Form 4: Zuora CEO Tien Tzuo Executes Stock Option and Sells Shares Under 10b5-1 Plan

Zuora's Chairman and CEO, Tien Tzuo, exercised stock options and sold Class A Common Stock under a pre-arranged 10b5-1 trading plan.

Summary

• Tien Tzuo, Chairman and CEO of Zuora, Inc., executed a transaction involving the exercise of stock options and the sale of Class A Common Stock on April 17, 2024.
• The transactions were conducted under a 10b5-1 trading plan adopted on June 22, 2023.
• Tzuo exercised options to acquire 239,198 shares of Class B Common Stock at an exercise price of $3.04.
• Concurrently, Tzuo sold 239,198 shares of Class A Common Stock at a weighted average price of $9.441, with prices ranging from $9.00 to $9.97.
• Following these transactions, Tzuo directly owns 6,352 shares of Class A Common Stock and 1,084,485 shares of Class B Common Stock.
• Tzuo also indirectly owns 7,256,203 shares of Class A Common Stock through the 70 Thirty Trust and 640,542 shares through The Next Left Trust, where he serves as trustee.
• The CEO intends to use the majority of the net proceeds from the sale of these shares of Zuora Class A Common Stock to fund future exercise(s), via exercise-and-hold transaction(s), of his outstanding stock option that expires on November 18, 2024 to acquire Zuora Class B Common Stock.

Sentiment

Score: 6

Explanation: Neutral sentiment as the transactions are part of a pre-arranged plan and do not necessarily indicate a change in the CEO's outlook on the company.

Positives

• The CEO's exercise of stock options demonstrates confidence in the company's future.
• The use of a 10b5-1 trading plan ensures transparency and avoids accusations of insider trading.
• The CEO intends to use the majority of the net proceeds from the sale of these shares of Zuora Class A Common Stock to fund future exercise(s), via exercise-and-hold transaction(s), of his outstanding stock option that expires on November 18, 2024 to acquire Zuora Class B Common Stock.

Negatives

• The sale of shares by the CEO could be interpreted negatively by some investors, although it is part of a pre-arranged plan.

Risks

• Market fluctuations could impact the value of the remaining shares held by the CEO.
• Future transactions by the CEO could further influence the stock price.

Future Outlook

The CEO may continue to execute transactions under the 10b5-1 trading plan. The CEO intends to use the majority of the net proceeds from the sale of these shares of Zuora Class A Common Stock to fund future exercise(s), via exercise-and-hold transaction(s), of his outstanding stock option that expires on November 18, 2024 to acquire Zuora Class B Common Stock.

Industry Context

Executives commonly use 10b5-1 trading plans to sell company stock, providing a structured and transparent approach to avoid insider trading concerns. This filing is a routine disclosure of such activity.

Comparison to Industry Standards

• The use of 10b5-1 trading plans is a standard practice among publicly traded companies, including competitors like Salesforce and Oracle, to allow executives to manage their personal finances without raising insider trading concerns.
• The size of the transaction is relatively small compared to the overall market capitalization of Zuora and the typical trading volume of its shares.
• Executive compensation structures often include stock options, aligning management's interests with those of shareholders, similar to practices at companies like HubSpot and Adobe.

Stakeholder Impact

• The transactions could have a minor impact on shareholders due to the potential dilution from the exercise of stock options and the sale of shares.
• The use of a 10b5-1 plan provides transparency to stakeholders.

Next Steps

• Monitor future filings for any further transactions by the CEO or other insiders.
• Track the CEO's exercise of his outstanding stock option that expires on November 18, 2024.

Key Dates