MKTO Marketo, Inc. (MM)

Other Matters

        At this time, we know of no other matters to be voted on at the Special Meeting. If any other matters properly come before the Special Meeting, your shares of common stock will be voted in accordance with the discretion of the appointed proxy holders.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on [ · ], 2016

        The proxy statement is available at http://investors.marketo.com.

Householding of Special Meeting Materials

        Unless we have received contrary instructions, we may send a single copy of this proxy statement to any household at which two or more stockholders reside if we believe the stockholders are members of the same family. Each stockholder in the household will continue to receive a separate proxy card. This process, known as "householding," reduces the volume of duplicate information received at your household and helps to reduce our expenses.

        If you would like to receive your own set of our disclosure documents this year or in future years, please contact us using the instructions set forth below. Similarly, if you share an address with another stockholder and together both of you would like to receive only a single set of our disclosure documents, please contact us using the instructions set forth below.

        If you are a stockholder of record, you may contact us by writing to Marketo's Investor Relations at 901 Mariners Island Blvd., Suite 500, San Mateo, CA 94404. Eligible stockholders of record receiving multiple copies of this proxy statement can request householding by contacting us in the same manner. If a bank, broker or other nominee holds your shares, please contact your bank, broker or other nominee directly.

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Questions and Additional Information

        If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Call toll-free: (888) 750-5834

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THE MERGER

        This discussion of the Merger 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 carefully read and consider the entire Merger Agreement, which is the legal document that governs the Merger, because this document contains important information about the Merger and how it affects you.

Parties Involved in the Merger

Marketo, Inc.
901 Mariners Island Blvd., Suite 500
San Mateo, CA 94404

        Marketo is the provider of a leading cloud-based Engagement Marketing Platform that is purpose-built to enable organizations ranging from small and medium businesses to the world's largest enterprises to engage in modern relationship marketing. Marketo's platform enables the effective execution, management and analytical measurement of online, social, mobile and offline marketing activities and customer interactions in today's data-centric, multi-channel business environment. Headquartered in San Mateo, CA, with offices around the world, Marketo serves as a strategic partner to large enterprise and fast-growing small companies across a wide variety of industries.

        Marketo's common stock is listed on the NASDAQ, under the symbol "MKTO."

Milestone Holdco, LLC
c/o Vista Equity Partners Management, LLC
Four Embarcadero Center, 20th Floor
San Francisco, CA 94111

         Parent was formed on May 25, 2016, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement and arranging of the equity financing and any debt financing in connection with the Merger.

Milestone Merger Sub, Inc.
c/o Vista Equity Partners Management, LLC
Four Embarcadero Center, 20th Floor
San Francisco, CA 94111

         Merger Sub is a wholly owned direct subsidiary of Parent and was formed on May 25, 2016, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement and arranging of the equity financing and any debt financing in connection with the Merger.

         Parent and Merger Sub are each affiliated with Vista Equity Partners Fund VI, L.P., and Parent, Merger Sub and Vista Fund VI are each affiliated with Vista. Vista is a leading private equity firm focused on investments in software, data and technology-enabled companies. At the Effective Time, Marketo, as the Surviving Corporation, will be indirectly owned by Vista Fund VI.

        In connection with the transactions contemplated by the Merger Agreement, Vista Fund VI has provided Parent with an equity commitment of up to approximately $1.79 billion in cash, which will be available to fund the aggregate purchase price and the other payments contemplated by, and subject to the terms and conditions of, the Merger Agreement. For more information, please see the section of this proxy statement captioned, "The Merger—Financing of the Merger."

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Effect of the Merger

        Upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into Marketo, with Marketo continuing as the Surviving Corporation. As a result of the Merger, Marketo will become a wholly owned direct subsidiary of Parent, and our common stock will no longer be publicly traded and will be delisted from the NASDAQ. In addition, our 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 we, Parent and Merger Sub may agree and specify in the certificate of merger).

Effect on Marketo 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:

(i)

the stockholders will not be entitled to, nor will they receive, any payment for their respective shares of common stock pursuant to the Merger Agreement;



(ii)

(A) Marketo will remain an independent public company, (B) Marketo's common stock will continue to be listed and traded on the NASDAQ and registered under the Exchange Act, and (C) Marketo will continue to file periodic reports with the SEC;



(iii)

we anticipate that (A) management will operate the business in a manner similar to that in which it is being operated today and (B) stockholders will be subject to similar types of risks and uncertainties as those to which they are currently subject, including, but not limited to, risks and uncertainties with respect Marketo's business, prospects or results of operations, as such may be affected by, among other things, the highly competitive industry in which Marketo operates and adverse economic conditions;



(iv)

the price of our common stock may decline significantly, and if that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement;



(v)

the Board of Directors will continue to evaluate and review Marketo's business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate (irrespective of these efforts, it is possible that no other transaction acceptable to the Board of Directors will be offered or that Marketo's business, prospects or results of operations will be adversely impacted); and,



(vi)

under certain specified conditions, Marketo will be required to pay Parent a termination fee of $49.2 million upon the termination of the Merger Agreement. For more information, please see the section of this proxy statement captioned, "Proposal 1: Adoption of the Merger Agreement—Termination Fee."

Merger Consideration

        At the Effective Time, and without any action required by any stockholder, each share of common stock (other than Excluded Shares, which include, for example, shares of common stock owned by stockholders who have properly and validly exercised their statutory rights of appraisal in accordance with Section 262 of the DGCL) outstanding as of immediately prior to the Effective Time will be cancelled and extinguished, and automatically converted into the right to receive the Per Share Merger Consideration, without interest thereon and less any applicable withholding taxes.

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        After the Merger is completed, you will have the right to receive the Per Share Merger Consideration in respect of each share of common stock that you own (less any applicable withholding taxes), but you will no longer have any rights as a stockholder (except that stockholders who properly exercise their appraisal rights will have a right to receive payment of the "fair value" of their shares as determined pursuant to an appraisal proceeding, as contemplated by Delaware law). For more information, please see the section of this proxy statement captioned, "The Merger—Appraisal Rights."

Background of the Merger

        The Board of Directors regularly evaluates Marketo's strategic direction, ongoing business plans and prospects with a view toward enhancing stockholder value. As part of this evaluation, the Board of Directors has from time to time considered a variety of strategic alternatives for Marketo, including (i) the continuation of Marketo's business plan as an independent enterprise; (ii) modifications to Marketo's strategy and product direction; (iii) potential expansion opportunities into new business lines through acquisitions and combinations of Marketo with other businesses; and (iv) a possible sale of Marketo.

        During March and April 2016, Phillip Fernandez, the Chief Executive Officer and Chairman of Marketo, and Brian Kinion, the Chief Financial Officer of Marketo, met with representatives of Morgan Stanley to discuss generally Marketo's business and future opportunities for strategic growth and partnership building with other participants in its industry, as well as certain transactions in the SaaS space which had relevant implications for Marketo. During these conversations, representatives of Morgan Stanley discussed the possibility of introducing Marketo to third parties who might have interest in exploring commercial partnerships or other strategic relationships with Marketo and Mr. Fernandez generally supported this in concept.

        Morgan Stanley arranged several of these meetings in April 2016. On April 13, 2016, a representative of Morgan Stanley introduced Mr. Fernandez to a representative of a strategic party, which we refer to as "Party A". During their meeting, Party A and Marketo discussed the existing commercial relationship between Party A and Marketo and opportunities to strengthen that relationship through additional collaboration. On April 18, 2016, a representative of Morgan Stanley had a telephone conversation with a representative of a second strategic party, which we refer to as "Party B". During the discussion, the representative of Morgan Stanley and the representative of Party B discussed, among other things, the existing commercial relationship between Party B and Marketo and other potential opportunities for the parties to work together. On April 21, 2016, a representative of Morgan Stanley communicated with a representative of a third strategic party, which we refer to as "Party C", to inquire about Party C's interest in establishing a business partnership with Marketo to integrate certain of their respective products more closely. The representative of Party C requested a follow-up meeting or a telephone conversation with Marketo to further evaluate the possibility and merits of doing so. During each of the meetings with Part A, Party B and Party C, no proposals were made by any party nor were there any discussions regarding a potential acquisition of Marketo.

        In addition to these meetings arranged by Morgan Stanley, from time to time Mr. Fernandez also had meetings and conversations with representatives of various private equity funds with investments in SaaS companies and general interest and expertise in the SaaS industry. Along these lines and at the request of Vista, on April 27, 2016, Mr. Fernandez met with representatives of Vista to discuss standardizing Vista's portfolio companies on the Marketo platform. During the course of this meeting, the representatives of Vista expressed Vista's interest in acquiring Marketo and suggested that the premium in such an acquisition may be comparable to that of Vista's recent acquisitions, including its recently announced agreement to acquire Cvent, Inc., but Vista made no specific proposal at such time.

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        On April 27, 2016, Mr. Fernandez, Mr. Kinion, and Fred Ball, the Executive Vice President and Chief Administrative Officer of Marketo, had a meeting with representatives of a financial sponsor, which we refer to as "Party D", to discuss developments in the SaaS industry. During these discussions, Mr. Fernandez and the representatives of Party D discussed Marketo's business, its industry and the opportunities for collaboration between the parties. Party D expressed an interest in continuing to discuss with Marketo opportunities on which the parties could work together more seriously but did not indicate an interest in acquiring Marketo at such time.

        On April 28, 2016, Mr. Fernandez communicated by email to the Board of Directors to inform them of his discussion with representatives of Vista regarding Vista's interest in acquiring Marketo. A special meeting of the Board of Directors was scheduled to discuss Vista's expression of interest.

        On May 1, 2016, the Board of Directors held a special meeting with members of Marketo management and a representative of Wilson Sonsini Goodrich & Rosati P.C. ("Wilson Sonsini"), outside legal counsel to Marketo. Mr. Fernandez apprised the Board of his recent meeting with Vista in which Vista had expressed potential interest in acquiring Marketo and had suggested that the premium in such an acquisition may be comparable to that of Vista's recent acquisitions, including its recently announced agreement to acquire Cvent, Inc., which the Board of the Directors interpreted to suggest that Vista was signaling a price per share in the "mid-$30s" for a potential acquisition of Marketo. Mr. Fernandez also apprised the Board of his other meetings throughout April and the feedback he had received from the parties with whom had had met. Messrs. Fernandez and Ball then provided the Board of Directors with a general update on Marketo's business performance and outlook for the near term, including Marketo's recent financial results, Marketo's current financial guidance to investors and "sell-side" analysts, the general financial outlook for the quarter and the full year, and the status of new product development, as well as the status of key customers and the status of Marketo's sales transition. A representative from Wilson Sonsini then discussed with the Board of Directors their fiduciary duties in the context of strategic transactions, including at the preliminary stages of evaluating an acquisition proposal. The Board of Directors also discussed the potential engagement of investment banks to, among other things, assist Marketo in assessing its long-term stand-alone value, evaluating offers for a strategic transaction, evaluating the merits of engaging in discussions with others potentially interested in a strategic transaction, and providing other customary assistance in connection with a potential transaction. The Board of Directors discussed the potential benefits of forming a transaction committee of the Board of Directors to manage the strategic review process and potential sale of Marketo. After these discussions, management left the meeting and the Board of Directors met in an executive session with a representative of Wilson Sonsini. While in executive session, the Board of Directors discussed the engagement of a qualified financial advisor to assist Marketo and the Board of Directors with its evaluation of any indications of interest received by Marketo and the related strategic review process. Following the discussion, the Board of Directors authorized Marketo's management to begin discussions with Morgan Stanley to serve in this capacity and to direct Morgan Stanley to contact Vista to discuss the seriousness of its expression of interest in a potential acquisition of Marketo. Morgan Stanley was selected based on Morgan Stanley's qualifications, expertise and reputation, its knowledge of and involvement in recent transactions in the SaaS industry, and its knowledge and understanding of Marketo's business and affairs. The Board of Directors then engaged in a further discussion of the merits of forming a transaction committee in connection with the Board's evaluation of transaction proposals and the related strategic process, and determined to form the Transaction Committee of the Board of Directors (the "Transaction Committee") to supervise the overall process and ensure active board involvement in strategic decisions throughout. Independent directors Roger Siboni, Tae Hea Nahm and Cammie Dunaway were selected to serve on the Transaction Committee. Mr. Siboni was selected to serve as Chairman of the Transaction Committee.

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        On May 2, 2016, members of Marketo's management had a telephone call with representatives of Morgan Stanley to discuss Vista's expression of interest and the related strategic process. During this call, Marketo management directed Morgan Stanley to contact Vista to determine the seriousness of its expression of interest in a potential acquisition of Marketo.

        On May 3, 2016, a representative of Morgan Stanley had a telephone conversation with representatives of Vista to gauge the strength of Vista's interest in an acquisition of Marketo. Vista provided an initial verbal indication of interest of "low-$30s" per share. Morgan Stanley advised Vista that the Board of Directors was not likely to have interest in a sale at that price and advised that Vista's proposal would likely need to be in the "mid-$30s" per share in cash in order to interest the Board of Directors in further discussions, given the Board of Directors prior interpretation of Vista's suggestion that a potential transaction may be at a premium comparable to that of Vista's recent transactions.

        On May 6, 2016, a representative of Morgan Stanley had a meeting with a representative of a strategic party, which we refer to as "Party E", which had previously been scheduled by Morgan Stanley and Party E prior to the Board of Directors' evaluation of a potential strategic transaction. Following a general discussion on several topics unrelated to Marketo, Morgan Stanley, on the prior advice of Marekto's management, raised Marketo with Party E and inquired into Party E's interest in an acquisition of Marketo. The representative of Party E indicated that it was familiar with Marketo and its business, but that an acquisition of Marketo was not a strategic priority for Party E at the time.

        On May 8, 2016, the Board of Directors held a special meeting with members of Marketo's management and representatives of Morgan Stanley and Wilson Sonsini. At the meeting, Mr. Fernandez and Morgan Stanley provided an update regarding their recent discussions with Vista, Party A, Party B, Party C, Party D and Party E. Morgan Stanley also presented a list of additional parties that it believed might have strategic interest in a potential acquisition of Marketo. The Board of Directors discussed each of the listed parties and the likely interest of each in Marketo. Representatives of Morgan Stanley then left the meeting, and the Board of Directors met in executive session with members of management and Wilson Sonsini to discuss the proposed engagement of Morgan Stanley as Marketo's financial advisor. As part of this discussion, management outlined the material terms of the proposed engagement of Morgan Stanley, and Wilson Sonsini reviewed disclosure related to relationships between Vista and Morgan Stanley provided by Morgan Stanley prior to the meeting and noted that Morgan Stanley carried out its customary conflicts-related clearance procedures. Following this report, the Board of Directors authorized management to engage Morgan Stanley as Marketo's financial advisor on the terms presented. Members of Marketo's management then reviewed the two sets of long-term financial projections that management had prepared in the ordinary course and that would be provided to Morgan Stanley to conduct its financial analysis, the Higher Growth Case and the Leveraged Growth Case (Base Case), respectively (as more fully described below under the caption "The Merger—Marketo's Financial Projections"). The Board of Directors approved each of the Higher Growth Case and the Leveraged Growth Case for use by Morgan Stanley to conduct its financial analysis but directed Marketo's management and Morgan Stanley to provide only the Leveraged Growth Case to parties for the purposes of due diligence because the Board of Directors believed that the Leveraged Growth Case was more representative of Marketo's recent performance, growth and focus. All members of management then left the meeting, and the Board of Directors held an executive session with the representative of Wilson Sonsini. In this session, the Board of Directors discussed various strategies for maximizing stockholder value in a strategic process, including the scope of any market check, and determined to revisit the scope of the market check as the process evolved. During this executive session, the Board of Directors also discussed the importance of maintaining the objectiveness of management throughout the strategic process and agreed to instruct management to refrain from engaging in any discussions regarding their continuing employment or re-investment in Marketo without Board approval prior to the signing of any potential transaction.

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        Later in the day on May 8, 2016, Mr. Fernandez met with a representative of Party A to discuss the existing commercial relationship between Marketo and Party A, opportunities to strengthen that relationship, and, more generally, the strategic landscape and positioning in the marketing software space. Party A did not make any proposals regarding a potential transaction during this meeting.

        On May 10, 2016, news outlets reported that Marketo was working with Morgan Stanley on a strategic review process. Subsequent to this rumor, a number of parties contacted each of Marketo and Morgan Stanley.

        On May 10, 2016, a representative of Morgan Stanley had an initial telephone discussion with a representative of a financial sponsor, which we refer to as "Party F". During the discussions, Party F expressed strong interest in exploring a potential acquisition of Marketo and requested a meeting with Marketo's management team. Marketo granted its request, negotiated a non-disclosure agreement with Party F, and scheduled a management meeting, which was held on May 15, 2016.

        On May 12, 2016, a representative of Party A contacted Morgan Stanley to convey that it had seen the press rumors and that it was not likely that Marketo would be a strategic priority for Party A at the time.

        On May 12, 2016, a representative of Vista called Morgan Stanley and verbally communicated a revised proposal to acquire Marketo at a price of $34.00 - $35.00 per share in cash, and indicated that it hoped to arrive at a final proposal at the high end of that range following its due diligence review. Vista further noted that it did not anticipate requiring an extensive due diligence process. Vista sent a written indication of interest the following day reflecting the proposal along with a request that Marketo enter into exclusive negotiations with Vista. In its written indication of interest, Vista indicated that its proposal was contingent on completion of confirmatory due diligence (which it expected to be complete in 10 to 17 days) and was not contingent on arranging third party debt financing, which indicated that Vista was prepared to move quickly to reach a definitive agreement. Following receipt of Vista's proposal, Marketo negotiated a non-disclosure agreement with Vista and scheduled a management presentation with Vista's team, which was held on May 16, 2016.

        On May 13, 2016, Mr. Fernandez and representatives of Party D held a follow-up meeting during which they discussed a potential acquisition of Marketo by Party D. Party D requested a meeting with Marketo's broader management team. Marketo subsequently negotiated a non-disclosure agreement with Party D, and on May 13, 2016, Party D communicated to Morgan Stanley that Party D had an initial view on Marketo's valuation in the "high-$20s" per share. Morgan Stanley advised Party D that the Board of Directors would likely consider any proposal at that price to be insufficient and suggested that Party D would need to make a proposal in the "mid-$30s" per share in order to interest the Board of Directors in further discussions and be competitive with other interested parties.

        On May 14, 2016, the Transaction Committee held a special meeting with members of Marketo's management and representatives of Morgan Stanley and Wilson Sonsini. At the meeting, the Transaction Committee discussed, among other things, Vista's indication of interest and the status of discussion with all the parties that management and Morgan Stanley had contacted as part of the company's ongoing strategic process. Morgan Stanley gave its preliminary financial view on Vista's revised proposal to acquire Marketo for a price of $34.00 - $35.00 per share and potential responses to Vista's proposal. Morgan Stanley presented its preliminary financial analysis of Marketo and indicated that its analysis was ongoing. Morgan Stanley discussed with the Board of Directors the two sets of financial projections that management had prepared and provided to Morgan Stanley to conduct its financial analysis, the Higher Growth Case and the Leveraged Growth Case (Base Case), respectively. The Transaction Committee instructed Morgan Stanley to conduct its financial analysis on the basis of both sets of projections. The representatives of Wilson Sonsini then discussed with the Transaction Committee its fiduciary duties in the context of an acquisition transaction, including the various methods by which the Board of Directors can fulfil its duty to maximize stockholder value, as well as

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the fact that the news media speculations regarding a sales process was likely serving as a passive market check for Marketo and could supplement the existing process. The Transaction Committee then engaged in a discussion regarding Vista's request for exclusivity and concluded that entering into exclusivity with any party would be premature at this time. The Transaction Committee discussed various strategies and methods by which the Board of Directors might seek to maximize stockholder value. Among the topics discussed by the Transaction Committee were: (i) the parameters of engagement with Vista and Vista's desire to move quickly to a negotiated agreement; (ii) the ability of other parties to conduct due diligence on a competitive timeline; (iii) ability to maintain competitive tension between Vista and the other parties; (iv) recent transaction history of Vista; and (v) the likely level of interest by both parties already part of the solicitation process and other potential parties that had not yet been contacted. Following this discussion, the Transaction Committee then held an executive session without Morgan Stanley where the committee further discussed the parameters of the market check process. The Transaction Committee then held a second executive session without members of management during which the committee discussed the potential for management conflicts of interest due to the presence of private equity sponsors and determined that, though they were unaware of any actual conflicts at such time, the Transaction Committee members would assume an active role in overseeing the market check process on behalf of the Board of Directors.

        On May 15, 2016, the Board of Directors held a special meeting with members of Marketo management and representatives of Morgan Stanley and Wilson Sonsini. Wilson Sonsini addressed the Board of Directors' fiduciary duties in connection with a possible sale of Marketo and reviewed relevant legal issues implicated by a potential sale of Marketo. Morgan Stanley provided an update on the status of discussions with all parties contacted during the market check process. The Board of Directors then discussed again with Morgan Stanley other third parties that could reasonably be expected to have strategic interest in acquiring Marketo and the financial capability to do so, as well as the potential strategies for engaging those parties in a discussion regarding a potential acquisition of Marketo. The Board of Directors also discussed with Morgan Stanley the risks and challenges that a broad market check could present, including the potential for additional leaks regarding a transaction and the downside of outreach to certain parties that are competitors that may seek access to Marketo's information for competitive purposes or that may leverage the uncertainty of a potential transaction in competing against Marketo in commercial opportunities. Representatives of Morgan Stanley and Wilson Sonsini also discussed the fact that, if the termination fees in a negotiated merger agreement were sufficiently low, other bidders would have the opportunity and ability to offer to acquire Marketo, subject to the payment of such termination fee, at a higher price even after Marketo signed a definitive agreement with another buyer. Representatives of Morgan Stanley and Wilson Sonsini further noted that, in light of the press rumors, strategically interested parties who were not contacted would likely contact Marketo or Morgan Stanley if they did have interest in acquiring Marketo. The Board of Directors discussed the benefits, on balance, of engaging with Vista on its requested accelerated timeline versus giving other interested parties sufficient time to consider making an acquisition proposal. After discussion, the Board of Directors directed Morgan Stanley to re-engage with Party A, Party B, Party C and Party E with an indication that time was of the essence and suggesting that they put forth an attractive proposal if they remained interested in a transaction with Marketo and wished to remain competitive in the solicitation process. The Board of Directors further directed Morgan Stanley to continue to engage Vista, Party D and Party F in discussions in an attempt to obtain a higher offer price from each of them. The Board of Directors then moved to an executive session without representatives of Morgan Stanley, where the Board of Directors further discussed whether or not to run a broad based solicitation process and which other potential bidders may have an interest in acquiring Marketo. The Board of Directors discussed the desirability of reaching out to a certain strategic party, which we refer to as "Party G", to gauge interest in a potential transaction with Marketo and requested that Marketo's management direct Morgan Stanley to contact Party G. Marketo's management also provided the Board of Directors with a general update on Marketo's

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business, including discussing the general outlook for the quarter and the year, and product, customer and partner matters. All members of management then left the meeting, and the Board of Directors met in an executive session with the representatives of Wilson Sonsini. During this portion of the meeting, the Board of Directors further discussed other third parties that may potentially be interested in acquiring Marketo and the general approach being taken in the market check process.

        Following the Board of Directors meeting, on May 15, 2016, Marketo and Morgan Stanley formally finalized the engagement with Morgan Stanley by executing an engagement letter.

        On May 16, 2016, a representative of Morgan Stanley communicated with a representative of a Party G to inquire if Party G was interested in a potential acquisition with Marketo. Party G indicated they were not interested in pursuing an acquisition at such time.

        On May 17, 2016, a representative of Morgan Stanley had a telephone conversation with a representative of Party C regarding Marketo. Party C did not provide an indication as to their level of interest at that time.

        On May 17, 2016, in response to earlier discussions, Party B communicated to Morgan Stanley that it had interest in exploring a potential transaction with Marketo and requested a meeting with management to discuss a potential transaction between the two companies. Marketo negotiated a non-disclosure agreement with Party B and scheduled a management presentation with it, which was held on May 20, 2016.

        On May 18, 2016, representatives of Marketo and representatives of Party F had a follow-up telephone call to further discuss Party F's financial due diligence questions regarding a potential transaction. Party F noted to Morgan Stanley that it was interested in further considering the opportunity, though it was not clear they would be competitive on price.

        On May 18, 2016, Marketo management and representatives of Morgan Stanley met with representatives of Party D to provide further due diligence and further discuss Marketo's business, operations and strategy. Party D indicated that they had a high level of interest in acquiring Marketo for cash and were trying to support internally getting to the "mid-$30s".

        On May 20, 2016, a representative of a strategic party, which we refer to as "Party H", made an unsolicited inquiry to a representative of Morgan Stanley, requesting participation in Marketo's strategic process based on press reports that Marketo was conducting one. Neither Marketo nor representatives of Morgan Stanley had previously contacted Party H to gauge Party H's interest in exploring a potential acquisition of Marketo because Party H was a competitor of Marketo and because Marketo believed that if Party H had interest in a potential acquisition of Marketo, Party H would make an in-bound inquiry following press reports speculating about Marketo's strategic process. Upon receipt of Party H's request to participate in the process, Marketo promptly granted its request, negotiated a non-disclosure agreement and scheduled a management presentation, which was held on May 23, 2016.

        On May 20, 2016, a representative of Party A communicated to a representative of Morgan Stanley that Party A had completed its internal assessment of a potential acquisition of Marketo, and that Party A would not be pursuing an acquisition of Marketo at such time.

        On May 21, 2016, the Transaction Committee held a special meeting with members of Marketo's management and representatives of Morgan Stanley and Wilson Sonsini. At the meeting, Marketo's management provided the Transaction Committee with a general update on Marketo's business and product, customer and partner matters. At the meeting, Morgan Stanley updated the Transaction Committee regarding the acquisition proposals that Marketo had received and on the status of discussions with the other potential bidders. Morgan Stanley advised that (i) it may be possible, as part of the negotiation process, to get Vista to increase its offer price above its previously proposed range of

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$34.00-$35.00 per share, but that any such increase would likely be only incrementally higher based on statements Vista had made in recent discussions; (ii) that Party D was contemplating, based on its due diligence, increasing its proposed offer price above the previously offered valuation of the "high-$20s" per share; and (iii) that it was sensing weakness from Party F regarding the price it was prepared to offer for Marketo. The Transaction Committee considered requests by each of Vista and Party D for Marketo to approve certain financing sources to receive confidential information under the non-disclosure between Marketo and Vista and Party D, respectively. The Transaction Committee approved each request, after considering the risks associated with such approval, including further leaks regarding the potential for a transaction involving Marketo. The representatives of Morgan Stanley provided the Transaction Committee with an update to its preliminary financial analysis of a potential transaction. Following this update and discussion, representatives of Morgan Stanley left the meeting, and the Transaction Committee met in an executive session with members of management and the representatives of Wilson Sonsini. Members of management provided the Transaction Committee with an update on the status of management meetings and follow-up diligence with the Vista, Party D, and the other potential bidders. Subsequently, all members of management left the meeting, and the Transaction Committee met in executive session with the members of Wilson Sonsini.

        On May 23, 2016, Party F called Morgan Stanley to inform Morgan Stanley that, as a result of Party F's due diligence, Party F was arriving at a valuation of Marketo that implied a purchase price in the "low-$30s" per share. Morgan Stanley advised Party F that in order to be of interest to the Board of Directors, Party F would need to propose a price in the "mid-$30s" per share in cash. The representative of Party F indicated that they were unlikely to make a proposal at that price level. Later that day, the representative of Party F communicated to Morgan Stanley that Party F was not likely to pursue an acquisition of Marketo at such time given the valuation expectations.

        On May 23, 2016, Marketo received a written indication of interest from Party D to acquire Marketo for $34.00 per share in cash. In its indication of interest, Party D indicated that it had committed to provide equity financing for the aggregate purchase price. Party's D proposal requested that Marketo engage with Party D on an exclusive basis and was contingent on the completion of both business and legal due diligence. Party D indicated that it expected to complete due diligence within one week. Party D's proposal was accompanied by a draft of a merger agreement and drafts of an equity commitment letter and other ancillary documents.

        On May 23, 2016, Mr. Fernandez had a telephone conversation with a representative of Party C to discuss Marketo's business, operations and strategy and potential synergy opportunities if the two companies combined. Party C specifically asked Mr. Fernandez what an expected purchase price for Marketo might be, to which Mr. Fernandez recommended that Party C discuss that topic with Morgan Stanley. Following the call, Morgan Stanley attempted on multiple occasions to contact Party C to gauge Party C's continued interest in a potential transaction with Marketo, but Morgan Stanley did not receive response from Party C. Morgan Stanley advised it believed that that the lack of a response from Party C was an indication that Party C was not interested in pursuing a transaction with Marketo at such time.

        On May 24, 2016, Vista submitted a revised proposal to acquire Marketo for $34.50 per share in cash, and also delivered a draft of a merger agreement, together with drafts of ancillary transaction documents, including an equity commitment letter and a limited guaranty. Vista's proposal indicated, subject to agreeing on the definitive documents, that (i) Vista would provide an equity commitment for the entire purchase price, (ii) Vista's potential liability would be limited to 6.5% of the equity value of Marketo, or approximately $116.3 million and (iii) Vista was prepared to pursue a transaction expeditiously. Vista further noted that its offer would expire at 5:00 p.m. Pacific time on May 25, 2016 if Marketo did not sign an exclusivity agreement with Vista.

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        On May 24, 2016, Morgan Stanley had a follow-up telephone conversation with Party E to discuss Party E's interest in potentially acquiring Marketo. Party E indicated that it was completing its internal review on the potential for a transaction. Morgan Stanley communicated to Party E that Party E would need to make a decision quickly regarding whether to submit an offer to acquire Marketo.

        On the morning of May 25, 2016, the Transaction Committee held a special meeting with members of Marketo management and representatives of Morgan Stanley and Wilson Sonsini in attendance. At the meeting, representatives of Morgan Stanley updated the Transaction Committee on the proposed indications of interest that Marketo had received and advised the Transaction Committee that (i) they believed both Vista and Party D may have room to increase their offers above $34.50 and $34.00, respectively, but in each case likely not enough room to get a purchase price in the "high-$30s" per share; (ii) Vista would be prepared to enter into a definitive agreement as early as May 27, 2016, and (iii) Party D was modestly behind on due diligence and would require an additional week of due diligence before it was ready to enter a definitive agreement. Morgan Stanley also updated the Transaction Committee on the status of discussions with Party H. Morgan Stanley updated the Transaction Committee on the proposed indication of interest received from Party F, noting that Party F's valuation in the "low-$30s" per share was not competitive with the offers received from Vista and Party D. The Transaction Committee discussed the merits of entering into exclusive negotiations with either Vista or Party D. Morgan Stanley indicated that it believed that the request for exclusivity from whichever party ultimately prevailed with the highest bid was an important requirement of such party's proposal. The Transaction Committee discussed the possibility of entering into exclusivity with either party on a modified basis, such that the exclusivity would only apply with respect to Vista and Party D as against the other party, and would permit the other participants in the process more time to complete their evaluation. The Transaction Committee requested further information on the differences in contract terms between the offers from Vista and Party D. The Transaction Committee discussed the nature of performing a further market check and the importance of ensuring the winning bid included a termination fee sufficiently low to not preclude third-parties from offering a higher price after an initial deal is announced. Representatives of Morgan Stanley then left the meeting, and the Transaction Committee met in executive session with members of management and Wilson Sonsini. The Transaction Committee continued to discuss the status of the solicitation process. Following this discussion, all members of management left the meeting, and the Transaction Committee met in an executive session with the representatives of Wilson Sonsini.

        On May 25, 2016, Vista held a series of follow-up calls with Marketo management to complete confirmatory due diligence.

        On May 25, 2016, the Board of Directors held a special meeting with members of Marketo management and representatives of Morgan Stanley and Wilson Sonsini in attendance. At the meeting, a representative of Morgan Stanley updated the Board of Directors on (i) the proposed indications of interest that Marketo had received from Vista and Party D and (ii) the status of discussions with Party H. Morgan Stanley gave the Board of Directors an overview Party D's indication of interest, including Party's D revised bid of $34.00 per share, and an update on Party D's due diligence, noting that Party D was further behind Vista on due diligence but was holding management meetings later in the day to discuss remaining due diligence. Morgan Stanley then reviewed Vista's revised offer of $34.50 in cash and its request to enter into exclusivity. The Board of Directors discussed the status of Marketo's market check with potential strategic parties and the benefits, on balance, of continuing to reach out to other third parties that potentially may be interested in acquiring Marketo. The representatives of Morgan Stanley and Wilson Sonsini reviewed with the Board of Directors the relative strengths of each of Vista and Party D's proposed indications of interest, as well as the strategy of using a proposal for limited exclusivity to obtain higher offers from Vista and Party D. Morgan Stanley then reviewed its preliminary financial analysis of Marketo and the proposed indications of interest. Representatives of Morgan Stanley then left the meeting, and the Board of Directors met in executive session with

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members of management and Wilson Sonsini. The Board of Directors further discussed the status of discussions Party H and any other potential strategic buyers. Following this discussion, all members of management left the meeting, and the Board of Directors met in an executive session with the representatives of Wilson Sonsini. The Board of Directors further discussed the proposed offers received from Vista and Party D. The Board of Directors authorized Morgan Stanley to contact Vista and Party D immediately to request that both Vista and Party D submit their respective final offers and to contact Party H to inform them that timing is of the essence and that Party H should indicate its interest in the near future as other parties were exerting significant timing pressure on Marketo, including requests for exclusivity.

        On May 25, 2016, Marketo management and representatives of Morgan Stanley met with representatives of Party D to discuss Party D's bid and to help Party D solidify its view on valuation.

        Later in the day on May 25, 2016, a representative of Morgan Stanley asked each of Vista and Party D to submit its "best and final offer" by end of the day and the party that submitted the higher bid would get limited exclusivity relative to the other bidder. The Morgan Stanley representative encouraged each of Vista and Party D to increase their respective bids to $36.00 per share.

        On May 25, 2016, a representative of Party B communicated to a representative of Morgan Stanley that although it continued to have interest in the sector, it did not plan to pursue an acquisition of Marketo at such time.

        On May 25, 2016, a representative of Party H communicated to a representative of Morgan Stanley that it remained interested in a potential acquisition of Marketo and that it continued to discuss internally how the Marketo business would fit with Party H's existing business.

        Later in the day on May 25, 2016, Marketo received final bids from Vista and Party D. Vista submitted a revised bid of $35.25 per share and requested that Marketo enter into exclusive negotiations with Vista. Party D's revised bid was at $35.05 per share. In its revised bid, Party D re-indicated that its bid was contingent on completing confirmatory due diligence, which it expected it could complete in one week. Party D also requested additional further access to and meetings with Marketo management to finalize its operational plan.

        Later in the day on May 25, 2016, the Transaction Committee held another special meeting with members of Marketo management and representatives of Morgan Stanley and Wilson Sonsini. Morgan Stanley updated the Transaction Committee on the revised indications of interest Marketo had received from Vista and Party D. A representative of Morgan Stanley indicated that he believed, based on discussions with Vista and Party D, that Vista would not be able to go higher than its current price of $35.25 per share and that Party D indicated that it may have some room to move higher than $35.05 per share, but unlike Vista it also had remaining business due diligence items which if not confirmed could cause its indication of interest to move lower. The representative of Morgan Stanley also indicated that Vista's willingness to bid at $35.25 was tied to the limited exclusivity relative to Party D that was offered to both bidders. Representatives of Morgan Stanley and Wilson Sonsini led the Transaction Committee through a discussion regarding the key differences between Vista and Party D's final offers, including, among other things that Party D had proposed a termination fee of 2.70%, compared to a 3.50% termination fee proposed by Vista. Morgan Stanley also updated the Transaction Committee on the status of discussions with Party H, indicating that Morgan Stanley had attempted to reach a representative of Party H, but had not received a response from Party H at this time. The Transaction Committee instructed Morgan Stanley to inform Vista that, provided Vista would agree to certain material terms in the definitive agreement, including a reduction of the termination fee to 2.75%, Marketo was prepared to enter into a limited form of exclusivity with Vista to finalize the Merger Agreement and the related transaction documents. Near the end of the meeting, representatives of Morgan Stanley then left the meeting, and the Transaction Committee met in executive session with members of management and Wilson Sonsini. Subsequently, all members of

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management left the meeting, and the Transaction Committee met in an executive session with the representatives of Wilson Sonsini.

        In determining that it was appropriate and in the best interests of the Company to enter into limited exclusivity with Vista at such time, the Board of Directors considered, among other things, the fact that prior to entering into exclusivity with Vista, as part of its market check process, Marketo and Morgan Stanley had solicited six potential strategic parties and three potential financial sponsors as described above. In addition, throughout the process, the Board of Directors had also considered whether to initiate discussions with a limited number of additional strategic parties who are also competitors of Marketo. The Board of Directors considered the risk that reaching out to such competitors may harm Marketo's commercial prospects. It also considered the fact that these strategic parties had not reached out to Marketo regarding a potential acquisition, even after news outlets reported that Marketo was working with Morgan Stanley on a strategic review process on May 10, 2016. Morgan Stanley conducted several informal meetings with key representatives of the strategic parties after May 10, 2016, and the prospect of a transaction with Marketo was not discussed. The Board of Directors ultimately made the judgment that these strategic parties had been given sufficient opportunity to approach Marketo regarding an acquisition if they were interested, and, in light of the strategic and commercial risks of doing so, determined that Marketo should not approach them regarding a potential acquisition.

        On the evening of May 25, 2016, representatives of Morgan Stanley communicated to a representative of Vista that, as between existing parties who had made offers, it had the higher offer and that Marketo would grant Vista exclusivity through May 27, 2016, provided it agreed to certain revised terms in the definitive agreement draft it submitted, and that such exclusivity would only be related to those parties who had made a formal bid to Marketo.

        On May 25, 2016, Marketo and Vista entered into a limited exclusivity agreement through May 27, 2016, which enabled Marketo to continue discussions with the parties who had not yet made a proposal. Morgan Stanley subsequently communicated to each of Party H and Party E that time was of the essence and they would need to make a final decision in the next two days.

        On May 27, 2016, a representative of Party H communicated with a representative of Morgan Stanley to indicate that Party H was not interested in pursuing as acquisition at this time. On the same day, a representative of Party E communicated to a representative of Morgan Stanley that it would not be submitting an offer to acquire Marketo.

        Between the night of May 25, 2016 and May 27, 2016, representatives of Wilson Sonsini and Kirkland & Ellis LLP, legal counsel to Vista, worked to resolve the remaining open issues in the Merger Agreement and the various ancillary transaction documents.

        On May 27, 2016, the Board of Directors held a special meeting to consider the terms of the proposed transaction with members of Marketo's management and representatives of Morgan Stanley and Wilson Sonsini in attendance. A representative of Wilson Sonsini addressed the Board of Directors' fiduciary duties in connection with the sale of Marketo and then reviewed the terms of the draft Merger Agreement circulated prior to the Board of Directors meeting, including the resolution of the open issues, and reviewed certain other matters. Representatives of Morgan Stanley then reviewed its financial analysis and then delivered to the Board of Directors its oral opinion, subsequently confirmed in writing, that as of May 27, 2016, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, the consideration to be received by the holders of shares of our common stock (other than Excluded Shares) pursuant to the Merger Agreement was fair from a financial point of view to such holders. For more information about Morgan Stanley's opinion, see below under the caption "The Merger—Fairness Opinion of Morgan Stanley & Co. LLC." The representatives of Morgan Stanley then left the meeting, and the Board of

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Directors met in an executive session with members of management and the representatives of Wilson Sonsini. The Board of Directors further discussed the terms of the proposed offer from Vista and the sufficiency of the strategic review process. Subsequently, all members of management left the meeting, and the independent directors of the Board of Directors met in an executive session with the representatives of Wilson Sonsini. After a discussion with Wilson Sonsini regarding the strategic review process, the members of management rejoined the meeting. After discussing potential reasons for and against the proposed transaction (see below under the caption "The Merger—Recommendation of the Board of Directors and Reasons for the Merger"), the Board of Directors unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to, advisable and in the best interests of Marketo and its stockholders. The Board of Directors therefore unanimously adopted and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and recommended that Marketo's stockholders vote to approve the Merger Agreement at any meeting of the stockholders to be called for the purposes of acting thereon.

        On the evening of May 27, 2016, the parties executed the Merger Agreement and the related agreements in connection with the transaction, and issued a joint press release on the morning of May 31, 2016, prior to the opening of the stock markets in the United States, announcing the transaction.

Recommendation of the Board of Directors and Reasons for the Merger

Recommendation of the Board of Directors

         The Board of Directors has unanimously: (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, advisable and in the best interests of Marketo and its stockholders; and (2) adopted and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

         The Board of Directors unanimously recommends that you vote: (1) "FOR" the adoption the Merger Agreement; and (2) "FOR" the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting.

Reasons for the Merger

        In evaluating the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Board of Directors consulted with the Marketo management, its financial advisor and its outside legal counsel. In recommending that stockholders vote in favor of adoption of the Merger Agreement, the Board of Directors considered a number of factors, including the following (which factors are not necessarily presented in order of relative importance):

•

The Board of Directors' belief that the all-cash Per Share Merger Consideration provides certainty of value and liquidity to stockholders, while eliminating the effect of long-term business and execution risk to stockholders.



•

The relationship of the Per Share Merger Consideration to the trading price of the common stock, including that the Per Share Merger Consideration constituted a premium of:



•

approximately 64% to the unaffected closing price of the common stock on May 9, 2016, the last full trading day prior to public reports that Marketo engaged Morgan Stanley to explore strategic alternatives, including a potential sale; and



•

approximately 67% to the average closing market price of the common stock for the thirty trading day period ending on May 9, 2016, the last full trading day prior to public reports

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that Marketo engaged Morgan Stanley to explore strategic alternatives, including a potential sale.

•

The Board of Directors' belief that, based on negotiations and discussions with Vista, the Per Share Merger Consideration represented the highest price that Vista was willing to pay and the highest price per share value reasonably obtainable, each as of the date of the Merger Agreement.



•

The Board of Directors' understanding of Marketo's business and operations, and its current and historical results of operations, financial prospects and condition, including, more generally, the present competitive environment and business climate of the SaaS industry.



•

The perceived risks and benefits of a variety of strategic alternatives for Marketo, including: (1) the continuation of Marketo's business plan as an independent enterprise; (2) modifications to Marketo's strategy; (3) potential expansion opportunities into new business lines through acquisitions and combinations of Marketo with other businesses; and (4) the competitive landscape and the dynamics of the market for Marketo's products and technology.



•

The assessment that other alternatives were not reasonably likely to create greater value for stockholders than the Merger, taking into account execution risks as well as business, competitive, industry and market risks.



•

The multiples to revenues implied by the Per Share Merger Consideration.



•

The Board of Directors' consideration of Marketo's strategic and financial alternatives, including that:



•

Nine different parties and potential buyers were solicited during the process, including six strategic buyers and three private equity sponsors, in an effort to obtain the best value reasonably available to stockholders;



•

Of these bidders, only Vista and Party D made final bids to acquire Marketo;



•

Of the parties that made final bids to acquire Marketo, only Vista required no additional time for due diligence; and



•

Of the parties that made final bids to acquire Marketo, none made a final bid equal to or in excess of the Per Share Merger Consideration.



•

The risk that a prolonged strategic review process could have resulted in the loss of a favorable opportunity to successfully consummate the transaction with Vista, and was unlikely to yield a proposal that would be a material improvement to Vista's proposal.



•

The oral opinion of Morgan Stanley, subsequently confirmed in writing, delivered to the Board of Directors that, as of May 27, 2016 and based upon and subject to the factors, assumptions, considerations, limitations and other matters set forth in its opinion, the consideration to be received by the holders of shares of Marketo common stock (other than Excluded Shares, which include, for example, shares of common stock owned by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the DGCL), pursuant to the Merger Agreement was fair from a financial point of view to such holders. The 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. The opinion of Morgan Stanley is more fully described below under the caption "The Merger—Fairness Opinion of Morgan Stanley & Co. LLC."



•

The Management Projections, prepared by our management and more fully described below under the caption "The Merger—Marketo Financial Projections." The Management Projections

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were also provided to Morgan Stanley for the purposes of the opinion described in the preceding paragraph.

•

The terms of the Merger Agreement and the related agreements, including:



•

That the equity financing contemplated by the Equity Commitment Letter provided in favor of Parent was sufficient to fund the aggregate purchase price and the other payments contemplated by the Merger Agreement, and that Marketo is a named third party beneficiary of the Equity Commitment Letter;



•

The ability of the parties to consummate the Merger, including the fact that Parent's obligation to complete the Merger is not conditioned upon, nor limited by, the receipt of third-party debt financing;



•

Marketo's entitlement to specific performance to cause the equity financing contemplated by the Equity Commitment Letter to be funded, whether or not Vista is able to procure any debt to finance the transaction;



•

Marketo's ability, under certain circumstances, to furnish information to and conduct negotiations with third parties regarding Acquisition Proposals;



•

Marketo's ability to terminate the Merger Agreement in order to accept a Superior Proposal, subject to paying Parent a termination fee of $49.2 million and other conditions of the Merger Agreement;



•

The fact that the Board of Directors believed that the termination fee of $49.2 million, which is approximately 2.75% of Marketo's implied equity value in the Merger, is reasonable, below the market averages for such fees, and not preclusive of other offers;



•

Marketo's entitlement to specific performance to prevent breaches of the Merger Agreement;



•

The likelihood of satisfying the conditions to complete the Merger and the likelihood that the Merger will be completed;



•

The Board of Directors' view that the Merger Agreement (1) was the product of arms'-length negotiations, (2) contained terms and conditions which were favorable to Marketo and (3) was the result of a competitive solicitation process; and



•

The fact that Vista Fund VI provided a limited guaranty in favor of Marketo that guarantees the payment of all of the liabilities and obligations of Parent and Merger Sub under the Merger Agreement, subject to an aggregate cap equal to $116.3 million plus the Reimbursement Obligations (as described in the below section captioned "The Merger—Financing of the Merger").



•

The Board of Directors' view that the terms of the Merger Agreement would be unlikely to deter interested third parties from making a Superior Proposal, including the Merger Agreement's terms and conditions as they relate to changes in the recommendation of the Board of Directors and the belief that the termination fee potentially payable to Parent is reasonable in light of the circumstances, consistent with comparable transactions and not preclusive of other offers (see the sections captioned "Proposal 1: Adoption of the Merger Agreement—No Solicitation of Other Offers " and "Proposal 1: Adoption of the Merger Agreement—The Board of Directors' Recommendation; Company Board Recommendation Changes").

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        The Board of Directors also considered a number of uncertainties and risks concerning the Merger, including the following (which factors are not necessarily presented in order of relative importance):

•

The risks and costs to Marketo if the Merger does not close, including the diversion of management and employee attention, and the potential effect on our business and relationships with customers and suppliers.



•

The fact that stockholders will not participate in any future earnings or growth of Marketo and will not benefit from any appreciations in value of Marketo, including any appreciation in value that could be realized as a result of improvements to our operations or future strategic or other transactions by Marketo.



•

The requirement that Marketo pay Parent a termination fee of $49.2 million under certain circumstances following termination of the Merger Agreement, including if the Board of Directors terminates the Merger Agreement to accept a Superior Proposal.



•

The restrictions on the conduct of Marketo's business prior to the consummation of the Merger, including the requirement that we conduct our business in the ordinary course, subject to specific limitations, which may delay or prevent Marketo from undertaking business opportunities that may arise before the completion of the Merger and that, absent the Merger Agreement, Marketo might have pursued.



•

The fact that an all cash transaction would be taxable to Marketo's stockholders that are U.S. persons for U.S. federal income tax purposes.



•

The fact that under the terms of the Merger Agreement, Marketo is unable to solicit other Acquisition Proposals during the pendency of the Merger.



•

The significant costs involved in connection with entering into the Merger Agreement and completing the Merger (many of which are payable whether or not the Merger is consummated) and the substantial time and effort of Marketo management required to complete the Merger, which may disrupt our business operations.



•

The fact that Marketo's business, sales operations and financial results could suffer in the event that the Merger is not consummated.



•

The risk that the Merger might not be completed and the effect of the resulting public announcement of termination of the Merger Agreement on the trading price of the common stock.



•

The fact that the completion of the Merger will require antitrust clearance in the United States.



•

The fact that Marketo's directors and officers may have interests in the Merger that may be different from, or in addition to, those of Marketo's stockholders (see below under the caption "The Merger—Interests of Marketo's Directors and Executive Officers in the Merger").



•

The fact that the announcement and pendency of the Merger, or the failure to complete the Merger, may cause substantial harm to Marketo's relationships with its employees (including making it more difficult to attract and retain key personnel and the possible loss of key management, technical, sales and other personnel), vendors and customers and may divert employees' attention away from Marketo's day-to-day business operations.

        The foregoing discussion is not meant to be exhaustive, but summarizes the material factors considered by the Board of Directors in its consideration of the Merger. After considering these and other factors, the Board of Directors concluded that the potential benefits of the Merger outweighed the uncertainties and risks. In view of the variety of factors considered by the Board of Directors and

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the complexity of these factors, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the foregoing factors in reaching its determination and recommendations. Moreover, each member of the Board of Directors applied his or her own personal business judgment to the process and may have assigned different weights to different factors. The Board of Directors unanimously adopted and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and recommends that stockholders adopt the Merger Agreement based upon the totality of the information presented to and considered by the Board of Directors.

Fairness Opinion of Morgan Stanley & Co. LLC

        Marketo retained Morgan Stanley to provide it with financial advisory services and a financial opinion in connection with the possible sale of Marketo. The Board of Directors selected Morgan Stanley to act as Marketo's financial advisor based on Morgan Stanley's qualifications, expertise and reputation, its knowledge of and involvement in recent transactions in the SaaS industry, and its knowledge and understanding of Marketo's business and affairs. At the meeting of the Board of Directors on May 27, 2016, Morgan Stanley rendered to the Board of Directors its oral opinion, subsequently confirmed in writing, that as of May 27, 2016, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken, by Morgan Stanley, as set forth in its written opinion, the consideration to be received by the holders of shares of Marketo common stock (other than Excluded Shares, which include, for example, shares of common stock owned by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the DGCL), pursuant to the Merger Agreement, was fair from a financial point of view to such stockholders.

         The full text of the written opinion of Morgan Stanley to the Board of Directors, dated as of May 27, 2016, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken, by Morgan Stanley in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated by reference in this proxy statement in its entirety. The summary of the opinion of Morgan Stanley in this proxy statement is qualified in its entirety by reference to the full text of the opinion. You should carefully read and consider Morgan Stanley's entire written opinion, as it contains important information. Morgan Stanley's opinion was directed to the Board of Directors, in its capacity as such, and addresses only the fairness from a financial point of view of the consideration to be received by the holders of shares of Marketo common stock (other than Excluded Shares, which include, for example, shares of common stock owned by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the DGCL), pursuant to the Merger Agreement and as of the date of the opinion, and does not address any other aspects or implications of the Merger or related transactions. Morgan Stanley's opinion was not intended to, and does not, constitute advice or a recommendation as to how our stockholders should vote at any stockholders' meeting that may be held in connection with the Merger or whether the stockholders should take any other action in connection with the Merger. The summary of the opinion of Morgan Stanley set forth below is qualified in its entirety by reference to the full text of the opinion.

        In connection with rendering its opinion, Morgan Stanley, among other things:

•

reviewed certain publicly available financial statements and other business and financial information of Marketo;



•

reviewed certain internal financial statements and other financial and operating data concerning Marketo;



•

reviewed certain financial projections prepared by the management of Marketo;

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•

discussed the past and current operations and financial condition and the prospects of Marketo with senior executives of Marketo;



•

reviewed the reported prices and trading activity for Marketo common stock;



•

compared Marketo's financial performance and the prices and trading activity of Marketo's common stock with that of certain other publicly-traded companies comparable with Marketo, and their securities;



•

reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;



•

participated in certain discussions and negotiations among representatives of Marketo and Parent and their financial and legal advisors;



•

reviewed the Merger Agreement and certain related documents; and



•

performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate.

        In arriving at its opinion, Morgan Stanley 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 Morgan Stanley by Marketo, and which formed a substantial basis for its opinion. Morgan Stanley further relied upon the assurances of Marketo management that it was not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the financial projections, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of Marketo management of the future financial performance of Marketo. In addition, Morgan Stanley assumed that the Merger will be consummated in accordance with the terms set forth in the Merger Agreement without any waiver, amendment or delay of any terms or conditions and that the definitive Merger Agreement would not differ in any material respect from the draft furnished to Morgan Stanley. Morgan Stanley assumed that, in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed merger. Morgan Stanley is not a legal, tax or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of Marketo and its legal, tax or regulatory advisors with respect to legal, tax or regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to be paid to any Marketo officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of shares of Marketo common stock in the Merger. Morgan Stanley did not make any independent valuation or appraisal of Marketo's assets or liabilities, nor was Morgan Stanley furnished with any such valuations or appraisals. Morgan Stanley's opinion was necessarily based on financial, economic, market, and other conditions as in effect on, and the information made available to Morgan Stanley as of, May 27, 2016. Events occurring after May 27, 2016 may affect Morgan Stanley's opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.

Summary of Financial Analyses

        The following is a brief summary of the material analyses performed by Morgan Stanley in connection with its oral opinion and the preparation of its written opinion letter dated May 27, 2016 to the Board of Directors. The following summary is not a complete description of Morgan Stanley's opinion or the financial analyses performed and factors considered by Morgan Stanley in connection with its opinion, nor does the order of analyses described represent the relative importance or weight given to those analyses. Except as otherwise noted, the following quantitative information, to the extent

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that it is based on market data, is based on market data as it existed on or before May 27, 2016, the last full trading day prior to the meeting of the Board of Directors to approve and adopt the Merger Agreement, declare the advisability of the Merger Agreement and approve the transactions contemplated thereby, including the Merger. The various analyses summarized below were based on the closing price of $21.47 per share of Marketo common stock as of May 9, 2016 (the last full trading day prior to public reports that Marketo engaged Morgan Stanley to explore strategic alternatives, including a potential sale), and are not necessarily indicative of current market conditions. Some of these summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley's opinion.

        In performing the financial analysis summarized below and arriving at its opinion, Morgan Stanley used and relied upon certain financial projections provided by Marketo's management and referred to in this proxy statement (and defined in the following section captioned, "The Merger—Marketo Financial Projections") as the "Higher Growth Case" and the "Leveraged Growth Case," and, together, the "Management Projections," and certain financial projections based on Wall Street research reports and referred to in this proxy statement as the "Street Case." For more information, please see the section of this proxy statement captioned, "The Merger—Marketo Financial Projections."

Public Trading Comparables Analysis

        Morgan Stanley performed a public trading comparables analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded. Morgan Stanley reviewed and compared certain financial estimates for Marketo with comparable publicly available consensus equity analyst research estimates for companies, selected based on Morgan Stanley's professional judgment and experience, that share similar business characteristics and have certain comparable operating characteristics including, among other things, similarly sized revenue and/or revenue growth rates, market capitalizations, profitability, scale and/or other similar operating characteristics (we refer to these companies as the comparable companies). These companies were the following:

•

Cornerstone OnDemand Inc.



•

Cvent, Inc.



•

Demandware, Inc.



•

HubSpot, Inc.



•

NetSuite Inc.



•

New Relic, Inc.



•

RingCentral, Inc.



•

Salesforce.com, Inc.



•

Tableau Software, Inc.



•

Zendesk, Inc.

        For purposes of this analysis, Morgan Stanley analyzed the ratio of aggregate value, which Morgan Stanley defined as fully-diluted market capitalization plus total debt, plus non-controlling interest, less cash and cash equivalents, to revenue.

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        Based on its analysis of the relevant metrics for each of the comparable companies and upon the application of its professional judgment and experience, Morgan Stanley selected representative ranges of revenue multiples and applied these ranges of multiples to the estimated 2016 and 2017 revenue for Marketo, based on the Street Case and Management Projections. With respect to Cvent, Morgan Stanley's analysis utilized a price per share for Cvent as of prior to its publicly announced acquisition by Vista Equity Partners.

        Based on the outstanding shares of Marketo common stock on a fully-diluted basis (including outstanding options, performance stock units and restricted stock units) on May 24, 2016, as provided by Marketo management, Morgan Stanley calculated the estimated implied value per share of Marketo's common stock as of May 27, 2016 as follows:

        No company utilized in the public trading comparables analysis is identical to Marketo. In evaluating the comparable companies, Morgan Stanley made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond Marketo's control. These include, among other things, the impact of competition on Marketo's business and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of Marketo and the industry, and in the financial markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using comparable company data.

Discounted Equity Value Analysis

        Morgan Stanley performed a discounted equity value analysis, which is designed to provide insight into the potential future equity value of Marketo as a function of Marketo's estimated future revenues. The resulting equity value is subsequently discounted to arrive at an estimate of the implied present value. In connection with this analysis, Morgan Stanley calculated a range of implied present equity values per share of common stock on a standalone basis. The discounted equity value using the Management Projections was calculated using revenue projections provided by Marketo management for calendar year 2018. In addition, Morgan Stanley calculated the discounted equity value using the Street Case. In analyzing the Street Case, Morgan Stanley used revenue estimates for calendar years 2016 and 2017 from publicly available Wall Street research available as of May 11, 2016, as well as extrapolations discussed with, and approved by, Marketo management for estimated revenue for calendar year 2018. Morgan Stanley then used the 2018 revenue estimates for the basis of the Street Case in this analysis. Based upon the application of its professional judgment and experience, Morgan Stanley applied a range of revenue multiples to the estimates of 2018 revenue from the Management Projections and Street Case and then applied a discount rate of 10.03%, which rate was selected based on Marketo's estimated cost of equity.

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        The following table summarizes Morgan Stanley's analysis:

Discounted Cash Flow Analysis

        Morgan Stanley performed a discounted cash flow analysis, which is designed to provide an implied value of a company by calculating the present value of the estimated future cash flows and terminal value of such company. Morgan Stanley calculated a range of equity values per share for Marketo common stock based on a discounted cash flow analysis to value Marketo as a stand-alone entity. Morgan Stanley utilized estimates from the Management Projections and Street Case for purposes of its discounted cash flow analysis, as more fully described below.

        Morgan Stanley first calculated the estimated unlevered free cash flow which is defined as adjusted earnings before interest, taxes, depreciation and amortization, less (1) stock-based compensation expense, (2) taxes, and (3) capital expenditures, and plus changes in net working capital. The Management Projections estimates through 2019 were based on projections prepared by Marketo management, and the estimated unlevered free cash flow for calendar years 2020 through 2025 were based on extrapolations of such estimates discussed with, and approved by, Marketo management. The Street Case estimates through 2017 were based on publicly available Wall Street research available as of May 11, 2016, except for the changes in net working capital as a percentage of change in revenue assumptions through 2017, which were adjusted to be in line with Leveraged Growth Case. The estimated unlevered free cash flow projections for the Street Case for calendar years 2018 through 2025 were based on extrapolations discussed with, and approved by, Marketo's management. Morgan Stanley calculated the net present value of free cash flows for Marketo for the nine months ended December 31, 2016 through calendar year 2025. Based on the perpetual growth rates ranging from 2.5% to 3.5%, selected based upon the application of its professional judgment and experience, Morgan Stanley calculated terminal values in the year 2025. The free cash flows and terminal values were discounted to present values as of March 31, 2016 at a discount rate of 10.03%, which discount rate was selected, upon the application of Morgan Stanley's professional judgment and experience, to reflect an estimate of Marketo's weighted average cost of capital.

        Based on the outstanding shares on May 24, 2016 of Marketo common stock on a fully-diluted basis (including outstanding options, performance stock units and restricted stock units) as provided by Marketo management, Morgan Stanley calculated the estimated implied value per share of Marketo common stock as of March 31, 2016 as follows:

Precedent Transactions Analysis

        Morgan Stanley performed a precedent transactions analysis, which is designed to imply a value of a company based on publicly available financial terms and premia of selected transactions. Morgan

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Stanley compared publicly available statistics for, cloud and software transactions, selected based on Morgan Stanley's professional judgment and experience, with an equity value of greater than $1 billion occurring between 2010 and May 27, 2016 (the last full trading day prior to the meeting of the Board of Directors to approve and adopt the Merger Agreement, declare the advisability of the Merger Agreement and approve the transactions contemplated thereby, including the Merger). Morgan Stanley selected such comparable transactions because they shared certain characteristics with the Merger. The following is a list of the cloud and software transactions reviewed:

Selected Cloud and Software Transactions (Target / Acquiror):

Acme Packet, Inc. / Oracle Corporation
AirWatch LLC / VMware, Inc.
ArcSight Inc. / Hewlett-Packard Company
Ariba Inc. / SAP Corporation
Art Technology Group, Inc. / Oracle Corporation
Autonomy Corporation plc / Hewlett-Packard Company
Blackboard Inc. / Providence Equity Partners
Blue Coat Systems, Inc. / Bain Capital
Concur Technologies, Inc. / SAP Corporation
Constant Contact, Inc. / Endurance International Group Holdings, Inc.
Cvent Inc. / Vista Equity Partners
Dealertrack Technologies, Inc. / Cox Automotive, Inc.
Eclipsys Corporation / Allscripts Healthcare Solutions, Inc.
ExactTarget, Inc. / Salesforce.com, Inc.
Informatica Corporation / Permira Funds
Interactive Data Corporation / Silver Lake Partners and Warburg Pincus
JDA Software Group, Inc. / RedPrairie Corp.
Kenexa Corporation / International Business Machines Corporation
Lawson Software Inc. / Infor Global Solutions and Golden Gate Capital
Mandiant Corporation / FireEye, Inc.
McAfee, Inc. / Intel Corporation
Misys / Vista Equity Partners
Novell, Inc. / Attachmate Corporation
Quest Software, Inc. / Dell Inc.
Radiant Systems, Inc. / NCR Corporation
Responsys, Inc. / Oracle Corporation
RightNow Technologies, Inc. / Oracle Corporation
Skillsoft PLC / Berkshire Partners LLC, Advent International Corporation and Bain Capital Partners, LLC
SolarWinds, Inc. / Silver Lake Partners and Thoma Bravo, LLC
Solera Holdings, Inc. / Vista Equity Partners
SonicWALL, Inc. / Dell Inc.
Sourcefire, Inc. / Cisco Systems, Inc.
SuccessFactors, Inc. / SAP Corporation
SunGard Data Systems Inc. / Fidelity National Information Services Inc.
Sybase Inc. / SAP Corporation
Taleo Corporation / Oracle Corporation
VeriSign, Inc. / Symantec Corp.

        For the transactions listed above, Morgan Stanley noted the multiple of aggregate value of the transaction to next twelve months revenue.

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        Morgan Stanley reviewed the same group of select precedent transactions described above that involved publicly listed companies, and excluding private company targets, occurring between 2010 and May 27, 2016 (the last full trading day prior to the meeting of the Board of Directors to approve and adopt the Merger Agreement, declare the advisability of the Merger Agreement and approve the transactions contemplated thereby, including the Merger). For these transactions, Morgan Stanley noted the distributions of the following financial statistics: (1) the implied premium to the acquired company's closing share price on the last trading day prior to announcement (or the last trading day prior to the share price being affected by acquisition rumors or similar merger-related news); and (2) the implied premium to the acquired company's 30-trading-day average closing share price prior to announcement (or the last 30-trading-day average closing share price prior to the share price being affected by acquisition rumors or similar merger-related news).

        Based on its analysis of the relevant metrics and time frame for each of the transactions listed above and upon the application of its professional judgment and experience, Morgan Stanley selected representative ranges of implied premia and financial multiples of the transactions and applied these ranges of premia and financial multiples to the relevant financial statistic for Marketo. The selected representative ranges of implied premia were based on the 25th percentile and 75th percentile of the respective premia from the group of select public precedent transactions described above. The following table summarizes Morgan Stanley's analysis:

        Morgan Stanley noted that the consideration to be received by holders of shares of Marketo common stock (other than Excluded Shares, which include, for example, shares of common stock owned by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the DGCL) pursuant to the Merger Agreement is $35.25 per share.

        No company or transaction utilized in the precedent transactions analysis is identical to Marketo or the Merger. In evaluating the precedent transactions, Morgan Stanley made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond Marketo's control. These include, among other things, the impact of competition on Marketo's business and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of Marketo and the industry, and in the financial markets in general, which could affect the public trading value of the companies and the aggregate value and equity value of the transactions to which they are being compared. The fact that points in the range of implied present value per share of Marketo derived from the valuation of precedent transactions were less than or greater than the consideration is not necessarily dispositive in connection with Morgan Stanley's analysis of the consideration for the Merger, but one of many factors Morgan Stanley considered.

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Other Information

        Morgan Stanley observed additional factors that were not considered part of Morgan Stanley's financial analysis with respect to its opinion, but which were noted as reference data for the Board of Directors, including the following information described under the sections titled "Trading Range" and "Equity Research Analysts' Future Price Targets."

        Morgan Stanley observed that Marketo common stock closed at $21.47 on May 9, 2016. Morgan Stanley noted that the consideration per share of Marketo common stock of $35.25 pursuant to the Merger Agreement reflected a 64.2% premium to the closing price per share of Marketo common stock on May 9, 2016 and a 67.3% premium to the average closing price per share of Marketo common stock for the 30-trading-days prior to and including May 9, 2016.

Equity Research Analysts' Future Price Targets

        Morgan Stanley reviewed future public market trading price targets for Marketo common stock prepared and published by equity research analysts prior to May 27, 2016 (the last full trading day prior to the meeting of the Board of Directors to approve and adopt the Merger Agreement, declare the advisability of the Merger Agreement and approve the transactions contemplated thereby, including the Merger). These one-year forward targets reflected each analyst's estimate of the future public market trading price of Marketo common stock. The 25th percentile and 75th percentile of undiscounted analyst price targets for Marketo common stock was $26.00 and $35.00 per share as of May 27, 2016. The 25th percentile and 75th percentile of analyst price targets per share of Marketo common stock discounted for one year at a rate of 10.03%, selected by Morgan Stanley, upon the application of its professional judgment, to reflect Marketo's cost of equity, was $23.63 to $31.81 per share as of May 27, 2016.

        The public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for Marketo common stock, and these estimates are subject to uncertainties, including the future financial performance of Marketo and future financial market conditions.

General

        In connection with the review of the Merger by the Board of Directors, Morgan Stanley 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 susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley 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. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a

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whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley 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 Morgan Stanley's view of the actual value of Marketo. In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond Marketo's control. These include, among other things, the impact of competition on Marketo's business and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of Marketo and the industry, and in the financial markets in general. Any estimates contained in Morgan Stanley's 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.

        Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness from a financial point of view of the consideration to be received by the holders of shares of Marketo common stock (other than Excluded Shares, which include, for example, shares of common stock owned by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the DGCL) pursuant to the Merger Agreement and in connection with the delivery of its opinion, dated May 27, 2016, to the Board of Directors. These analyses do not purport to be appraisals or to reflect the prices at which shares of Marketo common stock might actually trade.

        The consideration to be received by the holders of shares of Marketo common stock (other than Excluded Shares, which include, for example, shares of common stock owned by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the DGCL) pursuant to the Merger Agreement was determined through arm's-length negotiations between Marketo and Parent and was approved by the Board of Directors. Morgan Stanley provided advice to the Board of Directors during these negotiations but did not, however, recommend any specific consideration to Marketo or the Board of Directors, nor did Morgan Stanley opine that any specific consideration constituted the only appropriate consideration for the Merger. Morgan Stanley's opinion did not address the relative merits of the Merger as compared to any other alternative business transaction, or other alternatives, or whether or not such alternatives could be achieved or are available. Morgan Stanley's opinion was not intended to, and does not, constitute advice or a recommendation as to how Marketo stockholders should vote at any stockholders' meeting that may be held in connection with the Merger, or whether the stockholders should take any other action in connection with the Merger.

        Morgan Stanley's opinion and its presentation to the Board of Directors was one of many factors taken into consideration by the Board of Directors in deciding to approve and adopt the Merger Agreement, declare the advisability of the Merger Agreement and approve the transactions contemplated thereby, including the Merger. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the Board of Directors with respect to the consideration pursuant to the Merger Agreement or of whether the Board of Directors would have been willing to agree to different consideration. Morgan Stanley's opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with Morgan Stanley's customary practice.

        The Board of Directors retained Morgan Stanley based upon Morgan Stanley's qualifications, experience and expertise. Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Its securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its

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customers, in debt or equity securities or loans of the Parent, Marketo, Vista and its affiliated funds, including, but not limited to Vista Fund VI (Vista, together with Vista Fund VI, and each of their respective affiliated funds, collectively, the "Vista Entities") or any other company, or any currency or commodity, that may be involved in the Merger, or any related derivative instrument.

        Under the terms of its engagement letter, Morgan Stanley provided Marketo financial advisory services and a financial opinion, described in this section and attached to this proxy statement as Annex B, in connection with the Merger, and Marketo has agreed to pay Morgan Stanley a fee of approximately $27.1 million for its services, approximately $24.1 million of which is contingent upon the closing of the Merger, and $3.0 million of which was due and payable upon the execution of the Merger Agreement. Marketo has also agreed to reimburse Morgan Stanley for its reasonable expenses, including fees of outside counsel and other professional advisors, incurred in connection with its engagement. In addition, Marketo has agreed to indemnify Morgan Stanley and its affiliates, its and their respective directors, officers, agents and employees and each other person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses relating to, arising out of or in connection with Morgan Stanley's engagement.

        In the two years prior to the date of Morgan Stanley's opinion, Morgan Stanley and its affiliates have been engaged on financial advisory and financing assignments for the Vista Entities, including, Vista Fund VI, and have received approximately $24.6 million in fees for such services from the Vista Entities, including, Vista Fund VI, which, together with one or more of its affiliates, is the controlling stockholder of the Parent. In the two years prior to the date of Morgan Stanley's opinion, Morgan Stanley and its affiliates have not been engaged on any financial advisory or financing assignments for Marketo, and have not received any fees for such services from Marketo during such time. Morgan Stanley may seek to provide financial advisory or financing services to Marketo, the Parent, or the Vista Entities and each of their respective affiliates in the future and would expect to receive fees for the rendering of these services.

Marketo Financial Projections

        Marketo does not, as a matter of course, publicly disclose its projections of its future financial performance. However, early in April 2016, before Marketo had engaged in any discussions with any third parties regarding a potential transaction with Marketo, Marketo's management prepared two sets of financial projections, which were provided to the Board of Directors and Morgan Stanley on May 13, 2016 in connection with the strategic review process, as described in this proxy statement. The first set of financial projections, which we refer to as the "Leveraged Growth Case," assumed a revenue growth rate of 29%-31% with a faster path to profitability. The second set of financial projections, which we refer to as the "Higher Growth Case," assumed a higher revenue growth rate and profitability later in the period of the projections due to a significant investment in new customer acquisition and market share growth. Within each case, Marketo adjusted spend rates to reflect costs necessary to support and improve the health of the installed base and costs associated with new customer acquisition. We refer to the Leveraged Growth Case and the Higher Growth Case, together, as the "Management Projections."

        The Management Projections were the only financial forecasts with respect to Marketo provided by Marketo for use by Morgan Stanley in performing its financial analyses during the strategic review process. The Leveraged Growth Case was the only financial forecasts made available to the participants in the strategic review process in connection with their due diligence review.

        Summaries of the Management Projections are set forth below.

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