
prior to the receipt of the Requisite Company Stockholder Approval, (A) our Board has failed to include a recommendation to our stockholders to adopt the Merger Agreement in the proxy statement or has otherwise effected a Change in Recommendation (as defined under the section captioned “The Merger Agreement—Ability

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to Change Board Recommendation; Superior Proposal”), (B) we enter into an Alternative Acquisition Agreement (as defined under the section captioned “The Merger Agreement—Ability to Change Board Recommendation; Superior Proposal”) or (C) we willfully and materially breach our no-solicitation covenant in the Merger Agreement or our obligation to file this proxy statement and hold a special meeting to adopt the Merger Agreement;
◦
we breach or fail to perform in any material respect any of our covenants or obligations contained in the Merger Agreement or any of our representations or warranties contained in the Merger Agreement are not true and correct, which breach or failure to perform or failure to be true and correct would give rise to the failure to satisfy certain conditions to the completion of the Merger, and such breach or failure cannot be cured by the End Date, or if capable of being cured, has not been cured within 30 days of the date after Google gives us written notice of such breach or failure to perform or, if earlier, the End Date; or
◦
any governmental entity has issued a final, non-appealable order or taken any other action or any applicable law is in effect, in each case, deemed applicable to the Merger by any governmental entity that would constitute an Action of Divestiture (as defined under the section captioned “The Merger Agreement—Efforts to Close the Merger”) provided that the right to terminate under this provision will not be available to Google if Google’s failure to perform any of its obligations under the Merger Agreement was the principal cause of, or resulted in, such events.
•
by us:
◦
prior to the receipt of the Requisite Company Stockholder Approval, in order to enter into a definitive Alternative Acquisition Agreement concerning a transaction that constitutes a Superior Proposal concurrently with such termination; provided that we (A) prior to or concurrently with such termination pay Google the Company Termination Fee (as defined under the section captioned “The Merger Agreement—Termination Fees”) and (B) concurrently with such termination, enter into such definitive Alternative Acquisition Agreement; or
◦
if Google breaches or fails to perform in any material respect any of its covenants or other agreements contained in the Merger Agreement or any of Google’s representations or warranties contained in the Merger Agreement are not true and correct, which breach, failure to perform or failure to be true and correct would give rise to the failure to satisfy certain conditions to the completion of the Merger, and such breach or failure cannot be cured by the End Date, or if capable of being cured, has not been cured within 30 days of the date after we give Google written notice of such breach or failure to perform or, if earlier, the End Date.
For more information on the circumstances under which we or Google may terminate the Merger Agreement, see the section captioned “The Merger Agreement—Termination of the Merger Agreement.”
Termination Fees
Except in specified circumstances, whether or not the Merger is completed, we, on the one hand, and Google and Merger Sub, on the other hand, are each responsible for all of their respective costs and expenses incurred in connection with the Merger and the Transactions.
We will be required to pay Google the Company Termination Fee in certain circumstances, including if we terminate the Merger Agreement to accept a Superior Proposal.
We will be required to pay Google a termination fee of $21 million (the “No Vote Termination Fee”) if either we or Google terminate the Merger Agreement because we fail to obtain the Requisite Company Stockholder Approval at a special meeting, or at any postponement or adjournment thereof, at which a vote to adopt the Merger Agreement is taken.
Google will be required to pay us a termination fee of $250 million (the “Parent Termination Fee”) under certain circumstances related to a failure to obtain Antitrust Approvals prior to the End Date or the existence of a Restraint arising under the antitrust laws.
For more information on these termination fees, see the section captioned “The Merger Agreement—Termination Fees.”

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Market Prices and Dividend Data
Our Class A Common Stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “FIT.” On October 31, 2019, the last full trading day before the public announcement of the Merger, the closing price for Class A Common Stock was $6.18 per share, and on           , 2019, the latest practicable trading day before the printing of this proxy statement, the closing price for Class A Common Stock was $       per share. Our Class B Common Stock is neither listed nor traded.
We have never paid cash dividends on the Fitbit Common Stock.
Effect on Fitbit if the Merger is Not Completed
If the Merger Agreement is not adopted by stockholders or if the Merger is not completed for any other reason, stockholders will not receive any payment for their shares of Fitbit Common Stock. Instead, we will remain a stand-alone public company, our Class A Common Stock will continue to be listed and traded on the NYSE and registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we will continue to file periodic reports with the SEC. Under specified circumstances, upon the termination of the Merger Agreement, we will be required to pay Google a termination fee. For more details, see the section captioned “The Merger Agreement—Termination Fees.” Upon termination of the Merger Agreement under certain other specified circumstances, Google may be required to pay us a termination fee, as described below under the section captioned “The Merger Agreement—Termination Fees.”
In addition, if the Merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which we operate and risks related to adverse economic conditions.

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QUESTIONS AND ANSWERS ABOUT THE VIRTUAL SPECIAL MEETING AND THE MERGER
The following Questions and Answers About the Virtual Special Meeting and the Merger (this “Q&A”) is intended to address some commonly asked questions about the virtual special meeting of our stockholders and the Merger. This Q&A may not address all questions that may be important to you as a Fitbit stockholder. We urge you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement.
General
Q:
Why am I receiving this proxy statement?
A:
You are receiving this proxy statement because you were a Fitbit stockholder as of            , 2019, the record date for the virtual special meeting. To complete the Merger, our stockholders holding a majority of the aggregate voting power of Fitbit Common Stock, outstanding as of            , 2019, the record date for the virtual special meeting, entitled to vote and voting as a single class, must affirmatively vote to adopt the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to this proxy statement.
You are being solicited to vote in favor of the proposals (1) to adopt the Merger Agreement, (2) to approve the compensation proposal and (3) to approve the adjournment proposal.
Q:
What will happen to my Fitbit Common Stock as a result of the Merger?
A:
If the Merger is completed, each share of Fitbit Common Stock that you hold immediately prior to the Effective Time will be converted into the right to receive the Merger Consideration. This does not apply to shares of Fitbit Common Stock held by any of our stockholders who have properly demanded their appraisal rights under the DGCL. See the section captioned “Proposal 1: Adoption of the Merger Agreement—Appraisal Rights.”
Q:
What will happen to Fitbit generally as a result of the Merger?
A:
If the Merger is completed, we will cease to be a stand-alone public company and will become a wholly owned subsidiary of Google. As a result, you will no longer have any ownership interest in Fitbit. Upon completion of the Merger, shares of Class A Common Stock will no longer be listed on any stock exchange or quotation system, including the NYSE. Our Class B Common Stock is neither listed nor traded. In addition, following the completion of the Merger, the registration of Fitbit Common Stock and our reporting obligations under the Exchange Act, will be terminated.
Q:
What are the U.S. federal income tax consequences of the Merger to me?
A:
The receipt of cash in exchange for shares of Fitbit Common Stock pursuant to the Merger generally will be a taxable transaction for U.S. federal income tax purposes. Generally, you will recognize gain or loss equal to the difference between the amount of cash you receive and the adjusted tax basis of your shares of Fitbit Common Stock. If you are a U.S. holder, you generally will be subject to U.S. federal income tax on any gain recognized in connection with the Merger. If you are a non-U.S. holder, you generally will not be subject to U.S. federal income tax on any gain recognized in connection with the Merger unless you have certain connections to the United States. The tax consequences of the Merger to you will depend on your particular circumstances, and you should consult your own tax advisors to determine how the Merger will affect you.
For a more detailed summary of the U.S. federal income tax consequences of the Merger, see the section captioned “Proposal 1: Adoption of the Merger Agreement—Material U.S. Federal Income Tax Consequences of the Merger”.
Q:
Am I entitled to appraisal rights in connection with the Merger?
A:
Statutory appraisal rights under the DGCL in connection with the Merger will be available to stockholders who (1) continuously hold their shares of Fitbit Common Stock through the Effective Time; (2) submit a written demand for an appraisal of their shares prior to the stockholder vote on the adoption of the Merger Agreement; (3) do not vote or submit a proxy in favor of the adoption of the Merger Agreement; (4) take certain actions and meet certain conditions under the DGCL; and (5) do not thereafter withdraw their demand for appraisal of their shares of Fitbit Common Stock or otherwise

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lose their appraisal rights, in each case in accordance with the DGCL. For a more detailed discussion of your appraisal rights, see the section captioned “Proposal 1: Adoption of the Merger Agreement—Appraisal Rights.”
A copy of the full text of Section 262 of the DGCL is included as Annex C to this proxy statement. Failure to precisely follow any of the statutory procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights.
Q:
When do you expect the Merger to be completed?
A:
We are working toward completing the Merger as quickly as possible and expect the Merger to be completed in 2020. However, the Merger continues to be subject to various closing conditions, including our stockholders’ approval of the proposal to adopt the Merger Agreement and the receipt of Antitrust Approvals. Therefore, we cannot assure you that all conditions to the Merger will be satisfied or, if satisfied, the date by which they will be satisfied.
Q:
When will I receive the Merger Consideration for my shares of Fitbit Common Stock?
A:
After the Merger is completed, you will receive written instructions, including a letter of transmittal that explains how to exchange your shares of Fitbit Common Stock for the Merger Consideration. When you properly return and complete the required documentation described in the written instructions, you will receive from the paying agent a payment of the Merger Consideration for your shares of Fitbit Common Stock.
The Virtual Special Meeting
Q:
When and where will the virtual special meeting of our stockholders be held?
A:
The virtual special meeting of our stockholders will be held exclusively online via live webcast on                 ,                 , at                 , Pacific Time. There will not be a physical meeting location. The virtual special meeting can be accessed by visiting www.virtualshareholdermeeting.com/FIT2020SM, where you will be able to listen to the meeting live, submit questions and vote online. We encourage you to allow ample time for online check-in, which will open at       , Pacific Time. Please note that you will not be able to attend the virtual special meeting in person.
Q:
What are the proposals that will be voted on at the virtual special meeting?
A:
You will be asked to consider and vote on (1) a proposal to adopt the Merger Agreement, (2) the compensation proposal, and (3) the adjournment proposal.
Q:
How does our Board recommend that I vote on the proposals?
A:
Our Board unanimously approved the Merger Agreement and the Merger and determined that the Merger Agreement and the Merger are fair to and in the best interests of our stockholders and recommends that you vote:
•
“FOR” the proposal to adopt the Merger Agreement;
•
“FOR” the compensation proposal; and
•
“FOR” the adjournment proposal.
Q:
Why am I being asked to consider and vote on the named executive officer Merger-related compensation proposal?
A:
SEC rules require us to seek approval on a non-binding, advisory basis with respect to certain payments that will or may be made to our named executive officers in connection with the Merger. Approval of the named executive officer Merger-related compensation proposal is not required to complete the Merger.
Q:
What do I need in order to be able to attend the virtual special meeting online?
A: The virtual special meeting will be held via live webcast only. Any stockholder can attend the virtual special meeting live online at www.virtualshareholdermeeting.com/FIT2020SM. The webcast will start at            , Pacific Time on            . Stockholders may vote and submit questions while attending the virtual special meeting online. In order to be able to enter

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the virtual special meeting, you will need the 16-digit control number, which is included on your proxy card if you are a stockholder of record of shares of Fitbit Common Stock or included with your voting instruction card and voting instructions you received from your broker, bank or other nominee of your shares if you hold your shares of Fitbit Common Stock in “street name.” Instructions on how to attend and participate online are also posted online at www.proxyvote.com.
Q:
Who is entitled to attend and vote at the virtual special meeting?
A:
The record date for the virtual special meeting is            , 2019. If you own shares of Fitbit Common Stock as of the close of business on the record date, you are entitled to notice of, and to vote at, the virtual special meeting or any adjournment or postponement of the virtual special meeting. As of the record date, there were approximately            shares of Fitbit Common Stock issued and outstanding, consisting of            shares of Class A Common Stock and            shares of Class B Common Stock, held collectively by approximately            stockholders of record. Each share of Class A Common Stock outstanding as of the record date is entitled to one vote, and each share of Class B Common Stock outstanding as of the record date is entitled to ten votes, with respect to each proposal to be presented at the virtual special meeting.
Stockholders of record as of the record date of the virtual special meeting and their duly appointed proxy holders may attend the virtual special meeting and vote at the meeting. Beneficial owners of shares held in “street name” will only be able to vote at the virtual special meeting if they have a proxy, executed in their favor, from their broker, bank or other nominee of the stockholder of record of their shares, giving them the right to vote the shares at the virtual special meeting.
Q:
Do I need to attend the virtual special meeting?
A:
No. While our stockholders of record may exercise their right to vote their shares at the virtual special meeting, it is not necessary for you to attend the virtual special meeting in order to vote your shares of Fitbit Common Stock.
Q:
What constitutes a quorum?
A:
The presence at the virtual special meeting of the holders of a majority of the aggregate voting power of the shares of Fitbit Common Stock issued and outstanding and entitled to vote at the virtual special meeting will constitute a quorum. Shares are counted as present at the virtual special meeting if the holder is present and votes online at the virtual special meeting or if the holder has properly submitted a proxy. Each share of Class A Common Stock outstanding as of the record date is entitled to one vote and each share of Class B Common Stock outstanding as of the record date is entitled to ten votes with respect to each proposal to be presented at the virtual special meeting. If you fail to return your proxy card or to submit a proxy via Internet or telephone, or if you fail to attend the virtual special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the virtual special meeting and will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. Similarly, if you hold your shares in “street name” and fail to instruct your broker, bank or other nominee how to vote your shares, your shares will not be counted for purposes of determining whether a quorum is present and will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. If you attend the virtual special meeting or if you submit (and do not thereafter revoke) a proxy by duly executing and returning a proxy card or via Internet or telephone, even if you abstain from voting, your shares of Fitbit Common Stock will be counted for purposes of determining whether a quorum is present at the virtual special meeting.
Q:
What vote is required to adopt the Merger Agreement?
A:
The adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class. If you abstain from voting, fail to cast your vote, at the virtual special meeting or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. Our founders, Messrs. Park and Friedman beneficially owned and were entitled to vote, in the aggregate,          shares of Class A Common Stock and         shares of Class B Common Stock, representing approximately         % of the voting power of the shares of Fitbit Common Stock outstanding on the record date. Although they are not obligated to do so, they have informed us that they intend to vote all of their shares of Fitbit Common Stock “FOR” the proposal to adopt the Merger Agreement.

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Q:
What vote is required to approve the compensation proposal?
A:
In accordance with the rules of the SEC, stockholders have the opportunity to cast a non-binding, advisory vote to approve compensation that may be paid or become payable to our named executive officers based upon or otherwise relating to the Merger, as described in the table provided in the section captioned “Proposal 1: Adoption of the Merger Agreement—Quantification of Potential Payments and Benefits to our Named Executive Officers.” The vote to approve the compensation proposal is advisory and therefore will not be binding on us or Google, nor will it overrule any prior decision or require our Board (or any committee of our Board) to take any action, regardless of whether the Merger is completed. The compensation that may be paid in connection with the Merger is contractual with respect to our named executive officers. Accordingly, if our stockholders adopt the Merger Agreement and the Merger is completed, the compensation based on or otherwise relating to the Merger will be paid to our named executive officers in accordance with the terms of their compensation agreements and arrangements, regardless of whether our stockholders approve the compensation proposal.
Approval of the compensation proposal requires the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present at the virtual special meeting or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal.
If you abstain from voting, fail to cast your vote, either at the virtual special meeting or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the outcome of the vote for the compensation proposal, provided that a quorum is present at the virtual special meeting.
Our founders, Messrs. Park and Friedman beneficially owned and were entitled to vote, in the aggregate,            shares of Class A Common Stock and          shares of Class B Common Stock, representing approximately       % of the voting power of the shares of Fitbit Common Stock outstanding on the record date. Although they are not obligated to do so, our directors and executive officers, including Messrs. Park and Friedman, have informed us that they intend to vote all of their shares of Fitbit Common Stock “FOR” the compensation proposal. Approval, on a non-binding, advisory basis, of the compensation proposal is not a condition to the completion of the Merger.
Q:
What vote is required to adopt the adjournment proposal?
A:
Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present at the virtual special meeting or represented by proxy at the virtual special meeting and are voted “FOR” or AGAINST” the proposal.
If you abstain from voting, fail to cast your vote either at the virtual special meeting or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the outcome of the vote for the adjournment proposal, provided that a quorum is present at the virtual special meeting.
Our founders, Messrs. Park and Friedman beneficially owned and were entitled to vote, in the aggregate,            shares of Class A Common Stock and            shares of Class B Common Stock, representing approximately      % of the voting power of the shares of Fitbit Common Stock outstanding on the record date. Although they are not obligated to do so, our directors and executive officers, including Messrs. Park and Friedman, have informed us that they intend to vote all of their shares of Fitbit Common Stock “FOR” the adjournment proposal.
Q:
Why is my vote important? How are votes counted? What happens if I abstain?
A:
There must be a quorum for business to be conducted at the virtual special meeting. If you do not submit a proxy or voting instructions, or if you do not attend the virtual special meeting, it will be more difficult for us to obtain the necessary quorum to conduct business at the virtual special meeting.
Votes will be counted by the inspector of election appointed for the virtual special meeting, who will separately count “FOR” and “AGAINST” votes and abstentions. If you abstain from voting, fail to cast your vote, at the virtual special meeting or by proxy, it will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement, but will have no effect on the compensation proposal or the adjournment proposal (provided that a quorum is present).

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Q:
Do any of our directors or executive officers have interests in the Merger that may differ from those of our stockholders?
A:
In considering the recommendation of our Board with respect to the Merger Agreement, you should be aware that our directors and executive officers have interests in the Merger that may be different from, or in addition to, those of our stockholders generally. These interests may create potential conflicts of interest. Our Board was aware that these interests existed and considered them, among other matters, when it approved the Merger Agreement and made its recommendation that our stockholders adopt the Merger Agreement. You should read the section captioned “Proposal 1: Adoption of the Merger Agreement—Interests of our Directors and Executive Officers in the Merger.”
Q:
What do I need to do now?
A:
After carefully reading and considering the information contained in this proxy statement, including the annexes and the other documents referred to in this proxy statement, please vote your shares in one of the manners described below. Each share of Class A Common Stock outstanding as of the record date is entitled to one vote and each share of Class B Common Stock outstanding as of the record date is entitled to ten votes with respect to each proposal to be presented at the virtual special meeting.
Q:
How do I vote if I am a stockholder of record?
A:
You may vote:
•
by following the Internet voting instructions printed on your proxy card;
•
by following the telephone voting instructions printed on your proxy card;
•
by completing, signing and dating each proxy card you receive and returning it in the enclosed postage-paid envelope; or
•
by casting your vote at the virtual special meeting via the virtual meeting website. There will not be a physical meeting location. Any stockholder can attend the virtual special meeting by visiting www.virtualshareholdermeeting.com/FIT2020SM, where stockholders may vote and submit questions during the meeting. The virtual special meeting starts at           , Pacific Time. We encourage you to allow ample time for online check-in, which will open at       , Pacific Time. Please have your 16-digit control number to join the virtual special meeting. Instructions on who can attend and participate via Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com.
If you are voting via the Internet or by telephone, your voting instructions must be received by the date and time indicated on the applicable proxy card(s).
Voting via the Internet, by telephone or by mailing in your proxy card will not prevent you from attending the virtual special meeting. You are encouraged to submit a proxy via the Internet, by telephone or by mail even if you plan to attend the virtual special meeting, to ensure that your shares of Fitbit Common Stock are present or represented at the virtual special meeting.
Q:
What happens if I return my proxy card but I do not indicate how to vote?
A:
If you submit a proxy but do not include instructions on how to vote, your shares of Fitbit Common Stock will be voted “FOR” the proposal to adopt the Merger Agreement, “FOR” the approval of the compensation proposal and “FOR” the approval of the adjournment proposal. We do not currently intend to present any other proposals for consideration at the virtual special meeting.
Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A:
If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, to be the “stockholder of record.” If you are a stockholder of record, this proxy statement and your proxy card have been sent directly to you by or on behalf of Fitbit.

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If your shares are held through a brokerage firm, bank, broker or other nominee, you are considered the “beneficial owner” of shares of Fitbit Common Stock held in “street name.” If you are a beneficial owner of shares of Fitbit Common Stock held in “street name,” this proxy statement has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your brokerage firm, bank, broker or other nominee how to vote your shares by following their instructions for voting, and you are also invited to attend the virtual special meeting. However, because you are not the stockholder of record, you may not vote your shares at the virtual special meeting unless you obtain a proxy, executed in your favor, from your brokerage firm, bank, broker or other nominee giving you the right to vote your shares at the virtual special meeting.
Q:
How do I vote if my shares are held by my brokerage firm, bank, trust or other nominee?
A:
If your shares are held in a brokerage account or by another nominee, such as a bank or trust, then the brokerage firm, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares. However, you still are considered to be the beneficial owner of those shares, with your shares being held in “street name.” “Street name” holders generally cannot vote their shares directly and must instead instruct the brokerage firm, bank, trust or other nominee how to vote their shares. Your brokerage firm, bank, trust or other nominee will only be permitted to vote your shares for you at the virtual special meeting if you instruct it how to vote. Therefore, it is important that you promptly follow the directions provided by your brokerage firm, bank, trust or other nominee regarding how to instruct them to vote your shares. If you wish to vote at the virtual special meeting, you must obtain a proxy, executed in your favor, from your brokerage firm, bank, trust or other nominee giving you the right to vote your shares at the virtual special meeting.
In addition, because any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, shares held in “street name” will not be combined for voting purposes with shares you hold of record. To ensure your shares are represented and voted at the virtual special meeting, you should instruct your brokerage firm, bank, trust or other nominee to vote your shares that you hold in “street name.”
Q:
What is a broker non-vote?
A:
If you are a beneficial owner of shares held in “street name” and do not provide your broker, bank or nominee with specific voting instructions, the broker, bank or nominee may generally vote on “routine” matters, but cannot vote on “non-routine” matters. The proposal to adopt the Merger Agreement, the compensation proposal and the adjournment proposal are considered “non-routine” matters. If the broker, bank or nominee does not receive instructions from you on how to vote your shares on a non-routine matter, it will inform the inspector of election that it does not have authority to vote on this matter with respect to your shares. This is referred to as a “broker non-vote.”
You should instruct your broker, bank or other nominee how to vote your shares. Under the rules applicable to broker-dealers, your broker, bank or other nominee does not have discretionary authority to vote your shares on any of the proposals scheduled to be voted on at the virtual special meeting. Because brokers, banks and other nominees do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of Fitbit Common Stock held in “street name” does not give voting instructions to the broker, bank or other nominee, then those shares will not be counted as present or by proxy at the virtual special meeting. In addition, any broker non-vote will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement, but will have no effect on the vote for the compensation proposal or the adjournment proposal (provided that a quorum is present).
Q:
What is a proxy?
A:
A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of Fitbit Common Stock. The written document describing the matters to be considered and voted on at the virtual special meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of Fitbit Common Stock is called a “proxy card.”

17


Q:
May I change my vote after I have delivered my proxy?
A:
Yes. If you are the stockholder of record of Fitbit Common Stock, you have the right to change or revoke your proxy at any time before the vote being taken at the virtual special meeting by:
•
delivering a written revocation of the proxy, or a later dated, signed proxy card, to our Corporate Secretary at 199 Fremont Street, 14th Floor, San Francisco, California, 94105, on or before the business day prior to the virtual special meeting;
•
attending the virtual special meeting and voting at the meeting (your attendance at the virtual special meeting will not, by itself, revoke your proxy, so you must vote at the virtual special meeting to revoke your proxy); or
•
signing and delivering a new proxy, relating to the same shares of Fitbit Common Stock and bearing a later date; or by submitting another proxy by telephone or via the Internet after the date of your prior proxy and by the date and time indicated on the applicable proxy card(s).
If you are a “street name” holder of Fitbit Common Stock, you should contact your brokerage firm, bank, trust or other nominee to obtain instructions as to how to change or revoke your voting instructions.
Q:
What is the deadline for voting my shares of Fitbit Common Stock?
A:
If you are a stockholder of record, your proxy must be received via the Internet or by telephone by 11:59 p.m., Eastern Time, on the date prior to the virtual special meeting date, in order for your shares to be voted at the virtual special meeting. However, if you are a stockholder of record, you may instead mark, sign, date and return the enclosed proxy card, which must be received before the polls close at the virtual special meeting, in order for your shares to be voted at the virtual special meeting. If you are a beneficial owner, please read the voting instructions provided by your bank, broker, trust or other nominee for information on the deadline for voting your shares.
Q:
How do I exchange my Fitbit Common Stock for Merger Consideration?
A:
After the Merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your shares of Fitbit Common Stock for the Merger Consideration. If your shares are held in “street name” by your brokerage firm, bank, trust or other nominee, you will receive instructions from your brokerage firm, bank, trust or other nominee as to how to effect the surrender of your “street name” shares in exchange for the Merger Consideration.
Q:
What happens if I sell my shares of Fitbit Common Stock after the record date but before the virtual special meeting?
A:
The record date for stockholders entitled to vote at the virtual special meeting is earlier than the date of the virtual special meeting and the Effective Time. If you transfer your shares of our Class A Common Stock after the record date but before the virtual special meeting, you will, unless special arrangements are made, retain your right to vote at the virtual special meeting but will transfer the right to receive the Merger Consideration to the person to whom you transfer your shares. As provided in Article V, Section 3 of our Restated Certificate of Incorporation, if you hold Class B Common Stock, each share of Class B Common Stock that you Transfer (as defined in our Restated Certificate of Incorporation) will automatically be converted into one share of Class A Common Stock, unless such Transfer is a Permitted Transfer (as defined in our Restated Certificate of Incorporation). In the event such a Transfer is to a Permitted Transferee (as defined in our Restated Certificate of Incorporation) after the record date, but before the virtual special meeting, unless special arrangements are made, you will retain the right to vote the Transferred shares of Class B Common Stock at the virtual special meeting, but transfer the right to receive the Merger Consideration to the Permitted Transferee. In the event such Transfer is to other than a Permitted Transferee after the record date, but before the virtual special meeting, the shares of Class B Common Stock will convert to Class A Common Stock and the Class B Common Stock so converted will be retired, will not be reissued by Fitbit and will not be able to be voted at the virtual special meeting. In addition, since any shares of Class A Common Stock issued upon any such conversion of shares of Class B Common Stock will be issued after the record date, such shares of Class A Common Stock will not be entitled to vote on the proposals at the virtual special meeting, but the holder will be entitled to receive the Merger Consideration if the Merger is completed.

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In addition, if you sell your shares prior to the virtual special meeting or prior to the Effective Time, you will not be eligible to exercise your appraisal rights in respect of the Merger. For a more detailed discussion of your appraisal rights and the requirements for properly demanding your appraisal rights, see the section captioned “Proposal 1: Adoption of the Merger Agreement—Appraisal Rights” and Annex C to this proxy statement.
Q:
What happens if the proposal to adopt the Merger Agreement is not approved by our stockholders or if the Merger is not completed for any other reason?
A:
If the proposal to adopt the Merger Agreement is not approved by our stockholders or if the Merger is not completed for any other reason, our stockholders will not receive any payment for their shares in connection with the Merger. Instead, we will remain a stand-alone public company and our Class A Common Stock will continue to be listed and traded on the NYSE. Under specified circumstances, we may be required to pay to Google one or more termination fees. Upon termination of the Merger Agreement under certain other specified circumstances, Google may be required to pay us a termination fee.
For more information on the termination fees that may become payable by us or Google pursuant to the Merger Agreement, see the section captioned “The Merger Agreement—Termination Fees.”
Q:
How do our directors and executive officers intend to vote their shares of Fitbit Common Stock in respect of the proposal to adopt the Merger Agreement?
A:
At the close of business on the record date for the virtual special meeting, our directors and executive officers and their respective affiliates beneficially owned and were entitled to vote         shares of Class A Common Stock and          shares of Class B Common Stock at the virtual special meeting, or approximately       % of the voting power of the shares of Fitbit Common Stock outstanding on such date. Although they are not obligated to do so, our directors and executive officers have informed us that they intend to vote all of their shares of Fitbit Common Stock in favor of the adoption of the Merger Agreement.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards, if your shares are registered differently or are held in more than one account. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please sign, date and return (or grant your proxy electronically over the Internet or by telephone for) each proxy card and voting instruction form that you receive to ensure that all of your shares are voted.
Q:
What is householding and how does it affect me?
A:
The SEC’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing an address by delivering a single proxy statement to those stockholders, unless contrary instructions have been received. This procedure reduces the amount of duplicate information that stockholders receive and lowers printing and mailing costs for companies. Certain brokerage firms may have instituted householding for beneficial owners of Fitbit Common Stock held through brokerage firms. If your family has multiple accounts holding Fitbit Common Stock, you may have already received a householding notification from your broker. You may decide at any time to revoke your decision to household, and thereby receive multiple copies of proxy materials. If you wish to opt out of this procedure and receive a separate set of proxy materials in the future, or if you are receiving multiple copies and would like to receive only one, you should contact your broker, trustee or other nominee or our Investor Relations department at the address and telephone number below.
A separate copy of these proxy materials will be promptly delivered upon request by contacting our Investor Relations department by (1) mail at Fitbit, Inc., Attention: Investor Relations, 199 Fremont Street, 14th Floor, San Francisco, California 94105, (2) telephone at (415) 604-4106, or (3) e-mail at investor@fitbit.com

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Q:
Where can I find the voting results of the virtual special meeting?
A:
If available, we may announce preliminary voting results at the conclusion of the virtual special meeting. We intend to publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the virtual special meeting. All reports that we file with the SEC are publicly available when filed. For more information, see the section captioned “Where You Can Find More Information.”
Q:
Who can answer further questions?
A:
For additional questions about the Merger, assistance in submitting proxies or voting shares of Fitbit Common Stock, or to request additional copies of the proxy statement or the enclosed proxy card, please contact our proxy solicitor at:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call:
Toll-Free at (888) 750-5834 (from the U.S. and Canada)
or +1 (412) 232-3651 (from other locations)
Banks & Brokers May Call Collect: (212) 750-5833
If your brokerage firm, bank, trust or other nominee holds your shares in “street name,” you should also call your brokerage firm, bank, trust or other nominee for additional information.


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FORWARD-LOOKING INFORMATION
This proxy statement contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, that are based on our current expectations, assumptions, beliefs, estimates and projections about the proposed Merger, Fitbit and our industry. The forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “plan,” “project,” “should,” “could” and similar expressions. Factors that may affect those forward-looking statements include, among other things:
•
the parties’ inability to consummate the Merger due to failure to satisfy conditions to the completion of the transaction, including the receipt of stockholder approval or the regulatory approvals required for the transaction, which may not be obtained on the terms expected, on the anticipated schedule or at all;
•
the risk that the Merger Agreement may be terminated in circumstances that require us to pay Google termination fees of up to $80 million in connection therewith;
•
the costs, fees, expenses and charges we incur related to the Merger;
•
risks arising from the potential diversion of management’s attention from our ongoing business operations while working to implement the Merger;
•
the outcome of any legal proceedings that may be instituted against us and others related to the Merger Agreement;
•
the effect of the announcement or pendency of the Merger on our ability to effectively recruit and retain our employees, maintain business relationships and operating results and business generally;
•
risks resulting from our compliance with the terms of the Merger Agreement, including restrictions on the conduct of our business during the pendency of the Merger;
•
the possibility that Google could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of our assets to one or more purchasers, that could conceivably produce a higher aggregate value than that available to our stockholders in the Merger;
•
adverse effects on the market price of our Class A Common Stock and on our operating results because of a failure to complete the Merger;
•
the risk that our financial results differ from those set forth in the projections described in this proxy statement; and
•
other risks detailed in our filings with the SEC, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which discuss these and other important risk factors concerning our operations.
We caution you that reliance on any forward-looking statement involves risks and uncertainties and that, although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to revise any of these forward-looking statements to reflect future events or circumstances.


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PARTIES INVOLVED IN THE MERGER
Fitbit, Inc.
199 Fremont Street, 14th Floor
San Francisco, California 94105
We help people lead healthier, more active lives by empowering them with data, inspiration and guidance to reach their goals. We pioneered the connected health and fitness market starting in 2007, and since then, have grown into a leading global health and fitness brand. The Fitbit platform combines wearable devices with software and services to give our users tools to help them reach their health and fitness goals, augmented by general purpose features that add further utility and drive user engagement. Our wearable devices, which include health and fitness trackers and smartwatches, enable our users to view data about their daily activity, exercise and sleep in real-time. Our software and services, which include an online dashboard and mobile app, provide our users with data analytics, motivational and social tools, and virtual coaching through customized fitness plans and interactive workouts.
Google LLC
1600 Amphitheatre Parkway
Mountain View, California 94043
Google’s mission is to organize the world’s information and make it universally accessible and useful, through products and platforms like Android, Chrome, Gmail, Google Drive, Google Maps, Google Play, Search and YouTube. Google is a subsidiary of Alphabet Inc.
Magnoliophyta Inc.
1600 Amphitheatre Parkway
Mountain View, California 94043
Merger Sub, a Delaware corporation and a wholly owned subsidiary of Google, was formed on October 29, 2019 solely for the purpose of engaging in the Transactions. Merger Sub has not engaged in any business activities other than in connection with the Transactions. Upon completion of the Merger, Merger Sub will merge with and into Fitbit, and Merger Sub will cease to exist.

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THE VIRTUAL SPECIAL MEETING
The enclosed proxy is solicited on behalf of our Board for use at the virtual special meeting of stockholders or at any adjournment or postponement thereof.
Date, Time and Place
We will hold the virtual special meeting exclusively online via live webcast on                      ,                   , at              , Pacific Time. The virtual special meeting can be accessed by visiting www.virtualshareholdermeeting.com/FIT2020SM, where you will be able to listen to the meeting live, submit questions and vote online. We encourage you to allow ample time for online check-in, which will open at        , Pacific time. Please note that you will not be able to attend the virtual special meeting in person.
Purpose of the Virtual Special Meeting
At the virtual special meeting, we will ask the holders of Fitbit Common Stock to (1) adopt the Merger Agreement; (2) approve, on a non-binding advisory basis, the compensation proposal; and (3) approve the adjournment proposal.
Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is completed, Merger Sub will merge with and into Fitbit and Fitbit will continue as the Surviving Corporation.
Record Date; Shares Entitled to Vote; Quorum
Only holders of record of Fitbit Common Stock at the close of business on                , 2019, the record date, are entitled to notice of and to vote at the virtual special meeting, including any adjournments or postponements of the virtual special meeting. On the record date,                 shares of Fitbit Common Stock were issued and outstanding, consisting of             shares of Class A Common Stock and           shares of Class B Common Stock, held collectively by approximately             stockholders of record. Each share of Class A Common Stock outstanding as of the record date is entitled to one vote and each share of Class B Common Stock outstanding as of the record date is entitled to ten votes with respect to each proposal to be presented at the virtual special meeting.
The holders of a majority of the aggregate voting power of the shares of Fitbit Common Stock issued and outstanding and entitled to vote at the virtual special meeting, present or represented by proxy at the virtual special meeting will constitute a quorum. Votes cast at the virtual special meeting, either by proxy or at the meeting, will be tabulated by the inspector of elections appointed for the virtual special meeting. If you fail to return your proxy card or to submit a proxy via Internet or telephone, or if you fail to attend the virtual special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. Similarly, if you hold your shares in “street name” and fail to instruct your broker, bank or other nominee how to vote your shares, your shares will not be counted for purposes of determining whether a quorum is present and will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. If you attend the virtual special meeting or if you submit (and do not thereafter revoke) a proxy by duly executing and returning a proxy card or via Internet or telephone, even if you abstain from voting, your shares of Fitbit Common Stock will be counted for purposes of determining whether a quorum is present at the virtual special meeting
In the event that a quorum is not present or represented by proxy at the virtual special meeting, the chairperson of the meeting may adjourn the meeting or may direct that the holders of a majority of the voting power of the shares entitled to vote who are present or represented by proxy at the virtual special meeting adjourn the meeting. If there is not a quorum of stockholders at the virtual special meeting and any proposal to adjourn the meeting submitted to the holders who are present or represented by proxy at the virtual special meeting is not approved, our Board, if permitted by the Merger Agreement, may set a new record date and meeting date for a special meeting to consider the proposal to adopt the Merger Agreement, the compensation proposal and the adjournment proposal, in accordance with the Merger Agreement.

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Vote Required
The votes required to approve each proposal are as follows:
1.
The Merger Agreement must be adopted by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class.
2.
The compensation proposal must be approved. on a non-binding, advisory basis, by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal.
3.
The adjournment proposal must be approved by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal.
Voting by our Directors and Executive Officers
At the close of business on the record date for the virtual special meeting, our directors and executive officers and their respective affiliates beneficially owned and were entitled to vote         shares of Class A Common Stock and          shares of Class B Common Stock at the virtual special meeting, or approximately       % of the voting power of the shares of Fitbit Common Stock outstanding on such date. Our founders, Messrs. Park and Friedman beneficially owned and were entitled to vote, in the aggregate,             shares of Class A Common Stock and          shares of Class B Common Stock, representing approximately        % of the voting power of the shares of Fitbit Common Stock outstanding on the record date. Although they are not obligated to do so, our directors and executive officers have informed us that they intend to vote all of their shares of Fitbit Common Stock “FOR” the proposal to adopt the Merger Agreement, “FOR” the compensation proposal and “FOR” the adjournment proposal.
Certain members of our management and our Board have interests in the Merger that are in addition to those of stockholders generally and may be different from, or in conflict with, your interests as our stockholder. See the section captioned “Proposal 1: Adoption of the Merger Agreement—Interests of our Directors and Executive Officers in the Merger”.
Voting of Proxies
If your shares are registered in your name, you may cause your shares to be voted at the virtual special meeting by returning a signed proxy card or voting at the virtual special meeting via the virtual meeting website. Any stockholder can attend the virtual special meeting by visiting www.virtualshareholdermeeting.com/FIT2020SM, where stockholders may vote and submit questions during the meeting. The virtual special meeting starts at                            , Pacific Time. Please have your 16-digit control number to join the virtual special meeting. Instructions on who can attend and participate via Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com. Additionally, you may submit a proxy authorizing the voting of your shares via the Internet or by telephone by following the instructions printed on the proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy via the Internet or by telephone.
If your shares are registered in your name, you are encouraged to submit a proxy card even if you plan to attend the virtual special meeting.
Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the virtual special meeting will be voted at the virtual special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted “FOR” the proposal to adopt the Merger Agreement, “FOR” the approval of the compensation proposal and “FOR” the approval of the adjournment proposal.
If your shares are held in “street name” through a brokerage firm, bank, trust or other nominee, you may provide voting instructions by completing and returning the voting form provided by your brokerage firm, bank, trust or other nominee or via the Internet or by telephone through your brokerage firm, bank, trust or other nominee, if such a service is provided. To provide voting instructions via the Internet or telephone, you should follow the instructions on the voting form provided by your brokerage

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firm, bank, trust or other nominee. If you plan to attend the virtual special meeting and wish to vote at the meeting, you will need to obtain a proxy, executed in your favor, from your brokerage firm, bank, trust or other nominee giving you the right to vote your shares at the virtual special meeting.
Revocability of Proxies
Any proxy you give pursuant to this solicitation may be revoked by you at any time before it is voted. Proxies may be revoked as follows:
If you have sent a proxy directly to us, you may revoke it by:
•
delivering a written revocation of the proxy or a later dated, signed proxy card, to our Corporate Secretary at 199 Fremont Street, 14th Floor, San Francisco, California 94105, on or before the business day prior to the virtual special meeting;
•
attending the virtual special meeting and voting at the meeting (your attendance at the virtual special meeting will not, by itself, revoke your proxy, so you must vote at the virtual special meeting to revoke your proxy); or
•
signing and delivering a new proxy, relating to the same shares of Fitbit Common Stock and bearing a later date; or by submitting another proxy by telephone or via the Internet after the date of your prior proxy and by the date and time indicated on the applicable proxy card(s).
If you have instructed your brokerage firm, bank, trust or other nominee to vote your shares, you may revoke your proxy only by following the directions received from your brokerage firm, bank, trust or other nominee to change those instructions.
Your attendance at the virtual special meeting does not alone automatically revoke your proxy. If you have instructed your brokerage firm, bank, trust or other nominee how to vote your shares, the above-described options for revoking your proxy do not apply. Instead, you must follow the directions provided by your brokerage firm, bank, trust or other nominee to change your voting instructions.
Our Board’s Recommendations
Our Board has unanimously approved the Merger Agreement and the Merger and determined that the Merger Agreement and the Merger are fair to and in the best interests of our stockholders. Our Board unanimously recommends that our stockholders (1) vote “FOR” the proposal to adopt the Merger Agreement; (2) vote “FOR” the compensation proposal; and (3) vote “FOR” the adjournment proposal. See the section captioned “Proposal 1: Adoption of the Merger Agreement—Recommendation of our Board and Reasons for the Merger.” Our stockholders should carefully read this proxy statement in its entirety for more detailed information concerning the Merger Agreement and the Transactions, including the Merger. In addition, our stockholders should carefully read the Merger Agreement, which is attached as Annex A to this proxy statement.
Effect of Abstentions and Broker Non-Votes
The Merger Agreement must be adopted by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class. If you abstain from voting, fail to cast your vote, either at the virtual special meeting or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement.
The compensation proposal and the adjournment proposal must be approved the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class, that are present or represented by proxy at the virtual special meeting and are voted “FOR” or “AGAINST” the proposal. If you abstain from voting, fail to cast your vote, either at the virtual special meeting or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the vote for the compensation proposal or the adjournment proposal (provided that a quorum is present). It is very important that all of our stockholders vote their shares, so please promptly complete and return the enclosed proxy card.

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Solicitation of Proxies
This proxy solicitation is being made by Fitbit on behalf of our Board and will be paid for by us. Our directors, officers and employees may also solicit proxies by personal interview, mail, e-mail, telephone, facsimile or other means of communication. These persons will not be paid additional remuneration for their efforts. We have also retained Innisfree M&A Incorporated, a proxy solicitation firm, to assist in the solicitation of proxies for a fee of approximately $15,000 plus the reimbursement of out-of-pocket expenses incurred by it on our behalf. We may reimburse banks, brokers and other nominees representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. You should not send your stock certificates, if any, with your proxy card. A letter of transmittal with instructions for the surrender of your stock certificates, if any, and book-entry entitlements will be mailed to our stockholders as soon as practicable after completion of the Merger.
Stockholder List
A list of our stockholders entitled to vote at the virtual special meeting will be available for examination by any of our stockholders at the virtual special meeting. For ten days prior to the virtual special meeting, this stockholder list will be available for inspection by any stockholder for any purpose germane to the virtual special meeting during ordinary business hours at our principal executive offices located at 199 Fremont Street, 14th Floor, San Francisco, California 94105. A list of stockholders entitled to vote at the virtual special meeting will also be available for examination on the Internet through the virtual web conference during the virtual special meeting.
Participating in the Virtual Special Meeting
To participate in the virtual special meeting, visit www.virtualshareholdermeeting.com/FIT2020SM and enter the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials.
If you wish to submit a question during the virtual special meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/FIT2020SM, type your question into the “Ask a Question” field, and click “Submit.” If your question is properly submitted during the relevant portion of the meeting agenda, we will respond to your question during the live webcast. A webcast replay of the virtual special meeting, including the Q&A session, will also be archived on the “Investor Relations” section of our website, which is located at https://investor.fitbit.com.
If we experience technical difficulties during the virtual special meeting (e.g., a temporary or prolonged power outage), we will determine whether the meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any situation, we will promptly notify stockholders of the decision via www.virtualshareholdermeeting.com/FIT2020SM. If you encounter technical difficulties accessing our meeting or asking questions during the virtual special meeting, a support line will be available on the login page of the virtual meeting website.
Anticipated Date of Completion of the Merger
We are working toward completing the Merger as quickly as possible and expect the Merger to be completed in 2020. However, the Merger continues to be subject to various closing conditions, including our stockholder approval and the receipt of the Antitrust Approvals. Therefore, we cannot assure you that all conditions to the Merger will be satisfied or, if satisfied, the date by which they will be satisfied.
Householding of Virtual Special Meeting Materials
The SEC’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing an address by delivering a single proxy statement to those stockholders, unless contrary instructions have been received. This procedure reduces the amount of duplicate information that stockholders receive and lowers printing and mailing costs for companies. Certain brokerage firms may have instituted householding for beneficial owners of Fitbit Common Stock held through brokerage firms. If your family has multiple accounts holding Fitbit Common Stock, you may have already received a householding notification from your broker. You may decide at any time to revoke your decision to household, and thereby receive multiple copies of proxy materials. If you wish to opt out of this procedure and receive a separate set of proxy materials in the future, or if you are receiving multiple copies and would like to receive only one, you should contact your broker, trustee or other nominee or our Investor Relations department at the address and telephone number below. A separate copy of these proxy materials will be promptly delivered upon request by

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contacting our Investor Relations department by (1) mail at Fitbit, Inc., Attention: Investor Relations, 199 Fremont Street, 14th Floor, San Francisco, California 94105; (2) telephone at (415) 604-4106; or (3) e-mail at investor@fitbit.com.
Other Matters
At this time, we know of no other matters to be voted on at the virtual special meeting. If any other matters properly come before the virtual special meeting, your shares of Fitbit Common Stock will be voted in accordance with the discretion of the appointed proxy holders.

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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT
The following discussion describes material aspects of the Merger. While we believe that the following description covers the material terms of the Merger, the description may not contain all of the information that may be important to you. The discussion of the Merger in this proxy statement is qualified in its entirety by reference to the Merger Agreement, which is attached as Annex A to this proxy statement and incorporated by reference into this proxy statement. We encourage you to read carefully this entire proxy statement, including the Merger Agreement, for a more complete understanding of the Merger.
General
If the proposal to adopt the Merger Agreement receives the Requisite Company Stockholder Approval and, upon the terms and subject to the conditions of the Merger Agreement, the Merger is completed, Merger Sub will merge with and into Fitbit, and Fitbit will continue as the Surviving Corporation and as a wholly owned subsidiary of Google.
As a result of the Merger, Fitbit will become a wholly owned subsidiary of Google, and our Class A Common Stock will no longer be publicly traded and will be delisted from the NYSE. In addition, our Class A Common Stock will be deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC. If the Merger is completed, you will not own any shares of the capital stock of the Surviving Corporation.
The Effective Time will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as Fitbit and Google may agree and specify in such certificate of merger).
As a result of the Merger, each outstanding share of Fitbit Common Stock (other than the shares held by Google, Merger Sub, Fitbit (including shares held in treasury by Fitbit) or any of their respective subsidiaries and shares owned by a holder who has properly demanded appraisal under the DGCL (such shares, the “Excluded Shares”)) will be converted into the right to receive the Merger Consideration. In addition, the treatment of our outstanding equity awards is described in the section captioned “The Merger Agreement—Treatment of Fitbit Equity Awards and Warrant.”
After the Merger is completed, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a stockholder (except that stockholders who properly exercise their appraisal rights may have the right to receive a payment for the “fair value” of their shares as determined pursuant to an appraisal proceeding before the Delaware Court of Chancery as contemplated by the DGCL, as described in the section captioned “—Appraisal Rights”).
Background of the Merger
The following is a summary of events, meetings and discussions that are relevant to the decision of our Board to approve the Merger Agreement and recommend that our stockholders adopt the Merger Agreement.
Our Board regularly reviews and assesses Fitbit’s long-term strategies and objectives in order to strengthen our business and enhance stockholder value. As part of its assessment, our Board has regularly considered a variety of strategic alternatives including, among other things, entries into new lines of business and strategic partnerships, acquisitions of other companies and businesses, and a sale of Fitbit to a third party. From time to time, other companies have contacted Fitbit to explore potential strategic transactions. In connection with these assessments, our Board and senior management sometimes have enlisted the assistance of financial advisors and outside legal advisors.
In early 2018, Fitbit and Google began collaborating to enable Fitbit’s use of Google’s Cloud Healthcare API to facilitate the further integration of Fitbit’s products and services into the healthcare system. In connection with this collaboration initiative, we entered into a mutual confidentiality and non-disclosure agreement with Google effective as of January 29, 2018. Fitbit and Google publicly announced this collaboration on April 30, 2018.
At a meeting of our Board held on April 26, 2019, our Board discussed the competitive environment for our products and services and began to explore broadly our potential strategic alternatives. In this context, our Board discussed with our senior management that it would be useful to begin preliminary discussions with one or more potential financial advisory firms to get their preliminary perspectives on Fitbit. The Board planned to discuss these matters further at its July 1, 2019 meeting.
On May 3, 2019, members of our senior management had discussions with representatives of a financial advisory firm to discuss the strategic landscape for Fitbit. Members of our senior management had additional discussions with representatives of this

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financial advisory firm on May 6, May 22 and May 23 regarding Fitbit and our potential strategic alternatives. These discussions occurred under a confidentiality agreement with this financial advisory firm entered into as of January 17, 2019 in the context of discussions regarding cash management and capital allocation strategies for Fitbit.
On June 6, 2019, we entered into a confidentiality agreement with Qatalyst Partners. We approached Qatalyst Partners for similar discussions regarding the strategic landscape for Fitbit and potential strategic alternatives, because of its familiarity with our company, its perspectives on the strategic landscape in our industry, and its extensive experience acting as financial advisor to technology companies evaluating strategic alternatives.
Independent of these preliminary discussions with financial advisors, including Qatalyst Partners, on June 8, 2019, the chief executive officer of a strategic party (“Party A”) emailed James Park, our chief executive officer, to request that they have dinner.
On June 11, 2019, Mr. Park and the chief executive officer of Party A had dinner and discussed generally the wearables technology landscape.
On June 18, 2019, members of our senior management met with representatives of Qatalyst Partners to preliminarily discuss the evolving strategic landscape in the wearable technology and digital health markets and Fitbit’s position in this landscape, preliminary financial perspectives on Fitbit, and if our Board were to direct engagement with third parties, considerations in designing a process to evaluate potential third party interest and maximize value in a strategic transaction, and third parties who would potentially be interested in acquiring Fitbit.
On June 24, 2019, Qatalyst Partners provided to Fitbit a draft engagement letter for Qatalyst Partners to act as Fitbit’s financial advisor with respect to a potential change in control sale transaction.
On July 1, 2019, our Board held a meeting, together with members of our senior management and representatives of Fenwick & West LLP (“Fenwick & West”), Fitbit’s outside counsel. A representative of Fenwick & West discussed, among other things, our Board’s fiduciary duties when considering strategic alternatives including a potential sale of Fitbit. Following this discussion, representatives of Qatalyst Partners joined the meeting and discussed with our Board, among other things, the evolving strategic landscape in the wearable technology and digital health markets and Fitbit’s position in this landscape, preliminary financial perspectives on Fitbit, considerations in designing a process to evaluate potential third party interest and maximize value in a strategic transaction, and third parties who would potentially be interested in acquiring Fitbit. Representatives of Qatalyst Partners then left the meeting, and a representative of Fenwick & West reviewed with our Board the key terms of the draft engagement letter proposed by Qatalyst Partners. Our Board then discussed the experience and merits of engaging Qatalyst Partners as its financial advisor as compared to the other financial advisory firm with whom we had discussions in May 2019 and determined to further consider approval of the Qatalyst Partners engagement letter subsequent to the meeting. Our Board also further discussed third parties who would potentially be interested in acquiring Fitbit and which of such parties should be initially contacted to gauge their interest.
At the request of the chief executive officer of Party A, on July 2, 2019, Mr. Park and other members of our senior management had dinner with the chief executive officer of Party A and other members of Party A’s management to discuss generally the wearables technology landscape.
On July 5, 2019, by unanimous written consent, our Board approved the engagement of Qatalyst Partners as its financial advisor with respect to a potential change in control sale transaction. On July 8, 2019, Fitbit executed the engagement letter with Qatalyst Partners.
Based on discussions at the July 1 meeting and at the direction of the Board, in the following weeks, members of our senior management further discussed with Qatalyst Partners the strategic parties who should be initially contacted to gauge their interest in a potential acquisition of Fitbit. It was determined that no financial sponsors would likely be interested in entering into a strategic transaction with Fitbit at that time given the financial and business position of Fitbit.
From July 22, 2019 to July 25, 2019, consistent with our Board’s direction and discussions with members of our senior management, representatives of Qatalyst Partners and our management contacted nine strategic parties, including Google, to explore their potential interest in Fitbit.
On July 25, 2019, our Board held a telephonic meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. At the meeting, among other things, representatives of Qatalyst Partners updated our

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Board on its outreach to strategic parties regarding a potential acquisition of Fitbit. In the weeks following such meeting, at the direction of our Board, representatives of Qatalyst Partners and our management contacted an additional four parties at various points in time to explore their potential interest in acquiring Fitbit.
During the month of August 2019, Fitbit amended its existing confidentiality agreement with Google to extend its coverage period and entered into confidentiality agreements with three strategic parties (“Party B”, “Party C” and “Party D”, respectively) that expressed initial interest in evaluating a potential transaction with Fitbit. None of the confidentiality agreements with these parties contained a standstill provision that would prevent such party from making an acquisition proposal following the entry by Fitbit into a definitive merger agreement with another party. Fitbit then provided each of these parties with access to an electronic data room containing certain confidential business and financial information regarding Fitbit, including limited financial projections prepared by our management that were designed to demonstrate the potential of Fitbit under favorable assumptions regarding our future operating environment, prospects and our competitive position in our industry (the “Advocacy Case”), and held management meetings to provide an overview of Fitbit’s business with each of these interested parties. The Advocacy Case is more fully described below in the section captioned “—Financial Projections.”
On August 8, 2019, Mr. Park and other members of our senior management met with members of Party A’s management to discuss Fitbit’s business and the wearables technology landscape.
On August 16, 2019, we entered into a confidentiality agreement with Party A. The confidentiality agreement with Party A did not contain a standstill provision that would prevent Party A from making an acquisition proposal following the entry by Fitbit into a definitive merger agreement with another party.
On August 20, 2019, members of our senior management provided an overview of Fitbit’s business to members of Google’s management.
On August 21, 2019, Mr. Park met with a senior executive of Party A to discuss Fitbit’s business and the wearables technology landscape.
On August 29, 2019, Google and representatives of Cleary Gottlieb Steen & Hamilton LLP (“Cleary Gottlieb”), Google’s outside counsel, held a legal due diligence session with our senior management and representatives of each of Fenwick & West and Qatalyst Partners via telephone conference.
On August 30, 2019, representatives of Qatalyst Partners, on behalf of Fitbit, sent bid process letters to Google, Party B, Party C and Party D inviting each party to submit a preliminary indication of interest for the acquisition of Fitbit by September 19, 2019. Because Party A was pursuing a parallel process in its discussions with Fitbit, Party A was not sent a bid process letter.
On September 3, 2019, Google and representatives of Cleary Gottlieb held a legal due diligence session with our senior management and representatives of each of Fenwick & West and Qatalyst Partners via telephone conference.
On September 6, 2019, members of our senior management met with members of Party A’s senior management to further discuss Fitbit’s product and technical roadmap.
On each of September 15, 2019 and September 18, 2019, Mr. Park met with the chief executive officer and another senior executive of Party A to discuss Fitbit’s business, and the parties agreed to continue further discussions.
On September 18, 2019, representatives of Party C informed representatives of Qatalyst Partners that Party C would not be submitting a proposal to acquire Fitbit.
On September 19, 2019, representatives of Party B informed representatives of Qatalyst Partners that Party B would not be submitting a proposal to acquire Fitbit. On the same day, a representative of Party D informed representatives of Qatalyst Partners that it was not interested in pursuing an acquisition of Fitbit at that time, but that it would consider pursuing an investment in Fitbit in parallel with a strategic commercial partnership.
On the same day, representatives of Google contacted representatives of Qatalyst Partners and conveyed that Google was not prepared to submit a proposal at that time. Google’s representatives noted, however, that members of Google’s executive team wanted to meet with Mr. Park to discuss a potential strategic transaction.

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On the same day, representatives of Qatalyst Partners, on behalf of Fitbit, contacted representatives of Party A to discuss a potential transaction, and informed Party A that it would need to move expeditiously given the overall process timing.  
On September 20, 2019, Reuters published an article stating that Fitbit was exploring a potential sale of the company (the “September 20 Article”). The closing price of Fitbit’s Class A Common Stock on September 19, 2019, the last full trading day prior to the publication of the September 20 Article, was $3.67 per share, and the closing price of Fitbit’s Class A Common Stock on September 20, 2019 was $4.10 per share.
At various points in time after the publication of the September 20 Article, representatives of eight parties that had not been previously contacted by Qatalyst Partners or our management contacted us and representatives of Qatalyst Partners to discuss a potential acquisition of Fitbit. However, after initial discussions, none of these contacts resulted in any of the parties making an acquisition proposal or requesting access to diligence information.
On September 24, 2019, representatives of Party A informed representatives of Qatalyst Partners that Party A was potentially interested in acquiring Fitbit and requested access to additional diligence information and a management presentation. On the same day, Mr. Park met with members of Google’s executive team.
On September 25, 2019, Mr. Park met with members of Google’s executive team to discuss a potential acquisition of Fitbit by Google and the strategic fit between the companies. 
On October 1, 2019, in response to Party A’s request on September 24, Party A was provided with access to the electronic data room containing certain confidential business and financial information related to Fitbit, including the Advocacy Case. 
On October 2, 2019, Google submitted a written non-binding indication of interest to acquire Fitbit for $4.59 per share (the “October 2 Proposal”). The October 2 Proposal included a request that Fitbit negotiate exclusively with Google with respect to an acquisition transaction.
On October 3, 2019, representatives of Qatalyst Partners spoke to representatives of Google regarding their proposal and, at the direction of Mr. Park, informed Google that it would need to substantially increase its offer in order to continue discussions with Fitbit regarding an acquisition, but noted that Fitbit would provide a more detailed response following the next meeting of our Board, which was scheduled for the following week. Also on that day, representatives of Qatalyst Partners spoke to representatives of Party A and reiterated that Party A needed to accelerate its due diligence process and submit a proposal as soon as possible in order to remain engaged in potential acquisition discussions. 
On October 7, 2019, our senior management met with representatives of Party A to provide information regarding Fitbit’s business.
On October 8, 2019, our Board held a telephonic meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. Among other things, representatives of Qatalyst Partners reviewed with our Board the October 2 Proposal and the status of ongoing discussions with Google and Party A. Also at this meeting, our senior management presented to our Board a draft of certain risk-adjusted non-public unaudited financial forecasts for Fitbit as a standalone company (the “Projections”), described more fully below in the section captioned “—Financial Projections,” reflecting our management’s best currently available estimates and judgments of Fitbit’s future performance as a standalone company.
On October 9, 2019, representatives of Party A contacted representatives of Qatalyst Partners and indicated that Party A would decide whether to make a proposal to acquire Fitbit by October 14, 2019.
On October 10, 2019, our Board held a telephonic meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. At the meeting, among other things, our Board further discussed with our senior management the Projections and subsequently approved such Projections for use by Qatalyst Partners in its financial analyses and directed that the Projections be shared with Google and Party A. Representatives of Qatalyst Partners then reviewed with our Board certain financial aspects of the $4.59 per share price reflected in the October 2 Proposal. Following discussion, our Board directed representatives of Qatalyst Partners to inform Google that the October 2 Proposal provided insufficient value for Fitbit’s stockholders, but that our Board could consider supporting a proposal to acquire Fitbit at a price of $6.00 per share. Our Board also directed representatives of Qatalyst Partners to inform Party A that it would need to submit an indication of interest as soon as possible.

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Later on October 10, 2019, at the direction of our Board, representatives of Qatalyst Partners informed representatives of Google that $4.59 per share was not a proposal that our Board would accept but that our Board could consider supporting an acquisition price of $6.00 per share. Representatives of Qatalyst Partners also spoke to representatives of Party A and encouraged Party A to submit a proposal immediately following the meeting of Party A’s board of directors scheduled for October 11, 2019.  The representatives of Party A indicated that Party A could be in a position to submit a proposal on October 12, 2019.
On October 11, 2019, Google submitted a revised written non-binding indication of interest to acquire Fitbit for $5.05 per share, which proposal included a request that Fitbit negotiate exclusively with Google and requested a response from Fitbit by the end of the following day. Later that day, consistent with our Board’s direction, representatives of Qatalyst Partners sent the Projections to Google.
On the morning of October 12, 2019, the chief executive officer of Party A called Mr. Park and provided a verbal proposal to acquire Fitbit for $5.90 per share. Shortly thereafter, Party A submitted a written non-binding indication of interest to acquire Fitbit for $5.90 per share, which offer included a request that Fitbit enter into exclusive negotiations with Party A with respect to an acquisition. Also that morning, consistent with our Board’s direction, representatives of Qatalyst Partners sent the Projections to Party A.
Later that morning, in consultation with our management, representatives of Qatalyst Partners contacted representatives of Google and indicated that Google would need to significantly increase its price due to the receipt by Fitbit of a competing proposal that was meaningfully higher than Google’s proposed price of $5.05 per share. Representatives of Qatalyst Partners also indicated that our Board would be meeting later that afternoon to review the proposals received to date.
Early that same afternoon, Google submitted a revised written non-binding indication of interest to acquire Fitbit for $6.50 per share, which proposal also included an initial draft of an exclusivity agreement providing for exclusive negotiations between Fitbit and Google until November 2, 2019 and stated that such proposal would expire that same day at 6:30 p.m., Pacific Time if such exclusivity agreement were not executed by Fitbit by such time.
Later that same afternoon, representatives of Qatalyst Partners informed Party A that Fitbit had received an acquisition proposal with a price that was meaningfully higher than Party A’s proposed price of $5.90 per share, and that Party A would need to significantly increase its offer within the next few hours as our Board would be meeting to discuss the status of the parties’ proposals.
Later that same afternoon, at 3:00 p.m. Pacific Time, our Board held a telephonic meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. A representative of Qatalyst Partners reviewed with our Board the progress of its discussions with each of Google and Party A. Our Board, together with its legal and financial advisors, considered the appropriate strategies to obtain the highest possible price for our stockholders, and also considered the risk that an extended bidding process might cause one or both of the parties to withdraw their bids and cease negotiations to acquire Fitbit. A representative of Fenwick & West discussed with our Board the regulatory risks that would exist in a potential transaction with each of Google and Party A. Following such discussions, our Board directed Qatalyst Partners to instruct each of Google and Party A to submit its best and final proposal to acquire Fitbit that evening and that such proposal should contain the highest price that such party would be willing to pay to acquire Fitbit and should also provide that in the definitive agreement for such acquisition such party would agree to pay Fitbit a $250 million reverse termination fee in the event the transaction failed to close due to a failure to receive any required antitrust approvals (the “Reverse Termination Fee”). Promptly following the Board meeting, representatives of Qatalyst Partners contacted representatives of Google and Party A to request each party’s best and final proposal consistent with the directions provided by our Board and indicated to each party that our Board would be convening that evening at 7:00 p.m., Pacific Time, to review each party’s proposal and that our Board would most likely decide at that meeting the party with whom it would enter into exclusivity.
Later that same afternoon, the chief executive officer of Party A contacted Mr. Park and asked him to provide a specific price per share at which our Board would agree to enter into exclusive negotiations with Party A. Mr. Park responded that he could not provide any specific guidance beyond encouraging Party A to submit its best and final proposal. Shortly thereafter, a representative of Party A informed representatives of Qatalyst Partners that Party A would not be submitting a revised proposal at that time. 
Later that same afternoon, Google submitted a revised written non-binding indication of interest to acquire Fitbit for $7.05 per share. The revised proposal also confirmed that Google would agree to the Reverse Termination Fee, and indicated that such

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proposal was contingent on Fitbit’s agreement to negotiate exclusively with Google regarding a potential acquisition until November 2, 2019.
At 7:00 p.m., Pacific Time, that same evening, our Board held a telephonic meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. A representative of Qatalyst Partners reviewed with our Board its discussions with Google and Party A over the course of that afternoon. The Board noted that Google submitted the $7.05 per share proposal in response to our Board’s request for a best and final offer, that Google was willing to have the definitive agreement for an acquisition provide for the Reverse Termination Fee, and that Party A had indicated it would not be submitting a higher bid at that time. Following discussion of the information then available, our Board directed Fenwick & West to negotiate an exclusivity agreement with Google providing that Fitbit would enter into exclusive negotiations with Google through November 2 regarding an acquisition of Fitbit for $7.05 per share and providing for the Reverse Termination Fee, and authorized our senior management to enter into such agreement.
Shortly after our Board’s meeting, representatives of Qatalyst Partners delivered to Google a revised draft of the exclusivity agreement prepared by Fenwick & West.
Later that evening, while representatives of Fenwick & West and Cleary Gottlieb were negotiating the exclusivity agreement, the chief executive officer of Party A contacted Mr. Park and provided a verbal proposal to acquire Fitbit at a price of $7.30 per share in response to the request to submit its best and final offer earlier that afternoon. The chief executive officer of Party A noted that such price was the reserve price that Party A would be willing to pay to acquire Fitbit but did not address Fitbit’s request for a Reverse Termination Fee.
Later that same evening, Mr. Park and representatives of Qatalyst Partners spoke to a representative of Google and informed him that another party had proposed to acquire Fitbit at a meaningfully higher price, and that Google would need to increase its price if it wanted Fitbit to enter into an exclusivity agreement with Google. The parties agreed to resume discussions the following day after the Google representative had the opportunity to discuss the recent events with senior management of Google.
On October 13, 2019, Google submitted a revised written proposal to acquire Fitbit at a price of $7.35 per share. The revised proposal was conditioned on Fitbit immediately entering into the exclusivity agreement. In light of the fact that our Board had approved entry into exclusivity with Google at an acquisition price of $7.05 per share, that Google’s proposal of $7.35 per share was stated to be Google’s best and final offer, that the chief executive of Party A had stated that $7.30 per share was the reserve price that Party A would be willing to pay for Fitbit in response to our Board’s request for its best and final offer and Party A had not addressed Fitbit’s request for a Reverse Termination Fee, that Google’s proposal included its commitment to the Reverse Termination Fee, and its requirement that the exclusivity agreement be entered into immediately, Mr. Park consulted with representatives of Fenwick & West and Qatalyst Partners, and entered into the exclusivity agreement with Google, which provided Google with an exclusive negotiating period through November 2, 2019 and provided Fitbit with the right to terminate exclusivity in the event that Google determined to pursue the acquisition of Fitbit at a price below $7.35 per share or on terms that did not provide for the Reverse Termination Fee. 
Later that same day, following execution of the exclusivity agreement with Google, Party A submitted a non-binding written indication of interest confirming Party A’s verbal proposal of the preceding day to acquire Fitbit for $7.30 per share, which did not address the Reverse Termination Fee. Consistent with Fitbit’s obligations under the exclusivity agreement, neither Fitbit nor Qatalyst Partners responded to Party A regarding such proposal.
That evening, representatives of Fenwick & West and Cleary Gottlieb discussed, among other things, the process for confirmatory due diligence and the negotiation of the merger agreement. Representatives of Cleary Gottlieb informed Fenwick & West that Google desired, subject to the authorization of our Board, to negotiate post-closing employment agreements with each of Mr. Park and Eric Friedman, our chief technology officer, prior to entering into the merger agreement. A representative of Fenwick & West informed representatives of Cleary Gottlieb that our Board would not authorize Messrs. Park and Friedman to engage in such discussions until the negotiations regarding the principal terms of the merger agreement had been substantially advanced. The representative of Fenwick & West also proposed to representatives of Cleary Gottlieb that neither Mr. Park nor Mr. Friedman would enter into a voting, support or similar agreement or arrangement regarding their votes as stockholders to adopt the merger agreement.
On October 14, 2019, our Board held a telephonic meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. At the meeting, a representative of Qatalyst Partners reviewed with our Board the negotiations with each of Google and Party A that had taken place following our Board’s prior meeting on the evening of October

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12, 2019. Following discussion, our Board ratified Fitbit’s execution of the exclusivity agreement based on Google’s $7.35 per share proposal and commitment regarding the Reverse Termination Fee and based on the Board’s prior determination and authorization at the telephonic Board meeting on the evening of October 12.
From October 15, 2019 through October 31, 2019, Fitbit provided additional due diligence materials to Google in the electronic data room, and representatives of Google and Cleary Gottlieb continued their due diligence review of Fitbit, including reviewing such information in the electronic data room and holding in-person and telephonic meetings with Fitbit’s management.
On October 16, 2019, representatives of Cleary Gottlieb delivered to Fenwick & West an initial draft of the merger agreement. The draft provided for, among other things, the Reverse Termination Fee, a termination fee payable by Fitbit under certain customary circumstances (the “Termination Fee”) equal to 4.5% of the equity value of the transaction, a “no-vote fee” equal to 1% of the equity value of the transaction, which would become payable if our stockholders did not approve the transaction at a special meeting of stockholders at which a vote on the transaction occurred (the “No-Vote Fee”), and a definition of “Company Material Adverse Effect” with limited exceptions. The draft merger agreement further included customary restrictions on soliciting other proposals from third parties and a “fiduciary out” that would permit our Board to negotiate with a third party that submits an unsolicited acquisition proposal, and to terminate the merger agreement to accept a superior proposal after providing Google with an opportunity to match such superior proposal and paying the Termination Fee.
On the morning of October 21, 2019, representatives of Fenwick & West delivered a revised draft of the merger agreement to Cleary Gottlieb. The revised draft provided for, among other things, a Termination Fee equal to 2.5% of the equity value of the transaction and certain additional exceptions to the definition of “Company Material Adverse Effect” for, among other things, the impact of tariffs on Fitbit’s business or any stockholder litigation arising in connection with the merger.
On October 22, 2019, our Board held a meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. At the meeting, a representative of Fenwick & West reviewed with our Board the material terms of the draft merger agreement and the open issues that remained subject to further negotiation, including the size of the Termination Fee and the appropriateness of a 1.0% No Vote Fee in the context of a transaction in which Messrs. Park and Friedman would not be providing voting or support agreements for the transaction. Our Board provided direction to the representative of Fenwick & West regarding the open issues and concluded that the No Vote Fee was appropriate in such context.
On October 24, 2019, representatives of Cleary Gottlieb delivered a revised draft of the merger agreement to Fenwick & West. The revised draft provided for, among other things, a Termination Fee equal to 4.5% of the equity value of the transaction.
On October 26, 2019, our Board held a telephonic meeting, together with members of our senior management and representatives of Fenwick & West and Qatalyst Partners. At the meeting, among other things, a representative of Fenwick & West updated our Board on the status of negotiations with Google regarding the terms of the merger agreement and noted that, except for the amount of the Termination Fee (regarding which our Board discussed the potentially acceptable range), there were no material issues still subject to negotiation. The representative of Fenwick & West also reviewed with our Board the provisions of Section 203 of the Delaware General Corporation Law (“Section 203”). After the review, our Board approved permitting Messrs. Park and Friedman to enter into negotiations with Google regarding post-closing employment arrangements. Such negotiations were also approved by our Board with the purpose and intent that the restrictions on business combinations contained in Section 203 not apply to the merger transaction solely by virtue of such permitted negotiations.
On the same day, representatives of Fenwick & West delivered a revised draft of the merger agreement to Cleary Gottlieb. The revised draft provided for, among other things, a Termination Fee equal to 3.5% of the equity value of the transaction. Also on the same day, representatives of Fenwick & West delivered to Cleary Gottlieb an initial draft of the confidential disclosure schedules that Fitbit delivered to Google in connection with the draft merger agreement.
From October 27 through October 31, 2019, Google and Messrs. Park and Friedman, using separate employment counsel, negotiated the terms of their post-closing employment arrangements with Google.
On October 28, 2019, Reuters published an article stating that Alphabet Inc., the parent company of Google, had made an offer to acquire Fitbit. The closing price of Fitbit’s Class A Common Stock on October 25, 2019, the last full trading day prior to the publication of such article, was $4.31 per share, and, the closing price of Fitbit’s Class A Common Stock on October 28, 2019 following publication of the article was $5.64 per share.

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On October 29, 2019, representatives of Cleary Gottlieb delivered a revised draft of the merger agreement to Fenwick & West. The revised draft provided for, among other things, a Termination Fee equal to 4.25% of the equity value of the transaction.
From October 30, 2019 through October 31, 2019, Fenwick & West, representatives of Google and Cleary Gottlieb negotiated the remaining open terms in the merger agreement. On October 31, 2019, representatives of Fitbit and Google tentatively agreed on a Termination Fee of approximately 3.8% of the equity value in the transaction, or $80 million.
Later on October 31, 2019, our Board held a meeting, with members of our senior management and representatives of Qatalyst Partners, Fenwick & West and Arnold & Porter Kaye Scholer LLP (“Arnold & Porter”), special antitrust counsel to Fitbit, present. A representative of our senior management reviewed with our Board our financial results for the fiscal quarter ended September 28, 2019 and the Projections updated only to reflect the results of such completed quarter, and our Board ratified the use of such Projections by Qatalyst Partners in its financial analyses. A representative of Fenwick & West reviewed with our Board the terms of the final merger agreement, which had previously been distributed to the members of our Board, and of Messrs. Park and Friedman’s post-closing employment arrangements with Google. A representative of Fenwick & West reviewed with our Board its fiduciary duties in connection with potentially approving the merger agreement, the merger and the related transactions and reviewed the Board’s direction of the strategic process to solicit and negotiate acquisition proposals and evaluate potential transactions, including as compared to remaining a stand-alone company. A representative of Arnold & Porter reviewed with our Board the regulatory process for the transaction. Representatives of Qatalyst Partners then reviewed with our Board its financial analyses of the merger consideration of $7.35 in cash per share of the Company Class A Common Stock. Qatalyst Partners then rendered to our Board its oral opinion, subsequently confirmed in writing, to the effect that, as of October 31, 2019 and based upon and subject to the various assumptions, qualifications, limitations and other matters set forth therein, the merger consideration of $7.35 in cash per share of the Company Class A Common Stock to be received pursuant to, and in accordance with, the terms of the draft of the merger agreement as of such date by the Holders, in their capacity as such Holders, was fair, from a financial point of view, to such Holders. For more information about Qatalyst Partners’ opinion, see below under the section captioned “—Opinion of Fitbit’s Financial Advisor.” Following an executive session of the non-employee members of the Board to further discuss whether to enter into the merger agreement, and further discussion and consideration of the merger agreement and the merger, our Board unanimously determined that the merger agreement and the merger were fair to and in the best interests of our stockholders, approved the merger agreement, the merger and related transactions, directed that the adoption of the merger agreement be submitted to a vote at a meeting of our stockholders, and resolved to recommend that our stockholders adopt the merger agreement.
Early in the morning on November 1, 2019, Fitbit, Google and Merger Sub executed the Merger Agreement. Concurrently with the execution of the Merger Agreement, Messrs. Park and Friedman entered into offer letters providing for their post-closing employment arrangements with Google.  
On November 1, 2019, prior to the opening of the financial markets that day, Fitbit and Google publicly announced entry into the Merger Agreement.
Recommendation of our Board and Reasons for the Merger
Recommendation of our Board
Our Board has unanimously (1) determined that the Merger Agreement and the Merger are fair to and in the best interests of our stockholders, and (2) approved the Merger Agreement and the Merger.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE (1) “FOR” THE PROPOSAL TO ADOPT THE MERGER AGREEMENT; (2) “FOR” THE COMPENSATION PROPOSAL; AND (3) “FOR” THE ADJOURNMENT PROPOSAL.
Reasons for the Recommendation of the Board of Directors
Our Board unanimously (a) determined that the Merger Agreement and the Merger are fair to and in the best interests of Fitbit stockholders, (b) approved the Merger Agreement and the Merger, (c) directed that the adoption of the Merger Agreement be submitted to a vote at a meeting of the stockholders of Fitbit and (d) resolved to recommend that Fitbit stockholders adopt the Merger Agreement (the “Board Recommendation”).

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In evaluating the Merger Agreement, the Merger and the Transactions, our Board consulted with our outside legal counsel, financial advisor and senior management. In recommending that our stockholders vote in favor of adoption of the Merger Agreement, our Board considered numerous significant factors relating to the Merger Agreement, the Merger and the Transactions, including the following factors (which are not necessarily presented in order of relative importance):
Financial Terms of the Merger and Certainty of Value for our Stockholders. Our Board considered that the Merger Consideration would provide our stockholders with the opportunity to receive a significant premium over the market price for our shares of Class A Common Stock. Specifically, our Board reviewed the Merger Consideration in light of the current and historical performance of our Class A Common Stock, and considered among other things:
•
the fact that the Merger Consideration is payable in cash, which allows our stockholders to realize immediate and certain value for their investment in Fitbit and enables our stockholders to avoid further risk of holding Fitbit Common Stock;
•
the fact that the $7.35 price to be paid for each share in connection with the Merger represents a 100% premium to the closing price of $3.67 per share on September 19, 2019, the last trading day prior to the publication of the September 20 Article (the “Unaffected Date”);
•
the fact that the Merger Consideration represents a 124% and 87% premium, respectively, over the volume weighted average closing price of our Class A Common Stock for the 30-day period and 90-day period ended on the Unaffected Date;
•
the fact that the Merger Consideration represents a 19% premium to the closing price of $6.18 per share on October 31, 2019, the last trading day before the Merger was approved by our Board and publicly announced;
•
our Board’s belief that we, with the assistance of our financial advisor, engaged in a robust strategic process that created an opportunity for other potentially interested parties to negotiate a transaction with us if such parties desired to do so, and our Board’s belief that the Merger Consideration represented more value than any other proposals that resulted from such process;
•
our Board’s belief that we, with the assistance of our financial advisor, had negotiated the highest price per share that Google was willing to pay for Fitbit and the highest price reasonably available to Fitbit under the circumstances; and
•
the oral opinion of Qatalyst Partners, subsequently confirmed in writing, to the effect that, as of October 31, 2019, and based upon and subject to the assumptions, qualifications, limitations and other matters set forth in such written opinion, the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the Merger Agreement by the Holders, in their capacity as such Holders, was fair, from a financial point of view, to such Holders, and the fact that Qatalyst Partners expressed no opinion regarding the consideration to be received by any holder of Class B Common Stock under the Merger Agreement in such holder’s capacity as a holder of Class B Common Stock, as more fully described below under the section captioned “—Opinion of Fitbit’s Financial Advisor,” which full text of the written opinion is attached as Annex B to this proxy statement and is incorporated by reference in this proxy statement in its entirety.
Our Prospects and Financial Condition. Our Board also considered our business and financial prospects and the risks of continuing to operate as a standalone company, including the risks and uncertainties discussed in Fitbit’s public filings with the SEC, included in our Annual Report on Form 10-K for the year ended December 31, 2018 and our Quarterly Report on Form 10-Q for the quarter ended September 28, 2019, which are incorporated herein by reference, and our Board’s belief that:
•
the wearable device market is highly competitive, and competition continues to intensify with many large, broad-based consumer electronics companies either already competing in our market or adjacent markets or announcing plans to do so;
•
our competitors and potential competitors have significant advantages, including longer operating histories, larger and broader customer bases, greater brand recognition, greater ability to integrate wearables with other devices in their product ecosystem such as mobile phones and smart home devices and more established relationships with a large number of suppliers, contract manufacturers, and channel partners;

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•
smartwatches with health and fitness functionalities may displace the market for traditional tracker devices, and certain competitors of Fitbit have greater experience manufacturing smartwatches, and greater financial, research and development, marketing, distribution, and other resources than Fitbit does; and
•
we also face competition from manufacturers of lower-cost devices and a wide range of stand-alone health and fitness-related mobile apps that can be purchased or downloaded through mobile app stores.
The Terms of the Merger Agreement. Our Board considered the terms of the Merger Agreement, including:
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our ability, under certain circumstances, to furnish information to and conduct negotiations with third parties regarding unsolicited Acquisition Proposals;
•
our ability to terminate the Merger Agreement in order to accept a Superior Proposal, subject to paying Google the Company Termination Fee;
•
the right of our Board to withdraw, qualify or modify its recommendation that our stockholders adopt the Merger if after consultation with our outside legal counsel and outside independent financial advisors it determines in good faith that the failure to effect such withdrawal, qualification or modification would be inconsistent with our Board’s fiduciary duties to our stockholders, subject to Fitbit’s obligation to pay the Company Termination Fee in the event that Google terminates following such withdrawal, qualification or modification;
•
the fact that Fitbit would be required to pay Google the No Vote Fee if, upon being put to a vote, our stockholders do not approve this proposal;
•
our Board’s belief, after discussion with its legal and financial advisors, that the amounts of the Company Termination Fee and No-Vote Fee were reasonable in light of the negotiation process that led to the execution of the Merger Agreement, as well as of the terms of the Merger Agreement itself, and were necessary to induce Google to enter into the Merger Agreement;
•
our Board’s belief that the Company Termination Fee would not likely deter or preclude another party with a strategic interest in us and financial resources sufficient to consummate an alternative Acquisition Transaction with us, were one to exist, from making a competing proposal for Fitbit and that such Company Termination Fee would likely only be required to be paid in the event that our Board entered into a transaction more financially favorable to our stockholders than the Merger;
•
the fact that Google would be required to pay Fitbit the Parent Termination Fee if either party terminates the Merger Agreement under certain other circumstances related to a failure to satisfy the Regulatory Authorization Condition or the No Injunction Condition (if the Restraint arises under antitrust laws);
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Google’s obligations under the Merger Agreement to use its reasonable best efforts to consummate the Merger (subject to the terms and conditions of the Merger Agreement);
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our entitlement to specific performance of the Merger Agreement;
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that the Merger is subject to the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Fitbit Common Stock;
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the likelihood of satisfying the conditions to complete the Merger and the likelihood that the Merger will be consummated; and
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our Board’s belief that the Merger Agreement was the product of arm’s-length negotiation and contained customary terms and conditions.
General Matters. Our Board considered a number of other factors related to the Transactions, including:
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the availability of statutory appraisal rights under the DGCL for the holders of Fitbit Common Stock who comply with the required procedures under the DGCL;

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•
the fact that resolutions approving the Merger Agreement were unanimously approved by our Board, which is comprised of a majority of independent directors who are neither affiliated with Google nor employees of Fitbit, and which retained and received advice from Fenwick & West and Qatalyst Partners in evaluating, negotiating and recommending the terms of the Merger Agreement; and
•
the business reputation of Google, including its substantial financial resources and history of successful acquisitions, and our Board’s belief that Google was highly likely to complete the acquisition.
Other Considerations. Our Board also considered a number of risks, uncertainties and potentially negative factors in its deliberations concerning the Merger and the Transactions, including:
•
the need to make antitrust filings, and obtain antitrust clearance, in the United States, the European Union and certain other foreign jurisdictions, and the fact that Google will not be required, and Fitbit will not be permitted without Google’s consent, to (a) litigate with any governmental authority or (b) effect any license, sale, divestiture or other disposition or holding separate of any of its shares, business, assets or properties or agree to any impediment on its business under any antitrust laws;
•
the fact that, without the support of Mr. Park or Mr. Friedman, the Merger cannot be approved by our stockholders;
•
the fact that the no-solicitation provisions of the Merger Agreement restrict Fitbit’s ability to solicit or, subject to certain exceptions, engage in discussions or negotiations with third parties regarding a proposal to acquire Fitbit, and the fact that, upon termination of the Merger Agreement under certain specified circumstances, Fitbit will be required to pay the Company Termination Fee, which could have the effect of discouraging alternative proposals for a business combination with Fitbit or reduce the price of such proposal;
•
the fact that our stockholders will not participate in any future earnings or growth of Fitbit and will not benefit from any appreciation in the value of Fitbit, including any appreciation in value that could be realized as a result of the combination of Fitbit with Google;
•
the possible effects of the pendency of the Merger or termination of the Merger Agreement on our business, operating results, prospects, management, employees, customers, distributors, manufacturers and suppliers, including diversion from day-to-day operations, which effects may be exacerbated if there is an extended period between the signing and termination of the Merger Agreement;
•
the restrictions on the conduct of Fitbit’s business prior to the consummation of the Merger, including the requirement that Fitbit conduct its business in the ordinary course, subject to specific limitations, which may delay or prevent Fitbit from undertaking business opportunities, including acquisitions, that may arise before the completion of the Merger and that, absent the Merger Agreement, Fitbit might have pursued; and
•
the fact that receipt of the Merger Consideration payable upon the consummation of the Merger would generally be a taxable transaction for U.S. federal income tax purposes.
The foregoing discussion of the information and factors considered by our Board is not intended to be exhaustive, but includes the material factors considered by our Board. In view of the variety of factors considered in connection with its evaluation of the Merger, our Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. Our Board did not undertake to make specific determinations as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. Our Board based its recommendation on the totality of the information presented and concluded that the risks, uncertainties, restrictions and potentially negative factors associated with the Merger were outweighed by the potential benefits of the Merger to our stockholders.
In considering the recommendation of our Board with respect to the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers have interests in the Merger that are different from, or in addition to, yours. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the terms of the Merger, and in recommending that the Merger Agreement be adopted by our stockholders. See the section captioned “—Interests of our Directors and Executive Officers in the Merger.”

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Portions of this explanation of the reasons for the Merger and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section captioned “Forward-Looking Information.”
Opinion of Fitbit’s Financial Advisor
We retained Qatalyst Partners to act as financial advisor to our Board in connection with a potential transaction such as the Merger and to evaluate whether the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the Holders, in their capacity as such Holders, was fair, from a financial point of view, to such Holders. We selected Qatalyst Partners to act as our financial advisor based on Qatalyst Partners’ qualifications, expertise, reputation and its knowledge of our business and the industry in which we operate. Qatalyst Partners has provided its written consent to the reproduction of its opinion in this proxy statement. At the meeting of our Board on October 31, 2019, Qatalyst Partners rendered to our Board its oral opinion, subsequently confirmed in writing, to the effect that, as of October 31, 2019 and based upon and subject to the various assumptions, qualifications, limitations and other matters set forth therein, the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the Holders, in their capacity as such Holders, was fair, from a financial point of view, to such Holders. Following the meeting, Qatalyst Partners delivered its written opinion, dated October 31, 2019, to our Board.
The full text of the written opinion of Qatalyst Partners, dated as of October 31, 2019, is attached to this proxy statement as Annex B and is incorporated into this proxy statement by reference. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Qatalyst Partners in rendering its opinion. You should read the opinion carefully in its entirety. Qatalyst Partners’ opinion was provided to our Board and addresses only, as of the date of the opinion, the fairness, from a financial point of view, of the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the Holders, in their capacity as such Holders, to such Holders, and it does not address any other aspect of the Merger. It does not constitute a recommendation to any Fitbit stockholder as to how to vote with respect to the Merger or any other matter and does not in any manner address the price at which the shares of our Class A Common Stock will trade at any time. The summary of Qatalyst Partners’ written opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached to this proxy statement as Annex B.
For purposes of the opinion set forth therein, Qatalyst Partners reviewed a draft, dated as of October 31, 2019, of the Merger Agreement (the “Draft Merger Agreement”), certain related documents and certain of our publicly available financial statements and other business and financial information. Qatalyst Partners also reviewed certain forward-looking information relating to Fitbit, including certain non-public unaudited financial forecasts for Fitbit as a standalone company, prepared by our management (the “Projections”), described more fully below in the section captioned “—Financial Projections.” Additionally, Qatalyst Partners discussed our past and current operations and financial condition and prospects with our senior management. Qatalyst Partners also reviewed the historical market prices and trading activity for our Class A Common Stock and compared our financial performance and the prices and trading activity of our Class A Common Stock with that of certain other selected publicly-traded companies and their securities. In addition, Qatalyst Partners performed such other analyses, reviewed such other information and considered such other factors as it deemed appropriate.
In arriving at its opinion, Qatalyst Partners assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to, or discussed with, Qatalyst Partners by us. With respect to the Projections, Qatalyst Partners was advised by our management, and Qatalyst Partners assumed, that the Projections had been reasonably prepared on a basis reflecting the best currently available estimates and judgments of our management of our future financial performance and other matters covered thereby. Qatalyst Partners assumed that the Merger will be consummated in accordance with the terms set forth in the Draft Merger Agreement, without any modification, waiver or delay. Qatalyst Partners also assumed that the final executed Merger Agreement would not differ in any material respect from the Draft Merger Agreement reviewed by Qatalyst Partners. In addition, Qatalyst Partners assumed that in connection with the receipt of all the necessary approvals of the proposed Merger, no delays, limitations, conditions or restrictions will be imposed that could have an adverse effect on us or the contemplated benefits expected to be derived in the proposed Merger. Qatalyst Partners did not make any independent evaluation or appraisal of our or our affiliates’ assets or liabilities (contingent or otherwise), nor was Qatalyst Partners furnished with any such evaluation or appraisal. In addition, Qatalyst Partners relied, without independent verification, upon the assessment of our management as to our existing and future technology and products and the risks associated with such technology and products. Qatalyst Partners’ opinion has been approved by Qatalyst Partners’ opinion committee in accordance with its customary practice. Qatalyst Partners’ opinion does not constitute

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a recommendation as to how to vote with respect to the Merger or any other matter and does not in any manner address the price at which the shares of our Class A Common Stock will trade at any time.
Qatalyst Partners’ opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it as of, the date of the opinion. Events occurring after the date of the opinion may affect Qatalyst Partners’ opinion and the assumptions used in preparing it, and Qatalyst Partners did not assume any obligation to update, revise or reaffirm its opinion. Qatalyst Partners’ opinion did not address our underlying business decision to engage in the Merger, or the relative merits of the Merger as compared to any strategic alternatives that may be available to us. Qatalyst Partners’ opinion is limited to the fairness, from a financial point of view, of the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the Holders, in their capacity as such Holders, and Qatalyst Partners expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of our officers, directors or employees or any of our affiliates, or any class of such persons, relative to such consideration at any time. Qatalyst Partners also expressed no opinion regarding the consideration to be received by any holder of our Class B Common Stock under the Merger Agreement in such holder’s capacity as a holder of our Class B Common Stock.
The following is a summary of the material analyses performed by Qatalyst Partners in connection with its opinion dated October 31, 2019. The analyses and factors described below must be considered as a whole; considering any portion of such analyses or factors, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Qatalyst Partners’ opinion. For purposes of its analyses, Qatalyst Partners utilized both the consensus of third-party research analysts’ projections (“Analyst Projections”) and the Projections. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by Qatalyst Partners, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Qatalyst Partners’ financial analyses.
Illustrative Discounted Cash Flow Analysis
Qatalyst Partners performed an illustrative discounted cash flow analysis, which is designed to imply a range of potential, present values of a share of Fitbit Common Stock by:
•
adding:
(a)
the implied net present value of our estimated future unlevered free cash flows, based on the Projections, for the fourth quarter of calendar year 2019 through calendar year 2023 (which implied present value was calculated by using a range of discount rates of 12.5% to 16.5%, based on our estimated weighted average cost of capital);
(b)
the implied net present value of our terminal value, calculated by multiplying our estimated revenue in calendar year 2024 based on the Projections by a range of multiples of enterprise value to next-twelve-months estimated revenue of 0.3x to 0.8x, and discounted to present value using the same range of discount rates used in item (a) above;
(c)
the implied net present value of our forecasted tax attributes outstanding as of December 31, 2023 based on the Projections (which implied present value was calculated by using the same range of discount rates used in item (a) above and the statutory tax rate applicable to us, as provided by our management); and
(d)
our cash as of September 28, 2019, as provided by our management; and
•
dividing the resulting amount by the number of fully-diluted shares of Fitbit Common Stock (calculated utilizing the treasury stock method), adjusted, as applicable, for Fitbit RSUs, Fitbit PSUs, Fitbit Options and the Warrant, each outstanding as of October 28, 2019, all of which amounts were provided by our management, with each of the above-referenced estimated future unlevered free cash flows, terminal value and forecasted tax attributes having also been adjusted for the degree of estimated dilution to current stockholders through each respective applicable period due to the estimated net effects of equity issuances and cancellations related to future equity compensation, based on estimates of future dilution provided by our management.
Based on the calculations set forth above, this analysis implied a range of per share values for Fitbit Common Stock of approximately $2.58 to $4.30.

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Selected Companies Analysis
Qatalyst Partners compared selected financial information and public market multiples for us with publicly available information and public market multiples for selected companies. The companies, which Qatalyst Partners considered generally relevant to a financial comparison with us, used in this comparison are listed below.
Selected Companies
CY2020E Revenue Multiples

Selected Consumer Electronics / Wearable Companies
Arlo Technologies, Inc.
0.3x
Fossil Group, Inc.
0.3
Garmin Ltd.
4.2
GoPro, Inc.
0.6
iRobot Corporation
1.0
Logitech International S.A.
2.1
Plantronics, Inc.
1.5
Sonos, Inc.
0.9

Selected Large-Cap Diversified Consumer Electronics
Apple Inc.
3.6x
Nokia Corporation
0.7
Samsung Electronics Co., Ltd.
1.0
Sony Corporation (1)
1.1
(1) Sony Corporation consensus estimates and balance sheet metrics adjusted to exclude impact of financial services segment based on public filings and selected analyst research reports.
Based upon the Analyst Projections as of October 31, 2019 for calendar year 2020, and using the closing prices as of October 31, 2019 for shares of the selected companies, Qatalyst Partners calculated, among other things, the implied fully-diluted enterprise value divided by the estimated consensus revenue for calendar year 2020 (the “CY2020E Revenue Multiples”) for each of the selected companies.
The CY2020E Revenue Multiple for us was 0.4x based on the Analyst Projections, and our fully-diluted enterprise value was calculated using the closing price of our Class A Common Stock as of the Unaffected Date.
Based on an analysis of the CY2020E Revenue Multiples for each of the selected companies, Qatalyst Partners selected a representative range of 0.3x to 0.8x and applied this range to our estimated calendar year 2020 revenue based on each of the Analyst Projections and the Projections. In addition, for the purpose of this analysis, Qatalyst Partners calculated our enterprise value assuming our cash as of September 28, 2019, as provided by our management. Based on the calculations set forth above and the number of fully-diluted shares of Fitbit Common Stock (calculated utilizing the treasury stock method), adjusted, as applicable, for Fitbit RSUs, Fitbit PSUs, Fitbit Options and the Warrant, each outstanding as of October 28, 2019, all of which amounts were provided by our management, this analysis implied a range of per share values for Fitbit Common Stock of approximately $3.36 to $5.91 based on the Analyst Projections and approximately $3.36 to $5.93 based on the Projections.
No company included in the selected companies analysis is identical to us. In evaluating the selected companies, Qatalyst Partners made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters. Many of these matters are beyond our control, such as the impact of competition on our business and the industry in general, industry growth and the absence of any material adverse change in our financial condition and prospects or the industry or in the financial markets in general. Individual multiples or mathematical analysis, such as determining the arithmetic mean, median, or the high or low, is not in itself a meaningful method of using selected company data.
Miscellaneous
In connection with the review of the Merger by our Board, Qatalyst Partners performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily amenable to a partial analysis or summary description. In arriving at its opinion, Qatalyst Partners considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Qatalyst Partners

41


believes that selecting any portion of its analyses, without considering all analyses as a whole, could create a misleading or incomplete view of the process underlying its analyses and opinion. In addition, Qatalyst Partners may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Qatalyst Partners’ view of our actual value. In performing its analyses, Qatalyst Partners made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond our control. Any estimates contained in Qatalyst Partners’ analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.
Qatalyst Partners conducted the analyses described above solely as part of its analysis of the fairness, from a financial point of view, of the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the Holders, in their capacity as such Holders, to such Holders. Qatalyst Partners expressed no opinion regarding the consideration to be received by any holder of our Class B Common Stock under the Merger Agreement in such holder’s capacity as a holder of our Class B Common Stock. This analysis does not purport to be an appraisal or to reflect the price at which our Class A Common Stock might actually trade at any time.
Qatalyst Partners’ opinion and its presentation to our Board was one of many factors considered by our Board in deciding to approve the Merger Agreement. Consequently, the analyses described above should not be viewed as determinative of the opinion of our Board with respect to the merger consideration of $7.35 in cash per share of our Class A Common Stock to be received pursuant to, and in accordance with, the terms of the Merger Agreement by the Holders, in their capacity as such Holders, or of whether our Board would have been willing to agree to different consideration. The merger consideration of $7.35 in cash per share of our Class A Common Stock payable in the Merger was determined through arm’s-length negotiations between us and Google and was unanimously approved by our Board. Qatalyst Partners provided advice to us during these negotiations. Qatalyst Partners did not, however, recommend any specific consideration to us or that any specific consideration constituted the only appropriate consideration for the Merger.
Qatalyst Partners provides investment banking and other services to a wide range of entities and individuals, domestically and offshore, from which conflicting interests or duties may arise. In the ordinary course of these activities, affiliates of Qatalyst Partners may at any time hold long or short positions, and may trade or otherwise effect transactions in debt or equity securities or loans of us, Google or certain of our or their respective affiliates. During the two-year period prior to the date of Qatalyst Partners’ opinion, no material relationship existed between Qatalyst Partners or any of its affiliates and us or Google pursuant to which compensation was received by Qatalyst Partners or its affiliates. Qatalyst Partners and/or its affiliates may in the future provide investment banking and other financial services to us or Google and our and their respective affiliates for which Qatalyst Partners would expect to receive compensation.
Qatalyst Partners provided us with financial advisory services in connection with the proposed Merger for which it will be paid approximately $36 million, $150,000 of which was paid upon the execution of such letter agreement and $3 million of which was payable upon the delivery of its opinion (regardless of the conclusion reached in the opinion), and the remaining portion of which will be paid upon, and subject to, the consummation of the Merger. We have also agreed to reimburse Qatalyst Partners for its expenses incurred in performing its services and to indemnify Qatalyst Partners and its affiliates, their respective members, directors, officers, partners, agents and employees and any person controlling Qatalyst Partners or any of its affiliates against certain liabilities, including liabilities under federal securities law, and certain expenses related to or arising out of Qatalyst Partners’ engagement.
Financial Projections
Fitbit does not as a matter of course publicly disclose long term projections as to future performance, revenues, operating income or other financial results. However, in connection with its evaluation of the Transactions, Fitbit’s management prepared the Projections. The Projections are included in this proxy statement only because (1) the Projections were made available to Google, along with the actual financial results of Fitbit for the first, second and third quarters of calendar year 2019, in connection with Google’s due diligence review of Fitbit; (2) the Projections were made available to Qatalyst Partners for use in its financial analyses in connection with rendering its opinion to our Board as described in the section captioned “—Opinion of Fitbit’s Financial Advisor” and (3) the Projections were made available to our Board in connection with its consideration of the Merger and approved by our Board for use by Qatalyst Partners in its financial analyses in connection with rendering its opinion to our Board. The Projections are not included in this proxy statement to influence any stockholder to make any investment decision with respect to the Merger, including whether or not to seek appraisal rights with respect to the shares of Fitbit Common Stock.

42


The Projections are forward-looking statements. Important factors that may affect actual results and cause the Projections not to be achieved include, but are not limited to, the risks and uncertainties described below and those described in the section captioned “Forward-Looking Information.” Although the Projections are presented with numerical specificity, they reflect numerous estimates and assumptions made by Fitbit with respect to industry performance, general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to Fitbit’s business, all of which are difficult or impossible to predict accurately and many of which are beyond Fitbit’s control. The Projections reflect assumptions as to certain potential business decisions that are subject to change. Without limiting the generality of the foregoing, the Projections include assumptions relating to revenue growth, facility plans, levels of expenditures and capital structure. The Projections cover several years and such information by its nature becomes less reliable with each successive year. The Projections were prepared on a standalone basis without giving effect to the Merger. Furthermore, the Projections do not take into account the effect of any failure of the Merger to be completed and should not be viewed as accurate or continuing in that context.
In the view of Fitbit’s management, the Projections were reasonably prepared to reflect the best currently available estimates and judgments of Fitbit’s management of the future financial performance of Fitbit and other matters covered thereby. The inclusion of the Projections should not be regarded as an indication that Fitbit, Qatalyst Partners, any of their respective affiliates, officers, directors, advisors or other representatives or anyone who received this information then considered, or now considers, them a reliable prediction of future events, and this information should not be relied upon as such. The inclusion of the Projections herein should not be deemed an admission or representation by Fitbit that it views such Projections as material information. The inclusion of the Projections in this proxy statement should not be regarded as an indication that the Projections will necessarily be predictive of actual future events given the inherent risks and uncertainties associated with such long-range forecasts. No representation is made by Fitbit or any other person regarding the Projections or Fitbit’s ultimate performance compared to such information. The Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information about Fitbit contained in its public filings with the SEC. For additional information, see the section captioned “Where You Can Find More Information.” In light of the foregoing factors, and the uncertainties inherent in the Projections, stockholders are cautioned not to place undue, if any, reliance on the Projections.
The Projections included in this document have been prepared by, and are solely the responsibility of, Fitbit’s management. Neither our independent auditor nor any other independent accountant has compiled, examined or performed any procedures with respect to the Projections, nor have they expressed any opinion or any other form of assurance on such information or its achievability.
Some of the Projections are “non-GAAP financial measures,” which are financial performance measures that are not calculated in accordance with the published guidelines of the SEC regarding projections or accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures should not be viewed as a substitute for GAAP financial measures, and may be different from non-GAAP financial measures used by other companies. Furthermore, there are limitations inherent in non-GAAP financial measures, because they exclude charges and credits that are required to be included in a GAAP presentation. Accordingly, these non-GAAP financial measures should be considered together with, and not as an alternative to, financial measures prepared in accordance with GAAP.

43


The following table presents the Projections (in millions, except per share figures):
 
4Q2019E(1)
 
CY2020E
 
CY2021E
 
CY2022E
 
CY2023E
 
Terminal CY2024E(2)
Revenue
$
519

 
$
1,487

 
$
1,534

 
$
1,588

 
$
1,646

 
$
1,713

Non-GAAP Cost of Revenue(3)
(351
)
 
(946
)
 
(936
)
 
(949
)
 
(969
)
 
(993
)
Non-GAAP Gross Profit(4)
168

 
541

 
597

 
639

 
677

 
720

Non-GAAP Operating Expense(5)
(176
)
 
(600
)
 
(600
)
 
(624
)
 
(649
)
 
(675
)
Non-GAAP Operating Income (Loss)(6)
(8
)
 
(59
)
 
(3
)
 
15

 
28

 
46

Less: Non-GAAP Tax Adjustment
(0)

 
(2
)
 
(2
)
 
(2
)
 
(2
)
 
(11
)
NOPAT(7)
(9
)
 
(60
)
 
(4
)
 
13

 
26

 
34

Less: Capital Expenditures
(15
)
 
(40
)
 
(40
)
 
(40
)
 
(41
)
 
(45
)
Plus: Depreciation
13

 
45

 
45

 
45

 
45

 
45

Less: Investment in Working Capital
78

 
(34
)
 
(25
)
 
(17
)
 
(17
)
 
(8
)
Unlevered Free Cash Flow(8)
67

 
(89
)
 
(25
)
 
0

 
13

 
26

Adjusted EBITDA(9)
5

 
(14
)
 
42

 
60

 
73

 
91

Non-GAAP Net Income (Loss)(10)
(5
)
 
(37
)
 
5

 
17

 
27

 
39

Non-GAAP Earnings Per Share(11)
(0.02
)
 
(0.14
)
 
0.02

 
0.06

 
0.09

 
0.12

_______________
(1)
The financial projections for CY2019E were made available to Google, together with the actual financial results of Fitbit for the first, second and third quarters of calendar year 2019.
(2)
As shown in this column, for the purpose of calculating the terminal value in year 2024, the amounts for taxes paid, net operating profit after tax (“NOPAT”) and unlevered free cash flow assume a long-term effective tax rate of 25%. The financial projections provided to Google assumed approximately $2 million in cash taxes paid in 2024, which yielded a NOPAT of $44 million and unlevered free cash flow of $36 million in 2024.
(3)
Non-GAAP cost of revenue is calculated by starting with cost of revenue and subtracting stock-based compensation expense, the impact of restructuring and intangible assets amortization.
(4)
Non-GAAP gross profit is calculated by starting with gross profit and subtracting stock-based compensation expense, the impact of restructuring and intangible assets amortization.
(5)
Non-GAAP operating expense is calculated by starting with operating expense and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring and intangible assets amortization.
(6)
Non-GAAP operating income (loss) is calculated by starting with operating income (loss) and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring and intangible assets amortization.
(7)
NOPAT is a non-GAAP financial measure calculated by starting with Non-GAAP operating income (loss) and making an associated non-GAAP tax adjustment.
(8)
Unlevered free cash flow is a non-GAAP financial measure calculated by starting with NOPAT and subtracting capital expenditures, adding back depreciation and subtracting investment in working capital.
(9)
Adjusted EBITDA is a non-GAAP financial measure calculated by starting with net loss and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring, impairment of equity investment, depreciation, intangible assets amortization, interest income, net and income tax expense (benefit).
(10)
Non-GAAP net income (loss) is calculated by starting with net loss and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring, impairment of equity investment, intangible assets amortization and the income tax effect of non-GAAP adjustments.
(11)
Non-GAAP earnings per share excludes stock-based compensation expense, certain litigation expense, the impact of restructuring, impairment of equity investment, intangible assets amortization and the income tax effect of non-GAAP adjustments.

44


Fitbit also prepared the Advocacy Case in August 2019 and subsequently provided it to Google, Party A, Party B, Party C and Party D in connection with our initial management meetings with such parties. The Advocacy Case covered only through calendar year 2021, did not project free cash flow, and was not approved by our Board nor utilized by Qatalyst Partners in preparing its opinion to our Board. The Advocacy Case was prepared by our management primarily for purposes of advocating for higher offer prices during the course of negotiations with third parties and relied on assumptions and risk adjustments that were “best case” and thus more optimistic than those used in the Projections (with the Projections having reflected our management’s best currently available estimates and judgments of Fitbit’s future performance as a standalone company, on a risk adjusted basis). Accordingly, the Advocacy Case was not (a) utilized by Qatalyst Partners in preparing its opinion to our Board or (b) utilized or relied upon by our Board in its consideration of the Merger Agreement, the Merger or the other Transactions. The inclusion of the Advocacy Case is for information purposes only and should not be regarded as an indication that Fitbit, our management or our advisors, including Qatalyst Partners, believes such information to be indicative of actual future performance. Our management expected that a third party interested in acquiring Fitbit would develop its own financial projections and would form its own view about the assumptions in the Advocacy Case. The following table presents the Advocacy Case (in millions, except per share figures):
 
2018A
 
2019F
 
2020P
 
2021P
 
2018A - 2021P CAGR
Revenue
$
1,512

 
$
1,480

 
$
1,607

 
$
1,821

 
6
 %
Non-GAAP Cost of Revenue(1)
894

 
962

 
988

 
1,061

 
6
 %
Non-GAAP Gross Profit(2)
618

 
518

 
619

 
760

 
7
 %
Non-GAAP Operating Expense(3)
702

 
638

 
600

 
651

 
(2
)%
Non-GAAP Operating Income (Loss)(4)
(84
)
 
(120
)
 
19

 
109

 
 
Adjusted EBITDA(5)
(31
)
 
(62
)
 
69

 
159

 
 
Non-GAAP Net Income (Loss)(6)
(49
)
 
(82
)
 
22

 
90

 
 
Non-GAAP Earnings Per Share(7)
(0.20
)
 
(0.32
)
 
0.08

 
0.31

 
 
_______________
(1)
Non-GAAP cost of revenue is calculated by starting with cost of revenue and subtracting stock-based compensation expense, the impact of restructuring and intangible assets amortization.
(2)
Non-GAAP gross profit is calculated by starting with gross profit and subtracting stock-based compensation expense, the impact of restructuring and intangible assets amortization.
(3)
Non-GAAP operating expense is calculated by starting with operating expense and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring and intangible assets amortization.
(4)
Non-GAAP operating income (loss) is calculated by starting with operating income (loss) and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring and intangible assets amortization.
(5)
Adjusted EBITDA is a non-GAAP financial measure calculated by starting with net loss and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring, impairment of equity investment, depreciation, intangible assets amortization, interest income, net and income tax expense (benefit).
(6)
Non-GAAP net income (loss) is calculated by starting with net loss and subtracting stock-based compensation expense, certain litigation expenses, the impact of restructuring, impairment of equity investment, intangible assets amortization and the income tax effect of non-GAAP adjustments.
(7)
Non-GAAP earnings per share excludes stock-based compensation expense, certain litigation expenses, the impact of restructuring, impairment of equity investment, intangible assets amortization and the income tax effect of non-GAAP adjustments.
The Projections and the Advocacy Case set forth above have not been updated or revised to reflect information or results after the date they were prepared or as of the date of this proxy statement.
WE DO NOT INTEND TO UPDATE OR OTHERWISE REVISE THE PROJECTIONS, THE ADVOCACY CASE OR THE SPECIFIC PORTIONS PRESENTED TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE UNDERLYING ASSUMPTIONS ARE SHOWN TO BE IN ERROR.
Interests of our Directors and Executive Officers in the Merger
When considering the recommendation of our Board that you vote to approve the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers have interests in the Merger in addition to their interests as Fitbit stockholders generally. These interests are described below and may be different from, or in conflict with, your interests as a Fitbit stockholder. Our Board members were aware of the material facts as to these additional interests, and considered them, among other matters, when they approved the Merger Agreement.

45


Treatment of Fitbit Equity Awards
Treatment of Fitbit Options
As of November 15, 2019, there were outstanding Fitbit Options to purchase 900,000 shares of Class A Common Stock and 13,003,925 shares of Class B Common Stock with an exercise price less than $7.35 per share, of which Fitbit Options covering 900,000 shares of Class A Common Stock and 10,646,467 shares of Class B Common Stock were held by our executive officers. As of November 15, 2019, our non-employee directors did not hold any Fitbit Options.
At the Effective Time:
•
each Fitbit Option (whether vested or unvested) outstanding as of immediately prior to the Effective Time with a per share exercise price that equals or exceeds the Merger Consideration will be immediately canceled for no consideration;
•
each Fitbit Option (whether vested or unvested) outstanding as of immediately prior to the Effective Time held by a non-employee director of our Board will be canceled and converted into the right to receive an amount in cash, without interest, equal to the Option Consideration;
•
each vested Fitbit Option outstanding as of immediately prior to the Effective Time will be canceled and converted into the right to receive an amount in cash, without interest, equal to the Option Consideration; and
•
each unvested Fitbit Option outstanding as of immediately prior to the Effective Time (other than those held by non-employee directors of our Board) will be canceled and converted into the right to receive the Option Consideration, and the payment of such Option Consideration will be subject to (x) vesting in accordance with the vesting schedule applicable to such unvested Fitbit Option immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date, and (y) to the terms and conditions of the Unvested Payment Plan.
If the holder of an unvested Fitbit Option (other than those held by non-employee directors of our Board) does not execute and deliver an Unvested Payment Plan Agreement within the timeframe set forth in the Unvested Payment Plan Agreement, the holder will forfeit any and all rights with respect to the unvested Fitbit Option, including any right to payments with respect to the unvested Fitbit Option.
Treatment of Fitbit RSUs
As of November 15, 2019, there were 18,616,952 outstanding Fitbit RSUs (excluding Fitbit PSUs), all of which provide for settlement in the form of shares of Class A Common Stock, and of which 1,145,615 Fitbit RSUs were held by our directors and executive officers.
At the Effective Time:
•
each Fitbit RSU (whether vested or unvested) held by a non-employee director of our Board outstanding as of immediately prior to the Effective Time will be canceled and converted into a right to receive an amount in cash, without interest, equal to the RSU Consideration;
•
each vested Fitbit RSU outstanding as of immediately prior to the Effective Time will be canceled and converted into the right to receive an amount in cash, without interest, equal to the RSU Consideration; and
•
each unvested Fitbit RSU outstanding as of immediately prior to the Effective Time (other than those held by non-employee directors of our Board) will be canceled and converted into the right to receive the RSU Consideration, and the payment of such RSU Consideration will be subject to (x) vesting in accordance with the vesting schedule applicable to such unvested Fitbit RSU immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date, and (y) the terms and conditions of the Unvested Payment Plan.
If the holder of an unvested Fitbit RSU (other than those held by non-employee directors of our Board) does not execute and deliver an Unvested Payment Plan Agreement within the timeframe set forth in the Unvested Payment Plan Agreement, the

46


holder will forfeit any and all rights with respect to the unvested Fitbit RSU, including any right to payments with respect to the unvested Fitbit RSU.
Treatment of Fitbit PSUs
As of November 15, 2019, there were 1,365,418 outstanding Fitbit PSUs (assuming a maximum level of achievement for PSUs for which the applicable performance measurement period has not been completed), all of which provide for settlement in the form of shares of Class A Common Stock, and all of which are held by our named executive officers.
At the Effective Time:
•
each Vested Fitbit PSU will be canceled and converted into the right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to the Vested Fitbit PSU based on the deemed achievement of all relevant performance goals at target level; and
•
each Unvested Fitbit PSU will be canceled and exchanged for the right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to the Unvested Fitbit PSU based on the deemed achievement of all relevant performance goals at target level, with such payment subject to (x) vesting in accordance with the service-based vesting schedule applicable to such Unvested Fitbit PSU immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date and (y) the terms and conditions of the Unvested Payment Plan.
Any consideration payable in respect of the Unvested Fitbit PSUs will not be subject to any performance-based vesting requirements and will be subject solely to the service-based vesting requirements applicable to the applicable Unvested Fitbit PSU as of immediately prior to the Effective Time. If the holder of an Unvested Fitbit PSU does not execute and deliver an Unvested Payment Plan Agreement within the timeframe set forth in the Unvested Payment Plan Agreement, the holder will forfeit any and all rights with respect to the Unvested Fitbit PSUs, including any right to payments with respect to the Unvested Fitbit PSUs.
Payments with Respect to Equity Awards
The amounts described above with respect to each Vested Award and each Non-Employee Director Award will be paid as soon as practicable following the Closing, and in no event later than (i) the second regular payroll cycle following the Closing Date for all Vested Awards and (ii) two business days following the Closing for all Non-Employee Director Awards. Any amounts subject to the Unvested Payment Plan will be paid at the time and in accordance with the terms set forth in the Unvested Payment Plan.
As of November 15, 2019, the assumed effective date of the Merger, the estimated aggregate value of vested Fitbit Options held by our named executive officers is approximately $62,588,666. For an estimate of the amounts that may be paid or become payable to each of our named executive officers with respect to unvested equity awards in connection with the Merger, see the section captioned “—Quantification of Potential Payments and Benefits to our Named Executive Officers.” We have no executive officers other than our named executive officers. The foregoing amounts have been determined using the expected per share Merger Consideration of $7.35.
As described above under the section captioned “—Treatment of Fitbit Equity Awards,” at the Effective Time, all outstanding and unvested Fitbit Options and Fitbit RSUs held by the non-employee directors of the Board will accelerate and become fully vested. Assuming that the Effective Time is November 15, 2019, the estimated aggregate amount that would become payable to the non-employee directors of the Board in respect of their outstanding Fitbit Options and Fitbit RSUs is approximately $1,368,732.
Treatment of the Employee Stock Purchase Plan
Our ESPP will terminate as of immediately prior to the Closing Date. No new offering period under the ESPP will commence on or after November 1, 2019. Participants in the ESPP will not be able to alter their payroll deductions from those in effect on November 1, 2019 (other than to reduce or discontinue their participation in the ESPP in accordance with the terms and conditions of the ESPP) or make separate non-payroll contributions to the ESPP on or following November 1, 2019, except as may be required by applicable law. The amount of the accumulated contributions of each participant under the ESPP as of immediately

47


prior to the Effective Time will, to the extent not used to purchase shares of Fitbit Common Stock in accordance with the terms and conditions of the ESPP, be refunded in cash to such participant as promptly as practicable following the Effective Time (without interest).
Agreements or Arrangements with our Executive Officers and Directors
Offer Letters and Employment Agreements
Currently, we only have offer letter agreements with the following named executive officers: Mr. Kisling, Mr. Missan and Mr. Devine. All of our named executive officers are employed on an at-will basis, with no fixed term of employment.
James Park
As a founder, Mr. Park, our President and Chief Executive Officer, did not enter into an offer letter or any other formal arrangement or understanding with us regarding his employment. We currently have no employment agreement with Mr. Park. Mr. Park is an at-will employee. Mr. Park’s annual base salary as of November 15, 2019 is $800,000 and his target bonus for 2019 is $1,200,000.
Eric Friedman
As a founder, Mr. Friedman, our Chief Technology Officer, did not enter into an offer letter or any other formal arrangement or understanding with us regarding his employment. We currently have no employment agreement with Mr. Friedman. Mr. Friedman is an at-will employee. Mr. Friedman’s annual base salary as of November 15, 2019 is $455,000 and his target bonus for 2019 is $341,250.
Ronald Kisling
Mr. Kisling, our Chief Financial Officer, is party to an offer letter with us dated July 28, 2014. Mr. Kisling’s annual base salary as of November 15, 2019 is $420,000 and his target bonus for 2019 is $315,000.
Andy Missan
Mr. Missan, our Executive Vice President and General Counsel, is party to an offer letter with us dated March 15, 2013. Mr. Missan’s annual base salary as of November 15, 2019 is $443,000 and his target bonus for 2019 is $332,250.
Jeff Devine
Mr. Devine, our Executive Vice President of Operations, is party to an offer letter with us dated January 26, 2017. Mr. Devine’s annual base salary as of November 15, 2019 is $400,000 and his target bonus for 2019 is $300,000.
Executive Retention Agreements
We have entered into retention agreements with each of our executive officers, including our named executive officers, which provide for the following payments and benefits upon a qualifying termination of employment, which means a termination of employment by us without cause or a termination of employment by the executive officer for good reason (as such terms are defined in the retention agreement), outside of a change in control (as such term is defined in the retention agreement) of Fitbit in exchange for a customary release of claims:
•
a lump sum severance payment of 12 months of base salary to our President and Chief Executive Officer and nine months to our other executive officers, including our other named executive officers; and
•
payment of premiums for continued medical benefits (or equivalent cash payment if applicable law so requires) for up to 12 months to our President and Chief Executive Officer and up to nine months to our other executive officers, including our other named executive officers.
If the executive officer is subject to a qualifying termination within the three months preceding a change in control (but after a legally binding and definitive agreement for a potential change of control has been executed) or within the 12 months following

48


a change in control (the “change in control period”), the retention agreements provide the following benefits in exchange for a customary release of claims:
•
a lump sum severance payment of 18 months of base salary to our President and Chief Executive Officer and 12 months to our other executive officers, including our other named executive officers;
•
a lump sum payment equal to the executive officer’s then-current target bonus opportunity, multiplied by a factor of 150% for our President and Chief Executive Officer and 100% for our other executive officers, including our other named executive officers;
•
100% acceleration of any then-unvested equity awards for our executive officers, including our named executive officers; and
•
payment of premiums for continued medical benefits (or equivalent cash payment if applicable law so requires) for up to 18 months to our President and Chief Executive Officer and up to 12 months to our other executive officers, including our other named executive officers.
Each retention agreement is in effect for three years, with automatic three-year renewals unless notice is given by us to the executive officer three months prior to expiration.
The payment and benefits under the retention agreements supersede all other cash severance and vesting acceleration arrangements.
Special Retention Compensation
Retention Payments
Each of Messrs. Kisling, Missan and Devine are eligible to receive cash retention payments equal to 30% of their base salary between November 1, 2019 and the Effective Time. Generally 50% of the cash retention payments will be payable at the Effective Time subject to continued employment with us through the Effective Time and the remaining 50% of the cash retention payments will be payable six months following the Effective Time, subject to continued employment with Google through such payment date; provided, however, that in the event the named executive officer receives a fixed-term offer of employment from Google, the remaining 50% of the cash retention payment will vest and become payable, subject to the execution of a release of claims, and such release becoming effective, on the earlier of (i) the end of their fixed-term period or (ii) six months following the Effective Time. In the event the named executive officer (1) does not receive an offer of employment from Google or (2) rejects an offer of employment from Google that does not comply with the requirements set forth in Sections 6.12(a)(i) and 6.12(a)(ii) of the Merger Agreement, then in each case, subject to the execution of a release of claims, and such release becoming effective, the cash retention payments will accelerate and be paid in full at the Effective Time. For an estimate of the amounts that may be paid or become payable to such named executive officer with respect to the cash retention payments, see the section captioned “—Quantification of Potential Payments and Benefits to our Named Executive Officers.”
Special Equity Awards
Each of Messrs. Kisling and Missan were granted 15,000 Fitbit RSUs on November 11, 2019 (the “Special Equity Awards”). These Special Equity Awards will vest in eight equal quarterly installments following November 1, 2019, subject to continued employment by us or our successor through each such vesting date, provided, however, that in the event the named executive officer (1) does not receive an offer of employment from Google or (2) rejects an offer of employment from Google that does not comply with the requirements set forth in Sections 6.12(a)(i) and 6.12(a)(ii) of the Merger Agreement, then in each case, subject to the execution of a release of claims, and such release becoming effective, all remaining unvested Special Equity Awards will fully vest and become payable as of the Effective Time. In the event the named executive officer receives a fixed-term offer of employment from Google, any unvested Special Equity Awards held by the named executive officer will be governed by the Unvested Payment Plan, which provides that if a fixed-term employee’s services terminate on the last day of the fixed term, any unvested payments under the Unvested Payment Plan will fully vest and become payable, subject to the execution of a release of claims, and such release becoming effective. The Special Equity Awards will not constitute “Equity Awards” under the terms of the named executive officer’s retention agreement with us described above, and as a result will not be subject to acceleration under the terms of such agreement, including in the event of a qualifying termination within a change in control

49


period. The estimated full value of the Special Equity Awards granted to each of Messrs. Kisling and Missan, determined using the expected per share Merger Consideration of $7.35, is $110,250.
New Arrangements between our Executive Officers and Google
James Park
On November 1, 2019, James Park and Google entered into an offer letter (the “Park Offer Letter”). The Park Offer Letter provides that upon and subject to the Closing, Mr. Park will be employed as Vice President, GM & Co-Founder of Fitbit with an annual salary of $475,000. Mr. Park will be eligible to participate in Google’s VP Bonus Plan, with an annual target bonus equal to 100% of Mr. Park’s annual base salary, with the actual bonus amount paid subject to increase or reduction based on the performance of Mr. Park and Google. Any payment of such bonus for Mr. Park’s first calendar year of employment with Google will be prorated based on the amount of time he is employed by Google during such year.
In recognition of his future services to Google, the Park Offer Letter provides that Mr. Park will be eligible to receive a retention bonus of $16,000,000, less applicable deductions and tax withholding, subject to (1) his active and continued employment, (2) remaining in good standing with Google defined as performing at a level determined by Google to consistently meets expectations or better, and (3) not materially breaching his At-Will Employment, Confidential Information, and Invention Assignment Agreement with Google, through each applicable vesting date. One sixteenth of the retention bonus will vest on each quarterly anniversary of the Closing Date for the 16 quarters following the Closing Date (subject to proration in the event Mr. Park works a reduced schedule and proration or tolling as applicable, in the event of certain leaves of absence from Google, as further described in the Park Offer Letter), with payment to be made within 30 calendar days of the applicable vesting date. Mr. Park will forfeit any remaining unvested portion of the retention bonus upon his termination of employment with Google.
Pursuant to the Park Offer Letter, Mr. Park has waived any acceleration of equity benefits, change in control benefits and severance benefits to which he may have been entitled arising under any agreement or understanding between him and us or any Fitbit policy, including his retention agreement with us.
Subject to approval by Alphabet’s board of directors, and based on Mr. Park’s employment start date of no later than January 1, 2021, Mr. Park will be eligible to receive a number of restricted stock units to acquire shares of Alphabet Class C capital stock equal to the quotient of $5,500,000 (the “Park Target Grant Value”) divided by the closing price of Alphabet’s Class C capital stock on the Tuesday immediately prior to the date of grant, anticipated to occur no later than 45 days following Mr. Park’s start date (the “Park GSUs”). The Park GSUs are expected to vest in equal monthly installments, on the 25th day of each of the 12 months following the month of grant. The Park Target Grant Value will be increased by $5,500,000/12, and the vesting period will be extended by one month, for each 30-day period prior to January 1, 2021 that Mr. Park’s employment start date occurs, and will be decreased by $5,500,000/12 and the vesting period will be decreased by one month, for each 30-day period after January 1, 2021 that Mr. Park’s employment start date occurs. In the event Mr. Park’s employment start date occurs more than 30 days prior to, or following, January 1, 2021, then the Park GSUs will be granted on the first non-holiday Wednesday of the month immediately following Mr. Park’s employment start date.
In addition, subject to approval by Alphabet’s board of directors, Mr. Park will be eligible to receive an additional number of restricted stock units to acquire shares of Alphabet Class C capital stock valued at the currently intended amount of $5,500,000 (the “Intended Park GSUs”), with the actual value of such award subject to increase or reduction based on Mr. Park’s then current performance and role at Google. It is intended that the Intended Park GSUs will be granted in January 2021, and will vest in equal installments on the 25th day of each month beginning January 2022 to December 2022.
Eric Friedman
On November 1, 2019, Eric Friedman and Google entered into an offer letter (the “Friedman Offer Letter”). The Friedman Offer Letter provides that upon and subject to the Closing, Mr. Friedman will be employed as Vice President, Engineering with an annual salary of $450,000. Mr. Friedman will be eligible to participate in Google’s VP Bonus Plan, with an annual target bonus equal to 80% of Mr. Friedman’s annual base salary, with the actual bonus amount paid subject to increase or reduction based on the performance of Mr. Friedman and Google. Any payment of such bonus for Mr. Friedman’s first calendar year of employment with Google will be prorated based on the amount of time he is employed by Google during such year.
In recognition of his future services to Google, the Friedman Offer Letter provides that Mr. Friedman will be eligible to receive a retention bonus of $7,000,000, less applicable deductions and tax withholding, subject to (1) his active and continued

50


employment, (2) remaining in good standing with Google defined as performing at a level determined by Google to consistently meets expectations or better, and (3) not materially breaching his At-Will Employment, Confidential Information, and Invention Assignment Agreement with Google, through each applicable vesting date. One sixteenth of the retention bonus will vest on each quarterly anniversary of the Closing Date for the 16 quarters following the Closing Date (subject to proration in the event Mr. Friedman works a reduced schedule and proration or tolling as applicable, in the event of certain leaves of absence from Google, as further described in the Friedman Offer Letter), with payment to be made within 30 calendar days of the applicable vesting date. Mr. Friedman will forfeit any remaining unvested portion of the retention bonus upon his termination of employment with Google.
Pursuant to the Friedman Offer Letter, Mr. Friedman has waived any acceleration of equity benefits, change in control benefits and severance benefits to which he may have been entitled arising under any agreement or understanding between him and us or any Fitbit policy, including his retention agreement with us.
Subject to approval by Alphabet’s board of directors, and based on Mr. Friedman’s employment start date of no later than January 1, 2021, Mr. Friedman will be eligible to receive a number of restricted stock units to acquire shares of Alphabet Class C capital stock equal to the quotient of $2,500,000 (the “Friedman Target Grant Value”) divided by the closing price of Alphabet’s Class C capital stock on the Tuesday immediately prior to the date of grant, anticipated to occur no later than 45 days following Mr. Friedman’s start date (the “Friedman GSUs”). The GSUs are expected to vest in equal monthly installments, on the 25th day of each of the 12 months following the month of grant. The Friedman Target Grant Value will be increased by $2,500,000/12, and the vesting period will be extended by one month, for each 30-day period prior to January 1, 2021 that Mr. Friedman’s employment start date occurs, and will be decreased by $2,500,000/12 and the vesting period will be decreased by one month, for each 30-day period after January 1, 2021 that Mr. Friedman’s employment start date occurs. In the event Mr. Friedman’s employment start date occurs more than 30 days prior to, or following, January 1, 2021, then the Friedman GSUs will be granted on the first non-holiday Wednesday of the month immediately following Mr. Friedman’s employment start date.
In addition, subject to approval by Alphabet’s board of directors, Mr. Friedman will be eligible to receive an additional number of restricted stock units to acquire shares of Alphabet Class C capital stock valued at the currently intended amount of $2,500,000 (the “Intended Friedman GSUs”), with the actual value of such award subject to increase or reduction based on Mr. Friedman’s then current performance and role at Google. It is intended that the Intended Friedman GSUs will be granted in January 2021, and will vest in equal installments on the 25th day of each month beginning January 2022 to December 2022.
Other Arrangements between Our Executive Officers and Google
As of the date of this proxy statement, except as disclosed above, none of our other executive officers have entered into, or committed to enter into, any arrangements or other understandings regarding continued employment or service to Google following the Merger. While it is possible that Google may enter to into such arrangements in the future, at this time there can be no assurance that Google will enter into any employment or other arrangements with our management, or if so, of the terms and conditions of any such arrangements.
Insurance and Indemnification of Directors and Executive Officers
The Merger Agreement provides that, from and after the Effective Time, the Surviving Corporation will fulfill and honor in all respects our obligations and those of our subsidiaries pursuant to each indemnification agreement in effect as of November 1, 2019 between Fitbit or any of our subsidiaries and any individual who at or prior to the Effective Time is a director or officer of Fitbit or any of our subsidiaries and any indemnification provision and any exculpation provision set forth in our restated certificate of incorporation or our restated bylaws or the certificate of incorporation or bylaws of our subsidiaries in effect on November 1, 2019.
For six years after the Effective Time, the Surviving Corporation will maintain officers’ and directors’ liability insurance in respect of acts or omissions occurring prior to the Effective Time covering each such person currently covered by our officers’ and directors’ liability insurance policy on terms with respect to coverage and amount no less favorable than those of such policy in effect on November 1, 2019. However, the Surviving Corporation will not be obligated to pay aggregate premiums in excess of 250% of its most recent annual renewal prior to November 1, 2019 (the “Current Premium”). The officers’ and directors’ liability insurance will be maintained if prepaid “tail” or “runoff” policies have been obtained by Google, by us prior to Effective Time or by the Surviving Corporation at or after the Effective Time, which policies provide such directors and officers with coverage for an aggregate period of six years with respect to claims arising from facts or events that occurred on or before the

51


Effective Time, including, in respect of the Transactions. However, the amount paid for such prepaid policies will not exceed 250% of the Current Premium without the prior written consent of Google.
In the event that, within 60 days following November 1, 2019, Google provides written notice requesting that we obtain such tail or runoff policies, then we will obtain and fully pay the premium (in an amount not to exceed 250% of the Current Premium) for such tail or runoff policies at or prior to the Effective Time. Alternatively, if Google confirms to us that Google or the Surviving Corporation will obtain such tail or runoff policies, we will cooperate with Google to arrange for such policies to be so obtained. In the event that Google fails to provide either such written notice within 60 days following November 1, 2019 or, in the event Google confirms it will obtain such policies but fails to do so at least ten business days prior to the Closing, we may, after consulting in good faith with Google, obtain and fully pay the premium (in an amount not to exceed 250% of the Current Premium) for such tail or runoff policies at or prior to the Effective Time.
Quantification of Potential Payments and Benefits to our Named Executive Officers
In accordance with Item 402(t) of Regulation S-K, the below table sets forth the amount of payments and benefits that each of our named executive officers would or may receive in connection with the Merger. The payments and benefits described below are calculated based on each named executive officer’s existing employment and equity arrangements with us and include certain payments or benefits that are contingent upon services to be provided by such named executive officer to Google following the Closing, but only as set forth under the terms and conditions of our arrangements with the named executive officers. Accordingly, see the section captioned “-Interests of our Directors and Executive Officers in the Merger” above, for a description of the offer letters entered into by Messrs. Park and Friedman with Google that will become effective upon and subject to the Closing.
Please note that the amounts reported below are estimates based on multiple assumptions that may or may not actually occur or be accurate on the relevant date, including assumptions described in footnotes to the table. For example, we have assumed that:
(i)
the relevant price per share of Fitbit Common Stock is $7.35, which is equal to the Merger Consideration;
(ii)
the Effective Time is November 15, 2019, the latest practicable date prior to the filing of this proxy statement; and
(iii)
except where otherwise described below, each named executive officer experiences a “double-trigger” qualifying termination (a termination without “cause,” or resignation for “good reason”), in either case immediately following such time.
The actual amounts payable to our named executive officers will depend on whether the named executive officer experiences a qualifying termination, the date of termination (if any) and the terms of the plans or agreements in effect at such time, and accordingly may differ materially from the amounts set forth below.
Golden Parachute Compensation
Named Executive Officer
 
Cash($)(1)
 
Equity
Awards($)(2)
 
Heath Insurance
Premiums($)(3)
 
Total($)
James Park(4)
 
3,000,000
 
8,348,513
 
14,937
 
11,363,450
Eric Friedman(4)
 
796,250
 
3,875,537
 
29,430
 
4,701,217
Ronald Kisling
 
739,846
 
2,219,825
 
9,958
 
2,969,629
Andy Missan
 
780,362
 
1,567,762
 
30,016
 
2,378,140
Jeff Devine
 
704,615
 
1,333,724
 
29,903
 
2,068,242
_______________
(1) Cash.

(A)
Severance. Pursuant to their respective retention agreements with us, upon the termination of employment by us without “cause” or a termination of employment by the named executive officer for “good reason” (as such terms are defined in the retention agreement), in either case, within the “change in control period” commencing on the date three months prior to the consummation of the Merger and ending 12 months following the consummation of the Merger (in either case, a “NEO qualifying termination”), our named executive officers will become entitled to a lump-sum cash severance payment consisting of (1) 18 months of base salary for Mr. Park and 12 months of base salary for each of our other named executive officers and (2) an amount equal to the named executive officer’s then-current target bonus opportunity, multiplied by a factor of 150% for Mr. Park and 100% for each of our other named executive officers. Cash severance benefits also will be payable to the named executive officers upon a

52


termination of employment by us without “cause” or by the named executive officer for “good reason” outside of the change in control period as described in the section captioned “—Interests of our Directors and Executive Officers in the Merger.”
Named Executive Officer
 
Base Salary Component of Severance($)
 
Bonus Component of Severance($)
 
Total($)
James Park
 
1,200,000
 
1,800,000
 
3,000,000
Eric Friedman
 
455,000
 
341,250
 
796,250
Ronald Kisling
 
420,000
 
315,000
 
735,000
Andy Missan
 
443,000
 
332,250
 
775,250
Jeff Devine
 
400,000
 
300,000
 
700,000
(B)
Retention Payments. Each of Messrs. Kisling, Missan and Devine are eligible to receive cash retention payments equal to 30% of their base salary between November 1, 2019 and the Effective Time. Generally, 50% of the cash retention payments will be payable at the Effective Time subject to continued employment with us through the Effective Time and the remaining 50% of the cash retention payments will be payable six months following the Effective Time, subject to continued employment with Google through such payment date; provided, however, that in the event the named executive officer receives a fixed-term offer of employment from Google, the remaining 50% of the cash retention payment will vest and become payable, subject to the execution of a release of claims, and such release becoming effective, on the earlier of (i) the end of their fixed-term period or (ii) six months following the Effective Time. In the event the named executive officer (1) does not receive an offer of employment from Google or (2) rejects an offer of employment from Google that does not comply with the requirements set forth in Sections 6.12(a)(i) and 6.12(a)(ii) of the Merger Agreement, then in each case, subject to the execution of a release of claims, and such release becoming effective, the cash retention payments will accelerate and be paid in full at the Effective Time.
The following table sets forth the value of the cash retention payments assuming the Effective Time occurs on November 15, 2019.
Named Executive Officer
 
Payable at the Effective Time($)
 
Payable Six Months Following the Effective Time($)
 
Total($)
Ronald Kisling
 
2,423
 
2,423
 
4,846
Andy Missan
 
2,556
 
2,556
 
5,112
Jeff Devine
 
2,307
 
2,307
 
4,615
The actual amount of the cash retention payments is dependent on when the Effective Time occurs. The later the Effective Time, the larger the cash retention payments will be, as the cash retention payments represent a percentage of salary paid to the individual between the signing of the Merger Agreement (November 1, 2019) and the Effective Time. For illustrative purposes only, if the Effective Time were to occur on the one-year anniversary of the signing of the Merger Agreement (November 1, 2020), Mr. Kisling would be entitled to receive an estimated cash retention payment of $126,000, Mr. Missan would be entitled to receive an estimated cash retention payment of $132,900 and Mr. Devine would be entitled to receive an estimated cash retention payment of $120,000, respectively, 50% of which would be payable at the Effective Time and the remaining 50% of which would be payable six months following the Effective Time, subject to the conditions described above.
_______________
(2) Equity.

(A)
Retention Agreements. Pursuant to their respective retention agreements with us, upon a NEO qualifying termination, each named executive officer will become entitled to fully accelerated vesting of any then-unvested Fitbit Options, Fitbit RSUs or Fitbit PSUs.
The following table sets forth the value of each type of unvested equity award held by our named executive officers, calculated based on the Merger Consideration, and assumes that any Fitbit Options with a per share exercise price that equals or exceeds the Merger Consideration will be canceled for no consideration.
Named Executive Officer
 
Value of Unvested Stock Options($)
 
Value of Unvested RSUs($)
 
Value of Unvested PSUs($)(X)
 
Total($)
James Park
 
143,333

 
1,385,041

 
6,820,139

 
8,348,513

Eric Friedman
 
114,667

 
545,186

 
3,215,684

 
3,875,537

Ronald Kisling
 
—

 
2,109,575

 
—

 
2,109,575

Andy Missan
 
—

 
1,457,512

 
—

 
1,457,512

Jeff Devine
 
—

 
1,333,724

 
—

 
1,333,724

(X)
The values listed in this column represent the full value of the Fitbit PSUs held by Messrs. Park and Friedman. Pursuant to the terms of the Merger Agreement, as of the Effective Time, all relevant performance goals with respect to each Fitbit PSU will be deemed achieved at target level and the number of Fitbit PSUs that will be vested as of the Effective Time will be the number of Fitbit PSUs for which the service-based vesting requirement has been satisfied at or prior to the Effective Time. The then remaining Unvested Fitbit PSUs will be canceled and exchanged for the right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to the Unvested Fitbit PSU based on the deemed achievement of all relevant performance goals at target level, with such payment subject to (x) vesting in accordance with the service-based vesting schedule applicable to such Unvested Fitbit PSU immediately

53


prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date and (y) to the terms and conditions of the Unvested Payment Plan.
The number of Fitbit PSUs held by each named executive officer that will be vested as of the Effective Time, and the number of Fitbit PSUs held by each named executive officer that will be unvested as of the Effective Time and the cash payments that will or may become payable with respect to such Unvested Fitbit PSUs (as described above) are as follows:
Named Executive Officer
 
Number of Vested PSUs
(Single-Trigger)
 
Value of
Vested PSUs
(Single-Trigger)($)
 
Number of Unvested PSUs
(Double-Trigger)
 
Value of Unvested PSUs
(Double-Trigger)($)
James Park
 
340,657
 
2,503,829
 
587,253
 
4,316,310
Eric Friedman
 
160,469
 
1,179,447
 
277,039
 
2,036,237
(B)
Special Equity Awards. Each of Messrs. Kisling and Missan were granted 15,000 Fitbit RSUs on November 11, 2019 (the “Special Equity Awards”). These Special Equity Awards will vest in eight equal quarterly installments following November 1, 2019, subject to continued employment by us or our successor through each such vesting date, provided, however, that in the event the named executive officer (1) does not receive an offer of employment from Google or (2) rejects an offer of employment from Google that does not comply with the requirements set forth in Sections 6.12(a)(i) and 6.12(a)(ii) of the Merger Agreement, then in each case, subject to the execution of a release of claims, and such release becoming effective, all remaining unvested Special Equity Awards will fully vest and become payable as of the Effective Time. In the event the named executive officer receives a fixed-term offer of employment from Google, any unvested Special Equity Awards held by the named executive officer will be governed by the Unvested Payment Plan, which provides that if a fixed-term employee’s services terminate on the last day of the fixed term, any unvested payments under the Unvested Payment Plan will fully vest and become payable, subject to the execution of a release of claims, and such release becoming effective. The Special Equity Awards will not constitute “Equity Awards” under the terms of the named executive officer’s retention agreement with us described above, and as a result will not be subject to acceleration under the terms of such agreement, including in the event of a NEO qualifying termination.
The following table sets forth the full value of the Special Equity Award granted to each of Messrs. Kisling and Missan, calculated based on the Merger Consideration.
Named Executive Officer
 
Value of Unvested RSUs($)
Ronald Kisling
 
110,250
Andy Missan
 
110,250
_______________
(3) Benefits. Pursuant to their respective retention agreements, upon a NEO qualifying termination, our named executive officers will become entitled to reimbursement for payment of premiums for continued medical benefits as follows: (1) up to 18 months of premiums paid by Mr. Park for continued medical, vision and dental benefits on behalf of himself and his covered dependents (or an equivalent cash payment if applicable law so requires); and (2) up to 12 months of premiums paid by our other named executive officers for continued medical, vision and dental benefits on behalf of each named executive officer and his covered dependents (or an equivalent cash payment if applicable law so requires).
_______________
(4) As described under the section captioned “-Interests of Our Directors and Executive Officers in the Merger,” Messrs. Park and Friedman have each entered into an offer letter with Google that will become effective upon and subject to the Closing. Pursuant to these offer letters, Messrs. Park and Friedman have each waived any acceleration of equity benefits, change in control benefits and severance benefits to which they may have been entitled arising under an agreement or understanding with us or any Fitbit policy, including the retention agreements described in the table above.
Financing of the Merger
Google’s and the Merger Sub’s obligations under the Merger Agreement are not conditioned on the receipt or availability of any funds, or subject to any financing condition. Google intends to finance the transaction using its cash on hand and has represented to us in the Merger Agreement that it has sufficient cash resources to pay the aggregate Merger Consideration.
Closing and Effective Time
The Closing will take place at 9:00 a.m. (New York City time) no later than the fourth business day after the satisfaction or waiver in accordance with the Merger Agreement of all the conditions to Closing (as described under the section captioned “The Merger Agreement—Conditions to the Closing of the Merger”), other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permitted by the Merger Agreement) of all conditions at the Closing.
Concurrently with the Closing, Google and Fitbit will cause a certificate of merger to be executed, acknowledged and delivered to the Office of the Secretary of State of the State of Delaware for filing, all in accordance with the applicable provisions of the DGCL. The Merger will become effective on such date and at such time as when the certificate of merger has been received for

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filing by the Secretary of State of the State of Delaware or at such later time and date as may be agreed by Google, Fitbit, and Merger Sub in writing and specified in the certificate of merger.
Appraisal Rights
If the Merger is completed, stockholders who do not vote or submit a proxy in favor of the adoption of the Merger Agreement, who properly demand and perfect their appraisal rights, who do not withdraw such demand and who continuously hold such shares through the Effective Time will be entitled to appraisal rights in connection with the Merger under Section 262 of the DGCL.
The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL, which is attached to this proxy statement as Annex C and incorporated herein by reference. The following summary does not constitute any legal or other advice and does not constitute a recommendation that stockholders exercise their appraisal rights under Section 262 of the DGCL. All references in Section 262 of the DGCL and in this summary to a “stockholder” or a “holder of shares” are to the record holder of shares of Fitbit Common Stock unless otherwise noted herein. Only a holder of record of shares of Fitbit Common Stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A person having a beneficial interest in shares of Fitbit Common Stock held of record in the name of another person, such as a bank, broker or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. If you hold your shares of Fitbit Common Stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or the other nominee.
Any stockholder contemplating the exercise of such appraisal rights should review carefully the provisions of Section 262 of the DGCL, which is attached hereto as Annex C, particularly the procedural steps required to properly demand and perfect such rights. Failure to follow the steps required by Section 262 of the DGCL for demanding and perfecting appraisal rights may result in the loss of such rights.
Under Section 262 of the DGCL, holders of shares of Fitbit Common Stock who (1) do not vote or submit a proxy in favor of the adoption of the Merger Agreement; (2) continuously are the record holders of such shares through the Effective Time; (3) follow the procedures set forth in Section 262 of the DGCL; and (4) do not thereafter withdraw their demand for appraisal of such shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their shares of Fitbit Common Stock appraised by the Delaware Court of Chancery and to receive payment in cash of the amount determined by the Delaware Court of Chancery to be the “fair value” of the shares of Fitbit Common Stock, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid on the amount determined to be the fair value. However, the Delaware Court of Chancery will dismiss appraisal proceedings as to all holders of shares of Fitbit Common Stock who are otherwise entitled to appraisal rights unless (x) the total number of shares for which appraisal rights have been demanded and perfected exceeds 1% of the outstanding shares of Fitbit Common Stock as measured in accordance with subsection (g) of Section 262 of the DGCL or (y) the value of the aggregate Merger Consideration in respect of such shares exceeds $1,000,000. We refer to these conditions as the “ownership thresholds.” Unless the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, interest on an appraisal award will accrue and compound quarterly from the Effective Time through the date the judgment is paid at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during such period; provided, however, that at any time before the Delaware Court of Chancery enters judgment in the appraisal proceeding, the Surviving Corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case any such interest will accrue after the time of such payment only on the amount that equals the sum of (1) the difference, if any, between the amount so paid and the “fair value” of the shares as determined by the Delaware Court of Chancery and (2) interest theretofore accrued, unless paid at such time. The Surviving Corporation is under no obligation to make such voluntary cash payment prior to such entry of judgment. Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the $7.35 per share consideration payable pursuant to the Merger Agreement if they did not seek appraisal of their shares.
Under Section 262 of the DGCL, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days prior to the special meeting, must notify each of its stockholders who was such on the record date for notice of such meeting with respect to shares for which appraisal rights are available that appraisal rights are available and include in the notice a copy of Section 262 of the DGCL. This proxy statement constitutes our notice to stockholders that appraisal rights are available in connection with the Merger, and the full text of Section 262 of the DGCL is attached to this proxy statement as Annex C, in compliance with the requirements of Section 262 of the DGCL. In connection with

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the Merger, any holder of shares of Fitbit Common Stock who wishes to exercise appraisal rights or who wishes to preserve such holder’s right to do so should review Annex C carefully. Failure to strictly comply with the requirements of Section 262 of the DGCL in a timely and proper manner may result in the loss of appraisal rights under the DGCL. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of Fitbit Common Stock, we believe that if a stockholder considers exercising such rights, that stockholder should seek the advice of legal counsel. A stockholder who effectively withdraws or loses his, her or its appraisal rights, as provided in the DGCL, will be entitled to receive the Merger Consideration as described in the Merger Agreement, but without interest.
Stockholders wishing to exercise the right to seek an appraisal of their shares of Fitbit Common Stock must fully comply with Section 262 of the DGCL, which means doing, among other things, ALL of the following:
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the stockholder must not vote or submit a proxy in favor of the proposal to adopt the Merger Agreement;
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the stockholder must deliver to us a written demand for appraisal before the vote on the Merger Agreement at the special meeting;
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the stockholder must continuously hold his, her or its shares of Fitbit Common Stock from the date of making the demand through the Effective Time (a stockholder will lose appraisal rights if the stockholder transfers the shares before the Effective Time); and
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the stockholder or the Surviving Corporation must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the Effective Time. The Surviving Corporation is under no obligation to file any petition and has no intention of doing so.
In addition, one of the ownership thresholds must be met.
Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of the Merger Agreement, a stockholder who votes by submitting a proxy and who wishes to exercise appraisal rights must not return a blank proxy, but rather must submit a proxy containing instructions to vote against the adoption of the Merger Agreement or to abstain from voting on the adoption of the Merger Agreement.
Filing Written Demand
Any holder of shares of Fitbit Common Stock wishing to exercise appraisal rights must deliver to us, before the vote on the adoption of the Merger Agreement at the virtual special meeting, a written demand for the appraisal of the stockholder’s shares, and that stockholder must not vote or submit a proxy in favor of the adoption of the Merger Agreement.
A holder of shares of Fitbit Common Stock exercising appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the Effective Time. The demand must reasonably inform us of the identity of the holder and state that the person intends thereby to demand appraisal of the holder’s shares in connection with the Merger. A proxy that is submitted and does not contain voting instructions will, unless timely revoked, be voted in favor of the adoption of the Merger Agreement, and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the adoption of the Merger Agreement or abstain from voting on the adoption of the Merger Agreement. Neither voting against the adoption of the Merger Agreement nor abstaining from voting or failing to vote on the proposal to adopt the Merger Agreement will, in and of itself, constitute a written demand for appraisal satisfying the requirements of Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote on the adoption of the Merger Agreement. A proxy or vote against the adoption of the Merger Agreement will not constitute a demand. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the Merger Agreement at the virtual special meeting may constitute a waiver of appraisal rights.
Only a holder of record of shares of Fitbit Common Stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A demand for appraisal in respect of shares of Fitbit Common Stock issued and outstanding immediately prior to the Effective Time should be executed by or on behalf of the holder of record, fully and correctly, as his, her or its name appears on his, her or its stock certificates, and must state that such person intends thereby to demand appraisal of his, her or its shares of Common Stock issued and outstanding immediately prior to the Effective Time in connection with the Merger. If the

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shares of Fitbit Common Stock are owned of record in a fiduciary or representative capacity, such as by a trustee, guardian or custodian, such demand must be executed by or on behalf of the record owner in such capacity, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners. A record holder, such as a broker who holds shares of Fitbit Common Stock as nominee for several beneficial owners, may exercise appraisal rights with respect to the shares of Fitbit Common Stock issued and outstanding immediately prior to the Effective Time held for one or more beneficial owners while not exercising such rights with respect to the shares of Fitbit Common Stock held for other beneficial owners; in such case, however, the written demand should set forth the number of shares of Fitbit Common Stock issued and outstanding immediately prior to the Effective Time as to which appraisal is sought and where no number of shares of Common Stock is expressly mentioned the demand will be presumed to cover all shares of Common Stock which are held in the name of the record owner. Stockholders who hold their shares of Fitbit Common Stock in brokerage accounts or other nominee forms and who wish to exercise appraisal rights are urged to consult with their brokers to determine the appropriate procedures for the making of a demand for appraisal by such a nominee.
A beneficial owner of shares of Fitbit Common Stock held in “street name” who desires appraisal should take such actions as may be necessary to ensure that a timely and proper demand for appraisal is made by the record holder of such shares. Shares held through brokerage firms, banks and other financial institutions are frequently deposited with and held of record in the name of a nominee of a central security depository, such as Cede & Co. Any beneficial holder desiring appraisal who holds shares through a brokerage firm, bank or other financial institution is responsible for ensuring that the demand for appraisal is made by the record holder. The beneficial holder of such shares should instruct such firm, bank or institution that the demand for appraisal be made by the record holder of the shares, which may be the nominee of a central security depository if the shares have been so deposited. As required by Section 262 of the DGCL, a demand for appraisal must reasonably inform us of the identity of the holder(s) of record (which may be a nominee as described above) and of such holder’s intention to seek appraisal of such shares
ONLY A HOLDER OF RECORD OF SHARES OF FITBIT COMMON STOCK IS ENTITLED TO DEMAND APPRAISAL RIGHTS FOR THE SHARES REGISTERED IN THAT HOLDER’S NAME. STOCKHOLDERS WHO HOLD THEIR SHARES IN BROKERAGE OR BANK ACCOUNTS OR OTHER NOMINEE FORMS AND WHO WISH TO EXERCISE APPRAISAL RIGHTS SHOULD CONSULT WITH THEIR BANK, BROKER OR OTHER NOMINEES, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKER OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKER OR OTHER NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.
All written demands for appraisal pursuant to Section 262 of the DGCL should be mailed or delivered to:
Fitbit, Inc.
Attention: Corporate Secretary
199 Fremont Street, 14th Floor
San Francisco, California 94105
Any holder of shares of Fitbit Common Stock who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the Merger Agreement by delivering to us a written withdrawal of the demand for appraisal and an acceptance of the Merger. However, any such attempt to withdraw the demand made more than 60 days after the Effective Time will require written approval of the Surviving Corporation. Once a petition for appraisal is filed, no appraisal proceeding in the Delaware Court of Chancery will be dismissed without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just. However, notwithstanding the foregoing, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw such stockholder’s demand for appraisal and accept the terms offered upon the Merger within 60 days after the Effective Time.

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Notice by the Surviving Corporation
If the Merger is completed, within ten days after the Effective Time, the Surviving Corporation must notify each holder of shares of Fitbit Common Stock who has made a written demand for appraisal in accordance with Section 262 of the DGCL and who has not voted in favor of the adoption of the Merger Agreement that the Merger has become effective and the effective date thereof.
Filing a Petition for Appraisal
Within 120 days after the Effective Time, but not thereafter, the Surviving Corporation or any holder of shares of Fitbit Common Stock who has complied with Section 262 of the DGCL and is entitled to appraisal rights, under Section 262 of the DGCL may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the Surviving Corporation in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares held by all our stockholders entitled to appraisal. The Surviving Corporation is under no obligation, and has no present intention, to file a petition, and holders should not assume that the Surviving Corporation will file a petition or initiate any negotiations with respect to the fair value of the shares of Fitbit Common Stock. Accordingly, any holders of shares of Fitbit Common Stock who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of their shares of Fitbit Common Stock within the time and in the manner prescribed in Section 262 of the DGCL. The failure of a holder of Fitbit Common Stock to file such a petition within the period specified in Section 262 of the DGCL could nullify the stockholder’s previous written demand for appraisal.
Within 120 days after the Effective Time, any holder of shares of Fitbit Common Stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Surviving Corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the Merger Agreement and with respect to which we have received demands for appraisal, and the aggregate number of holders of such shares. The Surviving Corporation must mail this statement to the requesting stockholder within ten days after receipt of the written request for such a statement or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition seeking appraisal or request from the Surviving Corporation the foregoing statement. As noted above, however, the demand for appraisal can only be made by a stockholder of record.
If a petition for an appraisal is duly filed by a holder of shares of Fitbit Common Stock and a copy thereof is served upon the Surviving Corporation, the Surviving Corporation will then be obligated, within 20 days after such service, to file with the Delaware Register in Chancery a duly verified list (the “Verified List”) containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. Upon the filing of any such petition, the Delaware Court of Chancery may order that notice of the time and place fixed for the hearing on the petition be mailed to the Surviving Corporation and all of the stockholders shown on the Verified List at the addresses stated therein. Such notice will also be published at least one week before the day of the hearing in a newspaper of general circulation published in the City of Wilmington, Delaware, or in another publication determined by the Delaware Court of Chancery. The costs of these notices are borne by the Surviving Corporation.
After notice to the stockholders as required by the court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 of the DGCL and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the stockholders who demanded appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with the direction, the Delaware Court of Chancery may dismiss that stockholder from the proceedings. The Delaware Court of Chancery will dismiss appraisal proceedings as to all our stockholders who are otherwise entitled to appraisal rights unless (1) the total number of shares for which appraisal rights have been demanded and perfected exceeds 1% of the outstanding shares of Fitbit Common Stock as measured in accordance with subsection (g) of Section 262 of the DGCL or (2) the value of the aggregate Merger Consideration in respect of such shares exceeds $1,000,000.
Determination of Fair Value
After the Delaware Court of Chancery determines the stockholders entitled to an appraisal, the appraisal proceeding will be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Delaware Court of Chancery will determine the “fair value” of the shares of Fitbit Common Stock subject to appraisal, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together

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with interest, if any, to be paid upon the amount determined to be the fair value. Upon application by the Surviving Corporation or by any stockholder entitled to participate in the appraisal proceeding, the Delaware Court of Chancery may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any holder of shares whose name appears on the Verified List and, if such shares are represented by certificates and if so required, who has submitted such stockholder’s certificates of stock to the Delaware Register in Chancery, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights or that neither of the ownership thresholds is met. The Delaware Court of Chancery will direct the payment of the fair value of the shares, together with interest, if any, on the amount determined to be the fair value by the Surviving Corporation to the stockholders entitled thereto. Payment will be made to each such stockholder, in the case of holders of uncertificated stock, forthwith, and in the case of holders of shares represented by certificates, upon the surrender to the Surviving Corporation of the certificate(s) representing such stock. The Delaware Court of Chancery’s decree may be enforced as other decrees in such court may be enforced. Unless the court in its discretion determines otherwise for good cause shown, interest from the Effective Time through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the Effective Time and the date of payment of the judgment. However, the Surviving Corporation has the right, at any point prior to the Delaware Court of Chancery’s entry of judgment in the proceedings, to make a voluntary cash payment to each stockholder seeking appraisal. If the Surviving Corporation makes a voluntary cash payment pursuant to subsection (h) of Section 262 of the DGCL during the period between the Effective Time and the date of payment of the judgment, interest will accrue thereafter only on the sum of (1) the difference, if any, between the amount paid by the Surviving Corporation in such voluntary cash payment and the fair value of the shares as determined by the Delaware Court of Chancery and (2) interest theretofore accrued, unless paid at that time.
In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.” In Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd., 177 A.3d 1 (Del. 2017) and DFC Global Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346 (Del. 2017), the Delaware Supreme Court declined to adopt a presumption favoring reliance upon the deal price in determining fair value, but noted that the deal price is one of the relevant factors to be considered, and can often be the best evidence of fair value in arm’s-length mergers with a robust sales process.
Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration they would receive pursuant to the Merger if they did not seek appraisal of their shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a Merger is not an opinion as to, and may not in any manner address, “fair value” under Section 262 of the DGCL. Although we believe that the Merger Consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the Merger Consideration. Neither we nor Google anticipates offering more than the Merger Consideration to any stockholder exercising appraisal rights, and we and Google each reserve the right to make a voluntary cash payment pursuant to subsection (h) of Section 262 and to assert, in any appraisal proceeding, that for purposes of Section 262 of the DGCL, the “fair value” of a share of Fitbit Common Stock is less than the Merger Consideration. If a petition for appraisal is not timely filed or if neither of the ownership thresholds is met, then the right to an appraisal will cease.
The costs of the appraisal proceedings (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may also order that all or a portion of the expenses incurred by a stockholder in connection with an appraisal, including, without limitation, reasonable attorneys’ fees and

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the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to appraisal. In the absence of such an order, each party bears its own expenses.
If any stockholder who demands appraisal of his, her or its shares of Fitbit Common Stock under Section 262 of the DGCL fails to perfect, or loses or successfully withdraws, such holder’s right to appraisal, as provided in the DGCL, the stockholder’s shares of Fitbit Common Stock will no longer be entitled to an appraisal under Section 262 of the DGCL and will instead be deemed to have been converted at the Effective Time into the right to receive the consideration payable in the Merger, without interest and subject to any applicable withholding taxes. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if no petition for appraisal is filed within 120 days after the Effective Time, if neither of the ownership thresholds is met or if the stockholder delivers to the Surviving Corporation a written withdrawal of the holder’s demand for appraisal and an acceptance of the consideration payable in the Merger in accordance with Section 262 of the DGCL, except that any such attempt to withdraw made more than 60 days after the Effective Time will require the written approval of the Surviving Corporation.
From and after the Effective Time, no stockholder who has duly demanded appraisal rights will be entitled to vote such shares of Fitbit Common Stock subject to such demand for any purpose or to receive payment of dividends or other distributions on the stock, except dividends or other distributions on the holder’s shares of Fitbit Common Stock, if any, payable to stockholders as of a time prior to the Effective Time.
Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL may result in the loss of a stockholder’s statutory appraisal rights, in which event a holder of Fitbit Common Stock will be entitled to receive the Merger Consideration. Consequently, any stockholder wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.
Accounting Treatment
The Merger will be accounted for as a “purchase transaction” for financial accounting purposes.
Material U.S. Federal Income Tax Consequences of the Merger
The following discussion is a summary of material U.S. federal income tax consequences of the Merger that may be relevant to U.S. Holders and Non-U.S. Holders of shares of Fitbit Common Stock whose shares are converted into the right to receive cash at closing pursuant to the Merger. This discussion is based upon the United States Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (the “Code”), Treasury Regulations promulgated under the Code, court decisions, published positions of the Internal Revenue Service (the “IRS”), and other applicable authorities, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. This discussion is limited to holders who hold their shares of Fitbit Common Stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment).
This discussion is for general information only and does not address all of the tax consequences that may be relevant to holders in light of their particular circumstances. For example, this discussion does not address:
•
tax consequences that may be relevant to holders who may be subject to special treatment under U.S. federal income tax laws, such as, for example, financial institutions; tax-exempt organizations; holders who acquired Fitbit Common Stock through a 401(k), deferred compensation plan or retirement plan; S corporations; any entities or arrangements classified as partnerships or pass-through entities for U.S. federal income tax purposes or investors in such pass-through entities; insurance companies; mutual funds; dealers in stocks and securities; traders in securities that elect to use the mark-to-market method of accounting for their securities; regulated investment companies; real estate investment trusts; entities that are “controlled foreign corporations” or “passive investment companies” for U.S. federal income tax purposes; Non-U.S. Holders that hold, directly or constructively (or that held, directly or constructively, at any time during the five-year period ending on the date of the merger), 5% or more of the outstanding Fitbit Common Stock; or certain former citizens or long-term residents of the United States;
•
tax consequences to holders who hold their common stock as part of a hedging, constructive sale or conversion, straddle or other risk reduction transaction;

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•
tax consequences to holders that received their shares of Fitbit Common Stock pursuant to the exercise of Fitbit Options or other compensation arrangements;
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tax consequences to holders exercising appraisal rights;
•
tax consequences to holders who own an equity interest, actually or constructively, in Google or the Surviving Corporation following the Merger;
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tax consequences to U.S. Holders whose “functional currency” is not the U.S. dollar;
•
tax consequences to holders who hold their Fitbit Common Stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;
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any U.S. federal estate, gift or alternative minimum tax consequences; or
•
any state, local or foreign tax consequences.
If a partnership (including an entity or arrangement, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of shares of Fitbit Common Stock, then the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding shares of Fitbit Common Stock and partners therein should consult their tax advisors regarding the consequences of the Merger.
No opinion of counsel or ruling from the IRS has been or will be obtained regarding the U.S. federal income tax consequences of the Merger described below. If the IRS contests a conclusion set forth herein, no assurance can be given that a holder would ultimately prevail in a final determination by a court.
A HOLDER SHOULD CONSULT ITS OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE MERGER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
U.S. Holders
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of Fitbit Common Stock that is for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
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an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
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a trust (1) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in Section 7701(a)(30) of the Code; or (2) that has a valid election in effect under applicable Treasury regulations to be treated as a United States person.
The receipt of cash by a U.S. Holder in exchange for shares of Fitbit Common Stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, such U.S. Holder’s gain or loss will be equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares surrendered pursuant to the Merger. A U.S. Holder’s adjusted tax basis generally will equal the amount that such U.S. Holder paid for the shares. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if such U.S. Holder’s holding period in such shares is more than one year at the time of the completion of the Merger. A reduced tax rate on capital gain generally will apply to long-term capital gain of a non-corporate U.S. Holder (including individuals). The deductibility of capital losses is subject to limitations. If a U.S. Holder acquired different blocks of Fitbit Common Stock at different times or different prices, such U.S. Holder must determine its adjusted tax basis and holding period separately with respect to each block of Fitbit Common Stock.

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A surtax of up to 3.8% applies to so-called “net investment income” of certain U.S. citizens and residents, and to undistributed “net investment income” of certain estates and trusts. Net investment income generally includes any gain recognized on the receipt of cash in exchange for shares of Fitbit Common Stock pursuant to the Merger. U.S. Holders should consult their own tax advisors regarding the applicability of this tax to any gain recognized pursuant to the Merger.
Non-U.S. Holders
For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of shares of Fitbit Common Stock that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.
Any gain realized by a Non-U.S. Holder pursuant to the Merger generally will not be subject to U.S. federal income tax unless:
•
the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of 30% (or a lower rate under an applicable income tax treaty);
•
such Non-U.S. Holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year that includes the Merger, and certain other specified conditions are met, in which case such gain generally will be subject to U.S. federal income tax at a rate of 30% (or a lower rate under an applicable income tax treaty); or
•
we are or have been a “United States real property holding corporation” as such term is defined in Section 897(c) of the Code (“USRPHC”) at any time within the shorter of the five-year period ending on the date of completion of the Merger or such Non-U.S. Holder’s holding period with respect to the applicable shares of Fitbit Common Stock (the “relevant period”) and, assuming (as we expect) that shares of Fitbit Class A Common Stock are regularly traded on an established securities market (within the meaning of Section 897(c)(3) of the Code), such Non-U.S. Holder owns (or is deemed to own pursuant to certain attribution rules) (x) more than five percent of all Fitbit Class A Common Stock or at any time during the relevant period or (y) Fitbit Class B Common Stock that had a fair market value on the date that it was acquired in excess of five percent of the aggregate fair market value of the Fitbit Class A Common Stock on that date, in which case such gain with respect to shares of Fitbit Class A Common Stock or Fitbit Class B Common Stock, as applicable, generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons (as described in the first bullet point above), except that the branch profits tax will not apply. Although no assurances can be given in this regard, we believe that we are not, and have not been, a USRPHC at any time during the five-year period preceding the Merger.
Information Reporting and Backup Withholding
Information reporting and backup withholding (at a rate of 24%) may apply to proceeds received by a holder pursuant to the Merger. Backup withholding generally will not apply to (1) a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such holder is not subject to backup withholding on IRS Form W-9 (or a substitute or successor form), (2) a Non-U.S. Holder that provides a certification of such holder’s foreign status on the appropriate series of IRS Form W-8 (or a substitute or successor form), or (3) a holder that otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS. Each holder should consult such holder’s own tax advisor regarding the information reporting and backup withholding tax rules.
THE DISCUSSION SET FORTH ABOVE IS NOT A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX CONSEQUENCES RELEVANT TO HOLDERS OF FITBIT COMMON STOCK. THE TAX CONSEQUENCES OF THE MERGER MAY VARY DEPENDING UPON THE PARTICULAR CIRCUMSTANCES OF EACH STOCKHOLDER. YOU SHOULD CONSULT YOUR TAX ADVISOR CONCERNING THE U.S. FEDERAL, STATE, LOCAL, NON-U.S. INCOME OR OTHER TAX CONSEQUENCES OF THE MERGER TO YOU.

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Regulatory Approvals Required for the Merger
In the Merger Agreement, Google and Fitbit agree to use our reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable law and regulations to consummate and make effective the Transactions, to cause all conditions to the obligations of the other parties to effect the Merger to be satisfied, to obtain all necessary waivers, consents, approvals and other documents required to be delivered thereunder and to effect all necessary registrations and filings and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the Transactions for the purpose of securing to the parties the benefits contemplated by the Merger Agreement, in each case, so that the Closing may occur by no later than the End Date; provided, however, that this period may be extended by either us or Google by three-month periods under certain circumstances, but the End Date may never be extended beyond May 1, 2021.
Antitrust Laws
HSR Act. The Closing is subject to expiration or termination of the applicable waiting period under the HSR Act and the rules thereunder. Under the HSR Act and the rules thereunder, the Merger may not be completed unless certain information has been furnished to the Antitrust Division of the U.S. Department of Justice and to the Federal Trade Commission and the applicable waiting period expires or is terminated. The HSR Act requires the parties to observe a 30-day waiting period (“initial HSR 30-day waiting period”), during which time the Merger may not be consummated, unless that initial HSR 30-day waiting period is terminated early. If, before the expiration of the initial HSR 30-day waiting period, the Antitrust Division of the U.S. Department of Justice or the Federal Trade Commission issues a request for additional information, the parties may not consummate the transaction until 30 days after Alphabet and Fitbit have each substantially complied with such request for additional information (unless this period is shortened pursuant to a grant of early termination or extended by agreement between the parties and the relevant antitrust agency). On November 15, 2019, Alphabet and Fitbit filed our respective notification and report forms pursuant to the HSR Act with the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission.
At any time before or after the Effective Time, the Federal Trade Commission, the Antitrust Division of the U.S. Department of Justice, state attorneys general or private parties can file suit under the antitrust laws to enjoin consummation of the Merger, to impose conditions on the Merger, or to require divestitures.
EC Merger Regulation. The Closing is subject to the European Commission having issued a decision under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the “ECMR”) declaring the Merger compatible with the common market. As is customary, Alphabet and Fitbit have begun pre-notification consultations with the European Commission, and intend to file the formal notification as soon as is reasonably possible. Under the ECMR, the European Commission can issue a decision declaring the Merger compatible with the common market by the end of an initial review period (25 working days after formal notification, subject to certain extensions) or, if the European Commission decides at the end of the initial review period to initiate an extended “Phase 2” investigation (up to additional 90 working days, subject to certain possibilities of extension or interruption), by the end of the Phase 2 investigation period. Alternatively, the European Commission may issue a decision prohibiting the Merger by the end of the Phase 2 investigation period.
Australian Competition and Consumer Act. The Closing is subject to approval, clearance, consent from relevant antitrust authorities or courts, no assertion of jurisdiction by the relevant antitrust authorities or courts and the expiration of any applicable waiting periods, in each case as applicable, or, to the extent the foregoing are not applicable, the presence of other circumstances that are commonly considered a sufficient indication that the relevant antitrust authorities are not objecting to, or are not or no longer reviewing the Merger under the Australian Competition and Consumer Act. Alphabet and Fitbit have started engaging with the Australian Competition and Consumer Commission (the “ACCC”) with regard to the proposed Merger.
United Kingdom Enterprise Act. In the event that the European Commission shall not have declared the Merger compatible with the common market prior to the date, if any, on which the United Kingdom ceases to be a member state of the European Union and the European Commission no longer retains exclusive jurisdiction to review the Merger in the United Kingdom, then the Closing would be subject to approval, clearance, consent from relevant antitrust authorities or courts, no assertion of jurisdiction by the relevant antitrust authorities or courts and the expiration of any applicable waiting periods, in each case as applicable, or, to the extent the foregoing are not applicable, the presence of other circumstances that are commonly considered a sufficient indication that the relevant antitrust authorities are not objecting to, or are not or no longer reviewing the Merger under the United Kingdom Enterprise Act.

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The Merger Agreement does not include other conditions precedent related to merger control. Based upon an examination of publicly available and other information relating to the businesses in which we are engaged, Google and Fitbit believe that the Merger should not violate applicable antitrust laws. Nevertheless, Google and Fitbit cannot be certain that a challenge to the Merger on antitrust grounds will not be made, or, if such challenge is made, what the result will be.
Other Regulatory Approvals
One or more governmental agencies may impose a condition, restriction, qualification, requirement or limitation when it grants the necessary approvals and consents. Third parties may also seek to intervene in the regulatory process or litigate to enjoin or overturn regulatory approvals, any of which actions could significantly impede or even preclude obtaining required regulatory approvals. There is currently no way to predict how long it will take to obtain all of the required regulatory approvals or whether such approvals will ultimately be obtained and there may be a substantial period of time between the approval by stockholders and the completion of the Merger.
Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained, obtained at all or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the Merger, including the requirement to divest assets, or require changes to the terms of the Merger Agreement. These conditions or changes could result in the conditions to the Merger not being satisfied.
Effect on Fitbit if the Merger is Not Completed
If the Merger Agreement is not adopted by our stockholders or if the Merger is not completed for any other reason, our stockholders will not receive any payment for their shares of Fitbit Common Stock. Instead, we will remain a stand-alone public company, our Class A Common Stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and we will continue to file periodic reports with the SEC. In addition, if the Merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that our stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which we operate and risks related to adverse economic conditions.
Furthermore, if the Merger is not completed, and depending on the circumstances that caused the Merger not to be completed, the price of our Class A Common Stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our Class A Common Stock would return to the price at which it trades as of the date of this proxy statement.
Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Fitbit Common Stock. If the Merger is not completed, our Board will continue to evaluate and review our business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate. If the Merger Agreement is not adopted by our stockholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to our Board will be offered or that our business, prospects or results of operation will not be adversely impacted.
Vote Required and Board Recommendation
The Merger Agreement must be adopted by the affirmative vote of the holders of a majority of the aggregate voting power of the outstanding shares of Fitbit Common Stock entitled to vote on such matter, voting together as a single class. If you abstain from voting, fail to cast your vote, at the virtual special meeting or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement.
Our Board has unanimously approved the Merger Agreement and determined that the Merger Agreement and the Merger are fair to and in the best interests of our stockholders.
Our Board unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement.

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THE MERGER AGREEMENT
Explanatory Note Regarding the Merger Agreement
The following summary describes certain material provisions of the Merger Agreement. This summary is not complete and is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger. The rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this proxy statement. Capitalized terms used in this section but not defined in this proxy statement have the meaning ascribed to them in the Merger Agreement.
The representations, warranties, covenants and agreements described below and included in the Merger Agreement (1) were made only for purposes of the Merger Agreement and as of specific dates; (2) were made solely for the benefit of the parties to the Merger Agreement; and (3) may be subject to important qualifications, limitations and supplemental information agreed to by us, Google and Merger Sub, including being qualified by confidential disclosure schedules provided by us to Google and Merger Sub in connection with the execution of the Merger Agreement. In addition, the representations and warranties may have been included in the Merger Agreement for the purpose of allocating contractual risk between us, Google and Merger Sub rather than to establish matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable under federal securities laws or from what may be viewed as material to stockholders.
Stockholders are generally not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of us, Google or Merger Sub or any of their respective affiliates or businesses.
You should not rely on the covenants in the Merger Agreement as actual limitations on the respective businesses of us, Google or Merger Sub, because the parties may take certain actions that are either expressly permitted in the confidential disclosure schedules or as otherwise consented to by the appropriate party, which consent may be given without notice to the public.
The Merger Agreement is described below, and included as Annex A, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding us, Google or Merger Sub, or their respective businesses.
The Merger
Upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub will be merged with and into Fitbit. The separate existence of Merger Sub will cease and Fitbit will continue as the Surviving Corporation and a wholly owned subsidiary of Google.
Closing and Effective Time of Merger
The Closing will take place at 9:00 a.m. (New York City time) on the fourth business day after the satisfaction or, to the extent permitted under the Merger Agreement, waiver of the conditions to closing (other than those conditions that by their nature are to be satisfied by actions to be taken at the Closing, but subject to the satisfaction or waiver (to the extent permitted under the Merger Agreement) of all conditions at the Closing) or at any other place, date and time that us and Google may agree in writing. For a more detailed description of the conditions to Closing, see the section captioned “—Conditions to the Merger.”
The Merger will become effective on the date and at the time the certificate of merger is received for filing by the Secretary of State of the State of Delaware or at a later date and time as may be agreed by us and Google in writing and specified in the certificate of merger.
Effects of the Merger
At the Effective Time, the certificate of incorporation of the Merger Sub will be the certificate of incorporation of the Surviving Corporation and the bylaws of the Merger Sub will be the bylaws of the Surviving Corporation, except that the name of the Surviving Corporation will be “Fitbit, Inc.” The directors and the officers of Merger Sub immediately prior to the Effective Time will be the directors and officers of the Surviving Corporation immediately after the Effective Time until successors are duly elected or appointed and qualified.

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Merger Consideration
At the Effective Time, each share of Fitbit Common Stock outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive $7.35 in cash, without interest, other than:
•
each share of Fitbit Common Stock held by Google, Merger Sub, Fitbit (including Fitbit Common Stock held in treasury by Fitbit) or by any of their respective wholly owned subsidiaries immediately prior to the Effective Time, which will be canceled without any payment or distribution; and
•
each share owned by stockholders who have properly exercised and perfected their right to appraisal and payment in accordance with Section 262 of the DGCL, which will be treated as described in the section captioned “Proposal 1: Adoption of the Merger—Appraisal Rights.”
Subject to the above exceptions, from and after the Effective Time, each holder of Fitbit Common Stock outstanding immediately prior to the Effective Time will cease to have any rights with respect to such shares, except the right to receive the Merger Consideration as provided in the Merger Agreement, and such shares will no longer be outstanding and will automatically be canceled.
Payment for Shares of Fitbit Common Stock
Prior to the Effective Time, Google will appoint a paying agent reasonably acceptable to us to act as exchange agent for the holders of shares of Fitbit Common Stock. On the Closing Date or on the first business day following the Closing Date, Google will deposit, or will cause to be deposited, with the paying agent the aggregate Merger Consideration payable to our stockholders.
Promptly (but in no event later than five business days) after the Effective Time, Google will send, or will cause the paying agent to send, to all record holders of Fitbit Common Stock whose shares were converted into the right to receive the Merger Consideration, a letter of transmittal and instructions for use in obtaining the payment of such Merger Consideration. Each holder of Fitbit Common Stock whose shares have been converted into the right to receive the Merger Consideration will be entitled to receive the Merger Consideration upon (i) surrender to the paying agent a certificate, together with a duly completed and validly executed letter of transmittal and such other documents as may be reasonably requested by the paying agent or Google, or, (ii) in the case of book-entry shares, receipt of an “agent’s message” by the paying agent or such other evidence, if any, of transfer as may be reasonably requested by the paying agent or Google. No interest will be paid or accrued on the cash payable upon the surrender or transfer of any such certificate or book-entry shares. Each of Google, Merger Sub, Fitbit, the Surviving Corporation and the paying agent will be entitled to deduct and withhold from the consideration payable to any person pursuant to the Merger Agreement such amounts as are required to be deducted and withheld from such payment under any applicable tax law and any such amounts will be treated as having been paid to such person for all purposes under the Merger Agreement.
Treatment of Fitbit Equity Awards and Warrant
Treatment of Fitbit Options
At the Effective Time:
•
each Fitbit Option (whether vested or unvested) with a per share exercise that equals or exceeds the Merger Consideration will be immediately canceled for no consideration;
•
each Fitbit Option (whether vested or unvested) outstanding as of immediately prior to the Effective Time held by a non-employee director of our Board will be canceled and converted into the right to receive an amount in cash, without interest, equal to the Option Consideration;
•
each vested Fitbit Option outstanding as of immediately prior to the Effective Time will be canceled and converted into the right to receive an amount in cash, without interest, equal to the Option Consideration; and
•
each unvested Fitbit Option outstanding as of immediately prior to the Effective Time (other than those held by non-employee directors of our Board) will be canceled and converted into the right to receive the Option Consideration, and the payment of such Option Consideration will be subject to (x) vesting in accordance with the vesting schedule applicable to such unvested Fitbit Option immediately prior to the Effective Time, subject to such holder remaining

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employed by or otherwise in service to Google on each applicable vesting date, and (y) to the terms and conditions of the Unvested Payment Plan.
If the holder of an unvested Fitbit Option (other than those held by non-employee directors of our Board) does not execute and deliver an Unvested Payment Plan Agreement within the timeframe set forth in the Unvested Payment Plan Agreement, the holder will forfeit any and all rights with respect to the unvested Fitbit Option, including any right to payments with respect to the unvested Fitbit Option.
Treatment of Fitbit RSUs
At the Effective Time:
•
each Fitbit RSU (whether vested or unvested) held by a non-employee director of our Board immediately prior to the Effective Time will be canceled and converted into a right to receive an amount in cash, without interest, equal to the RSU Consideration;
•
each vested Fitbit RSU outstanding as of immediately prior to the Effective Time will be canceled and converted into the right to receive an amount in cash, without interest, equal to the RSU Consideration; and
•
each unvested Fitbit RSU outstanding as of immediately prior to the Effective Time (other than those held by non-employee directors of our Board) will be canceled and converted into the right to receive the RSU Consideration, and the payment of such RSU Consideration will be subject to (x) vesting in accordance with the vesting schedule applicable to such unvested Fitbit RSU immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date, and (y) the terms and conditions of the Unvested Payment Plan.
If the holder of an unvested Fitbit RSU does not execute and deliver an Unvested Payment Plan Agreement within the timeframe set forth in the Unvested Payment Plan Agreement, the holder will forfeit any and all rights with respect to the unvested Fitbit RSU, including any right to payments with respect to the unvested Fitbit RSU.
Treatment of Fitbit PSUs
At the Effective Time:
•
each Vested Fitbit PSU will be canceled and converted into the right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to the Vested Fitbit PSU based on the deemed achievement of all relevant performance goals at target level; and
•
each Unvested Fitbit PSU will be canceled and exchanged for the right to receive an amount in cash, without interest, equal to the product of (A) the Merger Consideration multiplied by (B) the total number of shares subject to the Unvested Fitbit PSU based on the deemed achievement of all relevant performance goals at target level, with such payment subject to (x) vesting in accordance with the service-based vesting schedule applicable to such Unvested Fitbit PSU immediately prior to the Effective Time, subject to such holder remaining employed by or otherwise in service to Google on each applicable vesting date and (y) the terms and conditions of the Unvested Payment Plan.
Any consideration payable in respect of Unvested Fitbit PSUs will not be subject to any performance-based vesting requirements and will be subject solely to the service-based vesting requirements applicable to the applicable Unvested Fitbit PSU as of immediately prior to the Effective Time. If the holder of an Unvested Fitbit PSU does not execute and deliver an Unvested Payment Plan Agreement within the timeframe set forth in the Unvested Payment Plan Agreement, the holder will forfeit any and all rights with respect to the Unvested Fitbit PSUs, including any right to payments with respect to the Unvested Fitbit PSUs.
Treatment of Warrant
At the Effective Time, the Warrant will be canceled unless exercised prior to such time. Prior to the Effective Time, we will deliver to the holder of the Warrant any notice required pursuant to the terms of the Warrant.

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Treatment of the Employee Stock Purchase Plan
Our ESPP will terminate as of immediately prior to the Closing Date. No new offering period under the ESPP will commence on or after November 1, 2019. Participants in the ESPP will not be able to alter their payroll deductions from those in effect as of November 1, 2019 (other than to reduce or discontinue their participation in the ESPP in accordance with the terms and conditions of the ESPP) or make separate non-payroll contributions to the ESPP on or following November 1, 2019, except as may be required by applicable law. The amount of the accumulated contributions of each participant under the ESPP as of immediately prior to the Effective Time will, to the extent not used to purchase shares of Fitbit Common Stock in accordance with the terms and conditions of the ESPP, be refunded in cash to such participant as promptly as practicable following the Effective Time (without interest).
The effect of the Merger upon our other employee benefit plans is more fully described under “—Employee Benefits.”
Representations and Warranties
In the Merger Agreement, we made certain representations and warranties to Google and Merger Sub relating to, among other things:
•
the corporate organization, good standing, power and qualification of Fitbit and our subsidiaries;
•
our capital structure, including with respect to our equity awards and outstanding indebtedness;
•
our corporate power and authority to enter into the Merger Agreement and the enforceability of the Merger Agreement against us;
•
our Board resolving to recommend that our stockholders adopt the Merger Agreement, determining that the Merger Agreement and the Merger are fair to and in the best interests of our stockholders, approving the Merger Agreement and the Merger and directing the adoption of the Merger Agreement to be submitted to a vote at the special meeting of our stockholders;
•
the absence of conflicts with or violations of any provision of the organizational documents of ours and our subsidiaries, certain contracts to which we are subject, or applicable law, regulations or orders as a result of our executing the Merger Agreement or consummation of the Transactions;
•
the accuracy of our filings with the SEC, including financial statements included or incorporated by reference therein;
•
the adequacy of our internal accounting controls and procedures;
•
the absence of specified undisclosed liabilities;
•
our and our subsidiaries’ permits, authorizations, licenses and other matters of any governmental entity required for us and our subsidiaries to own, lease and operate the properties and assets and operate our business as currently conducted;
•
our compliance with applicable law, including anti-corruption laws;
•
our compliance environmental laws and regulations;
•
our employee benefits plans;
•
the absence of certain changes or events since June 29, 2019 and the absence of a Company Material Adverse Effect (as defined below) since December 31, 2018;
•
investigations and litigation matters;
•
information supplied relating to us in the proxy statement;
•
tax matters;

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•
employment and labor matters;
•
intellectual property and information technology systems;
•
real property leased, owned or subleased by us and our subsidiaries;
•
insurance coverage;
•
the opinion of Fitbit’s financial advisor rendered to our Board;
•
the existence and enforceability of specified categories of our Material Contracts (as defined in the Merger Agreement), the absence of any violation or breach of or default or material dispute thereunder and any notices of the intention to terminate or modify those Material Contracts;
•
data protection and cybersecurity;
•
our top suppliers and top customers;
•
our products and product returns;
•
related party transactions;
•
the payment of fees to finders and brokers in connection with the Merger Agreement; and
•
the inapplicability of anti-takeover statutes or regulations (including Section 203 of the DGCL) to the Transactions.
In addition, in the Merger Agreement, Google and Merger Sub each made representations and warranties relating to, among other things:
•
the corporate organization, good standing, power and qualification of Google and Merger Sub;
•
Google’s and Merger Sub’s corporate power and authority to enter into the Merger Agreement;
•
the due execution and delivery by Google and Merger Sub of the Merger Agreement and the enforceability of the Merger Agreement against Google and Merger Sub;
•
the absence of conflicts with the organizational documents of Google or Merger Sub, applicable law or orders as a result of Google’s and Merger Sub’s execution of the Merger Agreement or consummation of the Transactions;
•
the absence of proceedings that seek to prevent or materially delay the Merger Agreement;
•
information supplied by Google and the Merger Sub for inclusion in this proxy statement;
•
the payment of fees to brokers or finders in connection with the Merger Agreement;
•
sufficiency of cash resources to pay the Merger Consideration; and
•
Google’s ownership and operation of Merger Sub since its formation.
Many of our representations and warranties are qualified by a knowledge, materiality, or Company Material Adverse Effect standard. For purposes of the Merger Agreement, “knowledge” means the actual knowledge of certain of our specified employees after reasonable inquiry. For purposes of the Merger Agreement, “Company Material Adverse Effect” means any state of facts, circumstance, condition, event, change, development, occurrence, result or effect (each, an “Effect”) that, individually or in combination with any other Effect, (i) is or would reasonably be expected to be materially adverse to the business, condition (financial or otherwise), or our results of operations and those of our subsidiaries, taken as a whole, or (ii) would prevent, materially impair or materially delay the timely performance by us of, or has or would have a material adverse effect on our ability to, timely perform, our obligations under the Merger Agreement. However, no Effect will constitute, or be taken into

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account in determining whether there has been, a Company Material Adverse Effect to the extent that such Effect arises out of or results from:
(A)
changes in general, global economic or business conditions, including any changes in or affecting financial, credit, foreign exchange or capital market conditions;
(B)
changes in conditions generally affecting the industries in which we and our subsidiaries operate;
(C)
changes in political conditions, geopolitical conditions, or the commencement, continuation or escalation of any military conflict, declared or undeclared war, armed hostilities, terrorism, government shutdown, acts of foreign or domestic terrorism, or other national or international calamity, including any material worsening of such conditions threatened or existing as of November 1, 2019;
(D)
any hurricane, flood, tornado, earthquake or other natural disasters;
(E)
any failure by us or any of our subsidiaries to meet any internal or external projections, forecasts, estimates, budget or expectations of the our revenue, earnings or other financial performance or results of operations for any period, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from this definition of “Company Material Adverse Effect” may constitute a Company Material Adverse Effect and may be taken into account for the purpose of determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur);
(F)
the execution and delivery of the Merger Agreement, the pendency or anticipated consummation of the Transactions or the public announcement of the Merger Agreement or the Merger (including the identity of, or any facts or circumstances relating to, Google as our acquirer), or any leaks or rumors related to the Merger Agreement or the Merger, including the impact thereof on relationships, contractual or otherwise, with our officers, employees, customers, manufacturers, suppliers, distributors, partners, or other business relationships (provided that this clause will not apply to any representation or warranty to the extent the purpose of such representation or warranty is to directly address the consequences resulting from the execution and delivery of the Merger Agreement or the consummation of the Transactions);
(G)
any legal or related proceedings made or brought against us or our Board, relating to, in connection with, or arising out of the Merger or the other Transactions, including the proxy statement (provided that this clause will not apply to qualify our representation regarding proceedings pending or, to our knowledge, threatened, that challenge or seek to prevent, enjoin, alter or materially delay, or recover any damages or obtain any other remedy in connection with, the Merger Agreement or the Transactions, as of November 1, 2019);
(H)
changes in GAAP or International Financial Reporting Standards or the interpretation thereof;
(I)
changes in applicable law or the interpretation thereof, including the imposition of new or increased tariffs;
(J)
any action or failure to take any action which action or failure to act is requested or consented to in writing by Google, any action expressly required by the Merger Agreement (other than pursuant to the Affirmative Interim Operating Covenants (as defined below) (except actions undertaken with the prior written consent of Google)), or the failure to take any action expressly prohibited by the terms of the Merger Agreement (other than the failure to take an action that is prohibited under Negative Interim Operating Covenants (as defined below), unless Google unreasonably withholds, conditions or delays its consent to such action); and
(K)
any change in the price or trading volume of shares of Fitbit Common Stock or any other publicly traded securities of ours or any of our subsidiaries in and of itself (it being understood and agreed that the facts and circumstances giving rise to such change that are not otherwise excluded from the definition of a “Company Material Adverse Effect” may constitute a Company Material Adverse Effect and may be taken into account for the purpose of determining whether a Company Material Adverse Effect has occurred or is reasonably expected to occur);
However, with respect to any Effect arising out of or resulting from any change or event referred to in clause (A), (B), (C), (D), (H) or (I) above, only to the extent such Effect has, or is reasonably expected to have, a disproportionate adverse effect on the business, condition (financial or otherwise) or results of operations of ours and our subsidiaries, taken as a whole, as compared

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to other companies that operate in the industries in which we and our subsidiaries operate, in which case only the incremental disproportionate effect may be taken into account in determining whether there has been a Company Material Adverse Effect.
Conduct of Business Prior to Closing
During the period commencing on November 1, 2019 and ending on the earlier of the termination of the Merger Agreement and the Effective Time (the “Pre-Closing Period”), except to the extent required by applicable law, undertaken with the prior written consent of Google (which consent will not be unreasonably withheld, conditioned or delayed), or expressly permitted, prohibited or required by the Merger Agreement, we will, and will cause each of our subsidiaries to, (i) conduct our business in the ordinary course of business, and (ii) use commercially reasonable efforts to :
•
maintain and preserve intact our business organization, assets, technology, present lines of business, rights and franchises;
•
keep available the services of employees who are important to the operation of our business or the business of our subsidiaries as is presently conducted;
•
maintain in effect all of our material permits; and
•
preserve our relationships with those persons having significant business relationships with us or any of our subsidiaries (the foregoing clauses (i) and (ii) are collectively referred to as the “Affirmative Interim Operating Covenants”).
In addition, without limiting the generality of the Affirmative Interim Operating Covenants, during the Pre-Closing Period, except to the extent required by applicable law, undertaken with the prior written consent of Google (which consent will not be unreasonably withheld, conditioned or delayed), except as expressly contemplated by the Merger Agreement or set forth in the confidential disclosure schedules, we will not, and will not permit any of our subsidiaries to (the following are collectively referred to as the “Negative Interim Operating Covenants”):
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amend our or our subsidiaries’ restated certificate of incorporation or restated bylaws, or comparable organizational or governing documents;
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split, combine, subdivide or reclassify any of our capital stock;
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amend any term of any of our or our subsidiaries’ securities (including by merger, consolidation or otherwise);
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declare or pay any dividend on or make any other distribution on (whether in cash, stock, property or otherwise) in respect of our capital stock, or any other securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of our capital stock (except (A) dividends paid by any of our wholly owned subsidiaries (to the extent such dividends would not result in a material tax liability and are paid in the ordinary course of business), or (B) the acceptance of shares of Fitbit Common Stock as payment for the exercise price of Fitbit Options or for withholding taxes incurred in connection with the exercise of Fitbit Options or settlement of Fitbit RSUs;
•
issue, deliver, sell, grant, subject to any lien (other than a Permitted Lien (as defined in the Merger Agreement)), pledge or otherwise dispose of or permit to become outstanding any additional shares of our capital stock or securities convertible or exchangeable into, or exercisable for, any shares of our capital stock or any options, warrants, or other rights of any kind to acquire any shares of our capital stock, except pursuant to the exercise of options or the settlement of our stock awards outstanding as of November 1, 2019, in each case in accordance with their terms, or enter into any agreement, understanding or arrangement with respect to the sale or voting of our capital stock or equity interests;
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adopt any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, corporate migration, redomiciliation or other reorganization or file a petition in bankruptcy under any provisions of applicable law or consent to the filing of any bankruptcy petition against us or any of our subsidiaries under any similar applicable law;
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create any subsidiary;

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•
other than renewals of existing letters of credit, incur any indebtedness or modify in any material respect the terms of any outstanding indebtedness;
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grant or suffer to exist any material liens on any of our or our subsidiaries’ properties or assets, tangible or intangible, other than Permitted Liens;
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make any capital investment in, loan or advance to, or make or forgive any loan to, any other person, except for (A) intercompany loans, advances, or capital contributions (subject to certain exceptions), (B) advances for reimbursable employee expenses in the ordinary course of business and (C) extensions of credit to customers in the ordinary course of business;
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other than in the ordinary course of business or in accordance with any contract in effect on November 1, 2019, sell, transfer, lease, or otherwise dispose of or encumber any of our material tangible properties or assets
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other than in the ordinary course of business, grant any new material refunds, credits, rebates or allowances to any customers;
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acquire any other person or business or any material assets of any other person;
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make any material investment in any other person either by purchase of stock or securities, contributions to capital, property transfers or purchase of property or assets of any person, other than a wholly owned subsidiary of Fitbit;
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make any capital expenditures that are in excess of the capital expenditure budget set forth in the confidential disclosure schedules by more than five percent in the aggregate;
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except in the ordinary course of business, (A) enter into, amend or cancel any Material Contract, (B) enter into any new Material Contract or any other contract that would result in payments exceeding $1,000,000 annually that will (1) not expire by its terms in 12 months or fewer and (2) cannot be terminated by us or any of our subsidiaries without material penalty upon no more than 12 months’ notice;
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adopt, amend, or terminate any employee plan, make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the employee plans;
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increase in any manner the compensation (including severance, change-in-control and retention compensation) or benefits of any employee or other service providers;
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grant, or commit to grant, any equity-related, performance, incentive or similar awards or bonuses to any employee or take any action that would result in the acceleration of vesting or adjustment of exercisability of any outstanding equity-based award;
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hire or promote any employee at the level of senior director or above (or employees with similar levels of compensation), other than ordinary course hires to fill vacancies or ordinary course promotions;
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terminate the employment or services of any officer or any employee at the level of senior director unless such termination results from such employee (1) willfully failing to perform his or her duties, (2) engaging in serious misconduct, or (3) being convicted of or entering a plea of guilty or no contest to any crime;
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enter into or negotiate to enter into any collective bargaining agreement, works council or similar agreement or arrangement;
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implement or adopt any change in our accounting principles, policies, practices or methods other than may be required by GAAP or applicable law;
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change in any material respect the policies or practices regarding accounts receivable or accounts payable or fail to manage working capital materially in accordance with past practices;
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commence any legal proceedings outside the ordinary course of business;

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•
settle or offer to settle any legal proceeding except for settlements or compromises that involving monetary remedies less than $500,000 individually and $1,000,000 in the aggregate that do not impose any other material restriction or encumbrances on our business;
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settle any stockholder litigation;
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make, change or revoke any material tax election, change any material tax accounting method, file any material amended tax return or claim for a material tax refund, enter into any voluntary disclosure agreement or any closing agreement;
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abandon or discontinue any existing material line of business;
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materially reduce the amount of insurance coverage or fail to renew any material existing insurance policies;
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change our cash management customs and practices (including the collection of receivables and payment of payables);
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amend or fail to maintain any material permits;
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transfer, license or encumber any of our intellectual property other than non-exclusive licenses to customers or to resellers and distributors for the purpose of selling our products;
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fail to maintain our registered and unregistered intellectual property;
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change any privacy policies or other policies governing the processing of any personal information that would diminish or restrict the usage of personal information after the Closing;
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enter into any transaction with any of our stockholders (in its capacity as such);
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other than in the ordinary course of business, enter into any transaction with any of our directors or officers or any of our subsidiaries;
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amend or otherwise modify any engagement letter between us and our financial advisor, or enter into a new engagement letter with any such financial advisor; or
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agree to take (by contract or otherwise) any of the actions above. 
No Solicitation; Acquisition Proposals
Under the Merger Agreement, we agreed not to, and agreed to cause our affiliates and our or their respective representatives not to, directly or indirectly:
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initiate, solicit, authorize or knowingly encourage, or knowingly facilitate the submission or making of, any Acquisition Proposal, or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Acquisition Proposal;
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other than informing third parties of the existence of the no-solicitation provision, conduct, continue, participate or engage in negotiations or discussions with, or furnish any information concerning us or any of our subsidiaries to, any third party relating to an Acquisition Proposal or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Acquisition Proposal (other than requesting the clarification of the terms and conditions thereof so as to determine whether the Acquisition Proposal is, or could reasonably be expected to result in, a Superior Proposal, as defined below); or
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enter into any contract (written or oral, binding or non-binding, preliminary or definitive) relating to an Acquisition Proposal.
From and after the execution and delivery of the Merger Agreement, we will, and will cause our affiliates and our and their respective representatives to: 

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•
immediately cease and cause to be terminated all discussions or negotiations with any person existing on November 1, 2019 with respect to any Acquisition Proposal, or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Acquisition Proposal;
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terminate access by any third party to any physical or electronic data room or other access to our data or information, in each case relating to or in connection with, any Acquisition Proposal or any potential Acquisition Transaction (as defined below);
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request the prompt return or destruction of all nonpublic information provided to any third party in the two years immediately preceding November 1, 2019 in connection with any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Acquisition Proposal or a proposed Acquisition Transaction; and
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enforce, and not waive or modify, the provisions of any binding confidentiality or non-disclosure agreement entered into with respect to any Acquisition Proposal or any potential Acquisition Transaction, including any standstill provisions contained therein.
Notwithstanding these restrictions, if, at any time prior to the receipt of the approval of our stockholders to adopt the Merger Agreement, we receive an unsolicited, written bona fide Acquisition Proposal (which was made after November 1, 2019 and did not result from a breach of our no-solicitation obligations), we, our Board and our representatives may engage in negotiations or discussions and furnish any information and reasonable access to any third party making such Acquisition Proposal if, and only if, our Board determines in good faith, after consultation with the our outside legal counsel and outside independent financial advisors, that such Acquisition Proposal constitutes a Superior Proposal or would reasonably be expected to lead to or result in a Superior Proposal and failure to take such action would be inconsistent with our Board’s fiduciary duties to our stockholders. However, prior to providing access to or furnishing the information noted above:
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we must (A) have received from the third party making such Acquisition Proposal an executed Acceptable Confidentiality Agreement (as defined in the Merger Agreement) or (B) if the third party is already party to an existing confidentiality agreement as of November 1, 2019, if necessary, amend the existing agreement so that it is an Acceptable Confidentiality Agreement;
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any such information or access so furnished has been previously provided to Google or is provided to Google concurrently with it being furnished to the third party; and
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written notice must be provided to Google promptly after our Board makes the determination to engage in negotiations or discussions and furnish access to any third party (and in no event later than the earlier to occur of (x) 36 hours and (y) one business day after such determination) and in any event prior to furnishing any such information or engaging in such negotiations or discussions.
We must also promptly (and in any event within the earlier to occur of (x) 36 hours and (y) one business day following the time of receipt) advise Google in writing in the event that we or any of our representatives receives any Acquisition Proposal or any inquiry, expression of interest, proposal, offer or request for information that would reasonably be expected to lead to or result in an Acquisition Proposal, and in connection with such notice, provide to Google the material terms and conditions (including the identity of the third party making any such Acquisition Proposal, copies of any material documentation, including copies of any related financing commitments, fee letters (subject to customary redactions) and other material transaction documents, and a written summary of any oral proposals) of any such Acquisition Proposal. From and after the execution and delivery of the Merger Agreement, we must keep Google promptly informed in writing on a reasonably current basis of any material changes to, the terms of any such Acquisition Proposal and any material discussions and negotiations concerning the material terms and conditions thereof and provide to Google as soon as practicable after receipt of any written indication of interest (or amendment thereto) or any written material received in connection therewith (or amendment thereto) including copies of any proposed Alternative Acquisition Agreement (as defined below) (including any drafts thereof) and any proposed financing commitments, fee letters (subject to customary redactions) and other transaction documents related thereto (including drafts thereof).

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Ability to Change Board Recommendation; Superior Proposal
Our Board unanimously (a) determined that the Merger Agreement and the Merger are fair to and in the best interests of our stockholders, (b) approved the Merger Agreement and the Merger, (c) directed that the adoption of the Merger Agreement be submitted to a vote at a meeting of our stockholders and (d) resolved the Board Recommendation.
The Merger Agreement provides that our Board, or any committee thereof, will not:
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withdraw (or qualify or modify in a manner adverse to Google), or publicly propose to withdraw (or so qualify or modify), the Board Recommendation;
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fail to include the Board Recommendation in the proxy statement; or
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fail to publicly reaffirm the Board Recommendation within five business days after Google so requests in writing (provided that Google makes such request only after a material development has occurred that Google believes in good faith, has created uncertainty as to the position of our Board or whether the required vote of our stockholders with respect to the adoption of the Merger Agreement will be obtained).
Each of the foregoing is individually referred to as a “Change in Recommendation.”
Notwithstanding anything to the contrary in the Merger Agreement, at any time prior to the receipt of the approval of our stockholders of the adoption of the Merger Agreement, in the event a material development or material change in circumstances (other than relating to or in connection with an Acquisition Proposal, Acquisition Transaction or Superior Proposal) occurs or arises that was not known and not reasonably foreseeable by our Board, our Board may make a Change in Recommendation if and only if our Board determines in good faith, after consultation with the our outside legal counsel and outside independent financial advisors, that the failure to effect such Change in Recommendation would be inconsistent with the fiduciary duties of our Board to our stockholders under applicable law and that we will have provided Google four business days’ prior written notice advising Google that we intend to take such action and specifying, in reasonable detail, the reasons for such action and:
•
during the four business day period, if requested by Google, we will have engaged in good faith negotiations with Google regarding changes to the terms of the Merger Agreement; and
•
we will have considered any adjustments to the Merger Agreement (including a change to the price terms hereof) and any other agreements that may be irrevocably committed to in writing by Google (the “Proposed Changed Terms”) no later than 11:59 p.m., New York City time, on the fourth business day of such four business day period and will have determined in good faith (after consultation with our outside legal counsel and outside independent financial advisors) that the failure to make a Change in Recommendation would be inconsistent with our Board’s fiduciary duties to our stockholders under applicable law.
In addition, at any time prior to the receipt of the approval of our stockholders of the adoption of the Merger Agreement, if, in response to an unsolicited, written bona fide Acquisition Proposal that did not result from a breach of our no-solicitation obligations, our Board determines in good faith (after consultation with our outside legal counsel and outside independent financial advisors) that (i) such Acquisition Proposal constitutes a Superior Proposal and (ii) the failure to approve or recommend such Superior Proposal would be inconsistent with the fiduciary duties of our Board to our stockholders under applicable law, we may terminate the Merger Agreement if we (x) have complied in all material respects with and not materially breached our no-solicitation obligations under the Merger Agreement, (y) pay the Company Termination Fee to Google prior to or concurrently with such termination and (z) concurrently with such termination, enter into a definitive written agreement that documents the terms and conditions of such Superior Proposal. However, prior to such termination:
•
we must have provide Google four business days’ prior written notice advising Google that we intend to take such action and providing Google a copy of the relevant proposed transaction agreement or the latest draft thereof or, to the extent such agreement or draft and other documents do not exist, a written summary of the material terms and conditions of such Superior Proposal, and any other related available material documentation and material correspondence relating to such Superior Proposal (the “Superior Proposal Notice”); and

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•
during such four business day period, if requested by Google, we will have engaged in good faith negotiations with Google regarding changes to the terms of the Merger Agreement intended to cause such Acquisition Proposal to no longer constitute a Superior Proposal; and we will have considered any Proposed Changed Terms irrevocably committed to by Google no later than 11:59 p.m., New York City time, on the fourth business day of such four business day period and will have determined in good faith (after consultation with our outside legal counsel and outside independent financial advisors) that the Superior Proposal would continue to constitute a Superior Proposal if such Proposed Changed Terms were to be given effect.
If Google, within four business days following its receipt of a Superior Proposal Notice, makes an irrevocable proposal that, as determined in good faith by our Board (after consultation with our outside counsel and outside independent financial advisors), results in the applicable Acquisition Proposal no longer being a Superior Proposal, then we will have no right to terminate the Merger Agreement as a result of such Acquisition Proposal, and any (1) revisions to the financial terms or any other material terms of a Superior Proposal or (2) revisions to the financial terms or any other material terms to an Acquisition Proposal that our Board had determined no longer constitutes a Superior Proposal, will constitute a new Acquisition Proposal and will in each case require us to deliver to Google a new Superior Proposal Notice and a new two business day period will commence thereafter.
“Acquisition Proposal” is defined in the Merger Agreement as any inquiry, offer or proposal (other than an inquiry, offer or proposal made or submitted by or on behalf of Google) related to, or that would reasonably be expected to lead to, an Acquisition Transaction.
“Acquisition Transaction” is defined in the Merger Agreement as any transaction (including any single- or multi-step transaction) or series of transactions with a person or “group” (as defined in Exchange Act) relating to (i) the acquisition of at least 15% of the assets (other than cash and cash equivalents) of, equity interests in, us and our subsidiaries, taken as a whole, pursuant to a merger, reorganization, recapitalization, consolidation, joint venture or other business combination, sale combination, sale of shares of capital stock, sale of assets, tender offer, exchange offer or otherwise, or (ii) any combination of the foregoing types of transactions if the sum of the percentage of our consolidated assets (other than cash and cash equivalents), consolidated revenues or earnings involved is 15% or more.
“Alternative Acquisition Agreement” is defined in the Merger Agreement as any contract (written or oral, binding or non-binding, preliminary or definitive), other than an Acceptable Confidentiality Agreement with any third party constituting or relating to, or that is intended to or would reasonably be expected to lead to or result in, any Acquisition Proposal or Acquisition Transaction, or requiring, or reasonably expected to cause, us to abandon, terminate, delay or fail to consummate, or that would otherwise impede, interfere with or be inconsistent with the Merger Agreement, the Merger or the Transactions, or requiring, or reasonably expected to cause, us to fail to comply with the Merger Agreement.
“Superior Proposal” is defined in the Merger Agreement as a bona fide written Acquisition Proposal (provided that, for purposes of this definition, the references to “15% ” in the definition of Acquisition Transaction will be deemed to be references to “90%”) made by a third party that our Board determines in good faith, after consultation with our outside independent financial advisors and outside legal counsel, and considering all the terms of the Acquisition Proposal (including the legal, financial, financing and regulatory aspects of such proposal, the identity of the third party making such proposal, the conditions for completion of such proposal, and the timing and likelihood of consummation), to be more favorable to the holders of Fitbit Common Stock from a financial point of view than the Merger (after giving effect to all Proposed Changed Terms).
Indemnification and Insurance
The Merger Agreement provides that, from and after the Effective Time, the Surviving Corporation will fulfill and honor in all respects our obligations and those of our subsidiaries pursuant to each indemnification agreement in effect as of November 1, 2019 between us or any of our subsidiaries and any individual who at or prior to the Effective Time is a director or officer of ours or any of our subsidiaries and any indemnification provision and any exculpation provision set forth in our restated certificate of incorporation or our restated bylaws or the certificate of incorporation or bylaws of our subsidiaries are in effect on November 1, 2019.
For six years after the Effective Time, the Surviving Corporation will maintain officers’ and directors’ liability insurance in respect of acts or omissions occurring prior to the Effective Time covering each such person currently covered by our officers’ and directors’ liability insurance policy on terms with respect to coverage and amount no less favorable than those of such policy in effect on November 1, 2019. However, the Surviving Corporation will not be obligated to pay aggregate premiums in excess of 250% of our Current Premium). The officers’ and directors’ liability insurance will be maintained if prepaid “tail” or “runoff”

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policies have been obtained by Google, by us prior to Effective Time or by the Surviving Corporation at or after the Effective Time, which policies provide such directors and officers with coverage for an aggregate period of six years with respect to claims arising from facts or events that occurred on or before the Effective Time, including, in respect of the Transactions. However, the amount paid for such prepaid policies will not exceed 250% of the Current Premium without the prior written consent of Google.
In the event that, within 60 days following November 1, 2019, Google provides written notice requesting that we obtain such tail or runoff policies, then we will obtain and fully pay the premium (in an amount not to exceed 250% of the Current Premium) for such tail or runoff policies at or prior to the Effective Time. Alternatively, if Google confirms to us that Google or the Surviving Corporation will obtain such tail or runoff policies, we will cooperate with Google to arrange for such policies to be so obtained. In the event that Google fails to provide either such written notice within 60 days following November 1, 2019 or, in the event Google confirms it will obtain such policies but fails to do so at least ten business days prior to the Closing, we may, after consulting in good faith with Google, obtain and fully pay the premium (in an amount not to exceed 250% of the Current Premium) for such tail or runoff policies at or prior to the Effective Time.
Employee Benefits
For the one year period immediately following the Effective Time, Google will (or will cause the Surviving Corporation to) provide to each person who is an employee of ours or any of our subsidiaries immediately prior to the Effective Time and who continues to be employed by Google, its subsidiary or the Surviving Corporation (each, a “Continuing Employee”) following the Effective Time, so long as the Continuing Employee remains employed by Google, its subsidiary or the Surviving Corporation, (i) cash compensation (including any retention bonus, stay bonus, bridge bonus or similar cash payment) that is substantially comparable in the aggregate to the cash compensation (excluding any change in control or transaction bonus, retention bonus, spot bonus or similar cash payment) provided to such Continuing Employee as of immediately prior to the Effective Time (provided that a Continuing Employee’s base salary will not be less than 75% of the base salary provided to such Continuing Employee as of November 1, 2019, and provided further that to the extent that such base salary is less than 100% of base salary as of November 1, 2019, such Continuing Employee will receive a retention bonus, a stay bonus, a bridge bonus opportunity or a similar cash payment opportunity, vesting monthly over a period not exceeding twelve months, in an amount no less than such difference in salary), (ii) health and welfare benefits (excluding severance benefits) that are substantially similar to those health and welfare benefits that are provided to similarly situated employees of Google or its subsidiaries, as determined by Google, and (iii) cash severance benefits (other than reimbursement of COBRA continuation costs) that are no less favorable than the cash severance benefits set forth in the confidential disclosure schedules, provided that payment of any such severance benefits will be subject to such Continuing Employee executing a general release of claims on Google’s standard form.
Google will use its commercially reasonable efforts to the extent permitted by the terms of Google’s existing benefit plans and applicable law to ensure that, as of the Closing Date, each Continuing Employee receives credit for service with us (or predecessor employers to the extent we provide such past service credit under our employee plans) for purposes of eligibility to participate, vesting, vacation entitlement and level of severance benefits under each of the comparable employee benefit plans, programs and policies of Google, the Surviving Corporation or the relevant subsidiary, as applicable, in which such Continuing Employee becomes a participant; provided that such recognition of service will not (i) apply for purposes of any equity or equity-based plans (including any entitlement to equity acceleration in connection with retirement), (ii) apply for purposes of any plan that provides retiree welfare benefits, (iii) apply for purposes of benefit accruals or participation eligibility under any defined benefit pension plan or plan providing post-retirement pension plan benefits other than as required by applicable law in non-US jurisdictions, (iv) operate to duplicate any benefits of a Continuing Employee with respect to the same period of service, or (v) apply for purposes of any plan, program or arrangement (A) under which similarly situated employees of Google and its subsidiaries do not receive credit for prior service or (B) that is grandfathered or frozen, either with respect to level of benefits or participation.
With respect to each “employee welfare benefit plan” (as that term is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) that is maintained by Google for the purpose of providing for such plan’s participants or their beneficiaries medical, surgical or hospital care or benefits, the Surviving Corporation or the relevant subsidiary for the benefit of any Continuing Employee, Google will use commercially reasonable efforts to the extent permitted by such plan and applicable law (i) to cause all pre-existing condition exclusions of such plan to be waived for each Continuing Employee and his or her covered dependents, unless and to the extent the individual, immediately prior to entry in such plan, was subject to such conditions under the comparable Fitbit employee plan, and (ii) to cause each Continuing Employee to be given credit under such plan for all amounts paid by such Continuing Employee under any similar Fitbit employee plan for the plan year that includes the Closing Date for purposes of applying deductibles, co-payments and out-of-pocket maximums as though such amounts had been paid

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in accordance with the terms and conditions of the applicable plan maintained by Google, the Surviving Corporation or the relevant subsidiary, as applicable, for the plan year in which the Closing Date occurs, subject to the applicable information being provided to Google in a form that Google reasonably determines in its sole discretion is administratively feasible to take into account under its plans.
Efforts to Close the Merger
Subject to the terms and conditions provided in the Merger Agreement, we and Google have agreed to use reasonable best efforts (i) to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable and regulations to consummate and make effective the transaction contemplated by the Merger Agreement, (ii) to cause all conditions to the obligations of the other parties to the Merger Agreement to effect the Merger to be satisfied, (iii) to obtain all necessary waivers, consents, approvals and other documents required to be delivered and (iv) to effect all necessary registrations and filings and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the Transactions for the purpose of securing to the parties hereto the benefits contemplated by the Merger Agreement, in each case, so that the Closing may occur by no later than the End Date.
However, notwithstanding anything to the contrary, no party will be required to agree (and we will not agree, and will cause our subsidiaries not to agree, without the prior written consent of Google) to (i) any license, sale or other disposition or holding separate (through establishment of a trust or otherwise) of any shares of our capital stock or of any of our businesses, assets or properties, our subsidiaries or affiliates, (ii) the imposition of any limitation on the ability of Google or its affiliates or us or our subsidiaries to conduct our or their respective businesses or own any capital stock or assets or to acquire, hold or exercise full rights of ownership of our or their respective businesses or assets and, in the case of Google, the businesses or assets of us and our subsidiaries or (iii) the imposition of any impediment on Google or its affiliates or us or our subsidiaries under any statute, rule, regulation, executive order, decree, order or other legal restraint governing competition, monopolies or restrictive trade practices (any such action described in (i), (ii) or (iii), an “Action of Divestiture”).
The terms of the Merger Agreement do not require Google or its affiliates, nor permit us or our subsidiaries (without the prior written consent of Google) to litigate with any governmental entity. Additionally, nothing in the Merger Agreement requires Google or its affiliates or permits us or our subsidiaries (without the prior written consent of Google) to pay any consideration or agree to any modifications of existing contracts or enter into new contracts (other than the payment of customary filing and application fees) in connection with obtaining any waivers, consents or approvals from governmental entities or other persons in connection with the Merger Agreement or the Merger. Without limiting any of our obligations under the Merger Agreement, we have agreed to, and to cause our subsidiaries to, agree to such Actions of Divestiture and enter into such contracts as may be requested by Google in connection with obtaining the necessary waivers, consents and approvals to consummate the Merger so long as such Actions of Divestiture and Contracts are conditioned on the occurrence of the Closing having occurred.
In addition, we and Google have agreed to, or will cause their “ultimate Google entities” as that term is defined in the HSR Act, as reasonably advisable, make as promptly as reasonably practicable (and, in any event, solely in the case of any necessary filings and notifications under the HSR Act, within 18 days following November 1, 2019) all necessary filings and notifications and other submissions with respect to the Merger Agreement and the Transactions under the HSR Act, the ECMR, and any other applicable antitrust laws.
Google has agreed to consult with us with respect to filings under the HSR Act, the ECMR and any other applicable antitrust laws, but Google will have the exclusive right to make all strategic and tactical decisions as to the manner in which to obtain from any governmental entity under the HSR Act, the ECMR or any other applicable antitrust laws, any actions or non-actions, consents, approvals, authorizations, clearances or orders required to be obtained by Google or us or any of their respective affiliates in connection with the consummation of the Transactions. In addition, Google and its representatives will have no obligation to share with us, any of our subsidiaries or any of their respective representatives (other than outside antitrust counsel) any nonpublic information, data or materials about any of the businesses or operations of Google and its affiliates and we will not, nor will we permit any of our subsidiaries or representatives to make any communications with, or proposals relating to, or enter into, any understanding, undertaking or agreement with, any governmental entity relating to the Transactions without Google’s prior review and approval.
Special Meeting of Our Stockholders
We have agreed to take all actions necessary in accordance with the DGCL, our Restated Certificate of Incorporation and our Restated Bylaws to duly call, establish a record date for, give notice of, convene and hold a special meeting of our stockholders

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for the purpose of voting upon the adoption of the Merger Agreement as soon as reasonably practicable following the earlier of (1) the 11th day after the date on which the preliminary proxy statement is filed, if the staff of the SEC has not prior to such date informed us that they are reviewing the preliminary proxy statement and (2) the date on which any comments from the SEC or the staff of the SEC with respect to the preliminary proxy statement have been resolved or withdrawn (the earlier of such dates, the “Proxy Clearance Date”) and, in any event, within 30 days following the Proxy Clearance Date. 
We will be able to postpone or adjourn the special meeting following consultation with Google (and our good faith consideration of any comments from Google):
•
if as of the time for which the special meeting is originally scheduled, (A) there are insufficient shares represented (either at the virtual special meeting or by proxy) to constitute a quorum necessary to conduct the business of the special meeting or (B) we have not received proxies sufficient to obtain the Requisite Company Stockholder Approval (such postponement or adjournment to be for no more than five business days and no later than three business days prior to the End Date);
•
to allow time for the filing and dissemination of any supplemental or amended disclosure document that our Board has determined in good faith (after consultation with the our outside legal counsel) is necessary or required to be filed and disseminated under applicable law, our Restated Certificate of Incorporation or our Restated Bylaws; or
•
if we are required to postpone or adjourn the special meeting by applicable law, order or a request from the SEC or its staff (such postponement or adjournment to be for no more than a reasonable amount of time and will be no later than three business days prior to the End Date). 
Without the prior written consent of Google, the adoption of the Merger Agreement will be the only matter (other than matters of procedure and matters required by applicable law to be voted on by our stockholders in connection with the adoption of the Merger Agreement) that we will propose to be acted on by our stockholders at the special meeting. 
Once we have established a record date for the special meeting, such record date will not be changed without the prior written consent of Google (which shall not be unreasonably withheld, conditioned, or delayed) unless required by the DGCL.
Unless the Merger Agreement is terminated, we have agreed that we will establish a record date for, give notice of, convene and hold the special meeting, whether or not our Board at any time after November 1, 2019 has effected a Change in Recommendation or an Acquisition Proposal has been publicly announced or otherwise made known to us, our Board, our representatives or our stockholders.
Other Covenants
The Merger Agreement contains other customary covenants, including covenants relating to:
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providing Google access to our employees, representatives, properties, books, contracts and records that Google reasonable requests (subject to applicable legal restrictions);
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notices of certain events and matters;
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actions necessary if state takeover laws are or become applicable to the Transactions to ensure that the Transactions may be consummated as promptly as practicable;
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delisting our stock from the NYSE;
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control of stockholder litigation relating to the Merger;
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press releases and other public announcements relating to the Merger, the Merger Agreement, or any of the other Transactions;
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the actions necessary to cause the dispositions of certain Fitbit Common Stock and equity-based securities by our officers and directors pursuant to the Merger Agreement to be exempt under Rule 16b-3 promulgated under the Exchange Act; and

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•
obtaining customary third-party consents and payoff letters.
Conditions to the Closing of the Merger
The obligation of Google and us to consummate the Merger is subject to the satisfaction or, to the extent not prohibited by applicable law, waiver of, as of the Closing, of the following conditions:
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the Requisite Company Stockholder Approval must have been obtained;
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all applicable waiting periods (and any extensions thereof) under the HSR Act relating to the consummation of the Merger must have expired or been terminated, the European Commission will have issued a decision under the ECMR declaring the Merger compatible with the common market, and the Specified Foreign Antitrust Approvals must have been obtained (the “Regulatory Authorization Condition”); and
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no court of competent jurisdiction or any governmental entity having jurisdiction over any party to the Merger Agreement will have issued any order, nor will there be in effect any applicable law or other Restraint that makes consummation of the Merger illegal or otherwise prohibited (the “No Injunction Condition”).
The obligation of Google and Merger Sub to consummate the Merger is further subject to the satisfaction, or to the extent not prohibited by applicable law, waiver of, as of the Closing, of each of the following conditions:
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our representations and warranties relating to our capital structure must be true and correct in all respects as of November 1, 2019 and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties will be so true and correct as of such specific date only), except for failures to be true and correct that, individually or in the aggregate, are de minimis;
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our representations and warranties relating to corporate organization, corporate authority relative to the Merger Agreement, no violation of our corporate organizational documents and the opinion of our financial advisor, to the extent qualified by materiality or “Company Material Adverse Effect,” must be true and correct in all respects, and to the extent not qualified by materiality or “Company Material Adverse Effect,” will be true and correct in all material respects, in each case, as of November 1, 2019 and as of the Closing Date as if made on and as of such date (except, in each case, to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties will be so true and correct as of such specific date only);
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our representations and warranties relating to the absence of a Company Material Adverse Effect since December 31, 2018 must be true and correct in all respects as of November 1, 2019 and as of the Closing Date as though made on and as of such date;
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all of our other representations and warranties in the Merger Agreement, without giving effect to any materiality or “Company Material Adverse Effect” qualifications therein, must be true and correct as of November 1, 2019 and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties will be so true and correct as of such specific date only), except for failures to be true and correct that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
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we must have performed and complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by us at or prior to the Closing; and
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Google must have received a certificate signed on behalf of Fitbit by one of our executive officers as to the satisfaction of the conditions in the bullet points above.
Our obligation to consummate the Merger will be further subject to the satisfaction, or to the extent not prohibited by applicable law, waiver of, as of the Closing each of the following conditions:
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each of the representations and warranties of Google and Merger Sub in the Merger Agreement, without giving effect to any materiality qualifications therein, must be true and correct as of November 1, 2019 and as of the Closing Date

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as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties will be so true and correct as of such specific date only), except for failures to be true and correct that would not, individually or in the aggregate, prevent or have a material adverse effect on the ability of Google or Merger Sub to consummate the Merger;
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Google and Merger Sub must have performed and complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by it at or prior to the Closing; and
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we must have received a certificate signed on behalf of Google by an executive officer of Google as to the satisfaction of the conditions in the bullet points above.