Form 4: Clearwater Analytics Director Eric J. Lee Reports Automatic Share Conversion and Beneficial Ownership Update

Clearwater Analytics Holdings, Inc. Director Eric J. Lee has filed a Form 4 detailing the automatic conversion of 220,137 Class C Common Stock shares into Class B Common Stock, triggered by Welsh Carson affiliates' ownership falling below 5%.

Summary

• On June 12, 2025, Eric J. Lee, a Director of Clearwater Analytics Holdings, Inc. (CWAN), reported changes in his beneficial ownership of the company's securities.
• A total of 220,137 shares of Class C Common Stock, previously distributed to Mr. Lee by WCAS XIII Associates LLC, automatically converted into an equal number of Class B Common Stock shares.
• This conversion was triggered because affiliates of Welsh Carson's ownership of the Issuer's common stock fell below 5% on the transaction date.
• Of the newly converted Class B Common Stock, 166,771 shares are held directly by Mr. Lee, and 53,366 shares are held by the Eric J Lee 2014 Irrevocable Trust.
• Class B Common Stock shares are entitled to one vote per share but do not represent economic interests in the Issuer.
• Following the reported transaction, Mr. Lee beneficially owns 311,320 shares of Class A Common Stock, consisting of 235,849 shares held directly and 75,471 shares held by the Eric J Lee 2014 Irrevocable Trust.
• Mr. Lee also beneficially owns 220,137 CWAN Holdings LLC Interests, with 166,771 held directly and 53,366 held by the Eric J Lee 2014 Irrevocable Trust.
• These LLC Interests, along with an equal number of Class B Common Stock, are exchangeable for an equal number of newly issued Class A Common Stock or, at the Issuer's election, a cash payment based on the 20-day volume weighted average price of Class A Common Stock.

Sentiment

Score: 5

Explanation: The document is a factual report of an automatic share conversion and beneficial ownership update, which is a neutral event in terms of company performance or outlook. It does not contain information that would significantly alter sentiment.

Positives

• The automatic conversion mechanism clarifies the company's capital structure as major investors reduce their stake, potentially simplifying the share class structure over time.
• The Class B Common Stock, while carrying voting rights, does not represent economic interests, which means the economic value is concentrated in the Class A shares and exchangeable LLC interests.

Future Outlook

The document does not provide any forward-looking statements or guidance regarding the company's future performance or strategic direction, beyond the potential future exchange of LLC Interests for Class A Common Stock or cash.

Industry Context

This Form 4 filing is a routine disclosure of an insider's beneficial ownership changes, specifically an automatic share class conversion. It does not provide information relevant to broader industry trends or competitive dynamics.

Related Party Transactions

• The Class C Common Stock and LLC Interests were previously received by the Reporting Person in pro rata distributions from WCAS XIII Associates LLC, which is an affiliate of Welsh Carson, a significant former investor in the Issuer.

Stakeholder Impact

• Shareholders: The conversion clarifies the voting structure, as Class B shares carry voting rights but no economic interest, while Class A shares represent economic interest. This may simplify the understanding of the company's capital structure over time as legacy share classes convert.
• Investors: Provides transparency into the beneficial ownership of a key director and the mechanics of the company's multi-class share structure.

Next Steps

• The Reporting Person may exchange all or a portion of their CWAN Holdings LLC Interests (together with an equal number of Class B Common Stock) for an equal number of newly issued shares of Class A Common Stock, or a cash payment at the Issuer's election.

Key Dates

Keywords

Clearwater Analytics, CWAN, Form 4, Insider Ownership, Beneficial Ownership, Stock Conversion, Class B Common Stock, Class A Common Stock, LLC Interests, Eric J. Lee, Welsh Carson