Item 1.01 - Entry into a Material Definitive Agreement
Indentures and Notes
On April 9, 2020, Slack Technologies, Inc. (the "Company") issued $862.5 million
in aggregate principal amount of 0.50% Convertible Senior Notes due 2025 (the
"Notes"), pursuant to an Indenture dated April 9, 2020 (the "Indenture"),
between the Company and U.S. Bank National Association, as trustee (the
"Trustee"), in a private offering to qualified institutional buyers (the "Note
Offering") pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"). The Notes issued in the Note Offering include $112.5
million aggregate principal amount of Notes sold pursuant to the exercise in
full of the option to purchase additional Notes granted to the initial
purchasers of the Notes in the purchase agreement, dated April 6, 2020, among
the Company and the representatives, on behalf of the initial purchasers (the
"Purchase Agreement").
The Notes are senior, unsecured obligations of the Company and will accrue
interest payable semiannually in arrears on April 15 and October 15 of each
year, beginning on October 15, 2020, at a rate of 0.50% per year. The Notes will
mature on April 15, 2025, unless earlier converted, redeemed, or repurchased.
The Notes are convertible into cash, shares of the Company's Class A common
stock or a combination of cash and shares of the Company's Class A common stock,
at the Company's election.
A holder of Notes may convert all or any portion of its Notes at its option at
any time prior to the close of business on the business day immediately
preceding January 15, 2025 only under the following circumstances: (1) during
any fiscal quarter commencing after the fiscal quarter ending on July 31, 2020
(and only during such fiscal quarter), if the last reported sale price of the
Company's Class A common stock for at least 20 trading days (whether or not
consecutive) during a period of 30 consecutive trading days ending on, and
including, the last trading day of the immediately preceding calendar quarter is
greater than or equal to 130% of the conversion price on each applicable trading
day; (2) during the five business day period after any ten consecutive trading
day period (the "measurement period") in which the "trading price" (as defined
in the Indenture) per $1,000 principal amount of Notes for each trading day of
the measurement period was less than 98% of the product of the last reported
sale price of the Company's Class A common stock and the conversion rate on each
such trading day; or (3) upon the occurrence of specified corporate events. On
or after January 15, 2025 until the close of business on the second scheduled
trading day immediately preceding the maturity date, a holder may convert all or
any portion of its Notes at any time, regardless of the foregoing.
The conversion rate will initially be 32.2630 shares of the Company's Class A
common stock per $1,000 principal amount of Notes (equivalent to an initial
conversion price of approximately $31.00 per share of the Company's Class A
common stock). The conversion rate is subject to adjustment in some events but
will not be adjusted for any accrued and unpaid interest. In addition, following
certain corporate events that occur prior to the maturity date, the Company
will, in certain circumstances, increase the conversion rate for a holder who
elects to convert its Notes in connection with such a corporate event.
The Company may not redeem the Notes prior to April 20, 2023. The Company may
redeem for cash all or any portion of the Notes, at its option, on a redemption
date occurring on or after April 20, 2023 and on or before the 21st scheduled
trading day immediately before the maturity date, if the last reported sale
price of the Company's Class A common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days (whether or not
consecutive), including the trading day immediately preceding the date on which
the Company provides notice of redemption, during any 30 consecutive trading day
period ending on, and including, the trading day immediately preceding the date
on which the Company provides notice of redemption at a redemption price equal
to 100% of the principal amount of the notes to be redeemed, plus accrued and
unpaid interest to, but excluding, the redemption date. No sinking fund is
provided for the Notes.
If the Company undergoes a fundamental change (as defined in the Indenture),
holders may require the Company to repurchase for cash all or any portion of
their Notes at a fundamental change repurchase price equal to 100% of the
principal amount of the Notes to be repurchased, plus any accrued and unpaid
interest to, but excluding, the fundamental change repurchase date.
The Indenture contains customary terms and covenants, including that upon
certain events of default occurring and continuing, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may declare the entire principal amount of all the Notes plus
accrued special interest, if any, to be immediately due and payable.
The Notes are the Company's general unsecured obligations and rank senior in
right of payment to all of the Company's indebtedness that is expressly
subordinated in right of payment to the Notes; equal in right of payment with
all of the Company's liabilities that are not so subordinated; effectively
junior to any of the Company's secured indebtedness to the

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extent of the value of the assets securing such indebtedness; and structurally
junior to all indebtedness and other liabilities (including trade payables) of
the Company's subsidiaries.
A copy of the Indenture and form of Note are filed as Exhibit 4.1 and Exhibit
4.2, respectively, to this Current Report on Form 8-K and are incorporated by
reference herein. The foregoing description of the Indenture and Notes does not
purport to be complete and is qualified in its entirety by reference to such
exhibits.
Capped Call Transactions
On April 6, 2020, concurrently with the pricing of the Notes, the Company
entered into privately negotiated capped call transactions (the "Base Capped
Call Transactions") with certain financial institutions (the "Option
Counterparties"). In addition, in connection with initial purchasers' exercise
in full of their option to purchase additional Notes, on April 7, 2020, the
Company entered into additional capped call transactions (the "Additional Capped
Call Transactions," and, together with the Base Capped Call Transactions, the
"Capped Call Transactions") with each of the Option Counterparties. The Company
used approximately $105.6 million of the net proceeds from the Note Offering to
pay the cost of the Capped Call Transactions. The Capped Call Transactions are
expected generally to reduce the potential dilution to the Company's Class A
common stock upon any conversion of Notes and/or offset any cash payments the
Company is required to make in excess of the principal amount of converted
Notes, as the case may be, with such reduction and/or offset subject to a cap
initially equal to $48.62 (which represents a premium of 100% over the last
reported sale price of the Company's Class A common stock on April 6, 2020). The
Capped Call Transactions are separate transactions, entered into by the Company
with the Option Counterparties, and are not part of the terms of the Notes.
A copy of the form of confirmation for the Capped Call Transactions is filed as
Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference
herein. The foregoing description of the terms of the Capped Call Transaction
does not purport to be complete and is qualified in its entirety by reference to
such exhibit.
Item 2.03 - Creation of a Direct Financial Obligation under an Off-Balance Sheet
Arrangement of a Registrant
The information provided in Item 1.01 of this Report is hereby incorporated by
reference into this Item 2.03.
Item 3.02 - Unregistered Sale of Equity Securities
The information provided in Item 1.01 of this Report is hereby incorporated by
reference into this Item 3.02.
The Company's offering of the Notes to the initial purchasers was made in
reliance on the exemption from registration provided by Section 4(a)(2) of the
Securities Act. The Company relied on this exemption from registration based in
part on representations made by the initial purchasers in the Purchase Agreement
for the Notes, including that the initial purchasers would only offer, sell or
deliver the Notes to persons whom they believed to be qualified institutional
buyers within the meaning of Rule 144A under the Securities Act.
The Notes and the Company's Class A common stock issuable upon conversion of the
Notes, if any, have not been registered under the Securities Act and may not be
offered or sold in the United States absent registration or applicable exemption
from registration requirements.
Item 9.01 - Financial Statements and Exhibits
(d) Exhibits
Exhibit Number   Description
4.1                Indenture, dated as of April 9, 2020, by and between Slack
                 Technologies, Inc. and U.S. Bank National Association, as Trustee  .
4.2                Form of Global Note, representing Slack Technologies, Inc.'s 0.50%
                 Convertible Senior Notes due 2025 (included as Exhibit A to the
                 Indenture filed as Exhibit 4.1)  .
10.1               Form of Confirmation for Capped Call Transactions  .

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