10/31/2024 | Press release | Distributed by Public on 10/31/2024 15:24
Filed by the Registrant ☒
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Filed by a party other than the Registrant ☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.
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Could the trading price of Zuora's stock at closing impact the $10 per share transaction price?
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All ZEOs who are stockholders of Zuora will receive $10.00 in cash for each share of Zuora stock that such ZEO owns upon closing of the transaction, regardless of the price at which Zuora's stock is trading.
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What happens to the stock we purchased through the ESPP if we purchase it for more than $10?
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The common stock you purchased through ESPP is just that - common stock.ZEOs who own shares of Zuora's common stock will receive $10.00 in cash for each share of Zuora common stock that is owned upon closing of the transaction regardless of Zuora's common stock price at close.
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The tax treatment of the common stock you purchase through the ESPP will depend on your individual circumstances and how long you have held the shares of common stock.
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What are the tax implications of selling common stock? What are the tax implications of unvested RSUs converting into unvested cash payment rights post-close?
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The sale of shares of Zuora common stock (including shares received in settlement of vested RSUs) at closing (or prior to close during an open trading window) will be taxed the same as they have always been taxed (short or long term capital gains/losses, depending on your individual circumstances and how long you have held the shares).
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The conversion of unvested RSUs into a future right to receive cash if the applicable vesting conditions for the corresponding RSUs are met is not a taxable event.
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When these cash payment rights are paid following vesting, they will be taxed as ordinary income and will be subject to applicable withholding.
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Zuora cannot advise on the individual tax implications of these transactions and recommends discussing the impact with a financial planner and/or tax attorney.
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What financial resources are available to ZEOs to help us better understand our equity compensation?
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E*Trade has numerous resources available to you on equity compensation (articles and videos). Log in and go to At Work > Learning Center > Work & Money > Equity
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You can also review Treatment of Zuora Equity in Connection with the Transaction for additional information.
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How can we track the unvested stock schedule following the closing of the transaction?
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Following close, there will be no unvested equity awards as Zuora will no longer be a publicly traded company. Details about what happens to unvested RSUs, stock options, and PSUs can be found elsewhere in the FAQs. Details about tracking unvested cash payment rights that the unvested RSUs will convert into at close will be shared closer to close.
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Will payments for vested cash payment rights converted from RSUs come directly in paychecks?
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Following close, unvested RSUs will convert to a future right to receive cash if the applicable vesting conditions for the corresponding RSUs are met. When the cash payments for vested payment rights are paid following vesting, they will be paid via paycheck and taxed as ordinary income. All transactions are subject to taxes and withholdings. Zuora cannot advise on the individual tax implications of these transactions and recommends discussing the impact with a financial planner and/or tax advisor.
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Will our total compensation be reevaluated to offset benefits like equity, including RSUs and ESPP?
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Zuora remains committed to providing competitive compensation that is aligned with company performance. The form will be different as a private company, but the philosophy stays the same: to provide a comprehensive and compelling total rewards offering that attracts and rewards top talent to drive Zuora's strategy forward.
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Is there any impact on our current promotion cycle?
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We anticipate there will be no negative impact to the current promotion cycle.
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Is anything going to change with our benefits tied to open enrollment in the US?
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Open enrollment in the US is happening as planned. Details around calendar year 2025 benefits were shared the week of October 28th with Open Enrollment launching the week of November 4th.
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Will we still have quarterly earnings?
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Before the acquisition transaction closes, we will still share our quarterly earnings report as planned in a press release, but we will no longer hold earnings calls to discuss the results.
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When the transaction closes, Zuora will no longer be listed on the New York Stock Exchange (NYSE) and will become a privately held company. At that point, Zuora will no longer share quarterly earnings reports publicly or hold quarterly earnings calls.
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What's the implication of Tien retaining his ownership in Zuora? Does it mean he retains the same control over Zuora post-acquisition?
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Today and prior to the transaction closing, Tien holds approximately 38% of the voting power of the Company and beneficially owns about 6.4% of Zuora's common stock.
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After the transaction closes and when we become a privately held company, he will be a minority shareholder alongside Silver Lake and GIC.
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What does this transaction mean for ZEOs?
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While our ownership structure may be changing, our core mission, strategy, values and culture are not.
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Following transaction close, Zuora will continue to be headquartered in Redwood City and led by Tien.
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Silver Lake and GIC recognize that our people are the foundation of our success, and they are committed to helping us maintain our ZEO culture, where all ZEOs are empowered to own our outcomes, make unique contributions and thrive.
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It is still early days, and there are still a number of steps between now and transaction close, which we expect will occur in the first calendar quarter of 2025.
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Until then, there are no changes to our day-to-day operations.
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We are counting on you to stay focused on creating an unparalleled experience for our customers and supporting each other.
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Why are we going private? Why now?
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Zuora's success is built on always being one step ahead.
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We led the global shift to the Subscription Economy, providing mission-critical technology that companies need to foster recurring relationships, drive recurring revenue and achieve recurring growth.
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Today, it is no longer enough to simply have one approach to monetization - companies need to align and evolve their business to the needs of buyers.
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This requires a dynamic mixed-model approach, which our end-to-end monetization suite uniquely powers.
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Doing so requires long-term focus on the needs of our customers and the flexibility to invest in the critical areas that will unlock long-term growth.
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We operate in a dynamic and sometimes challenging environment, and as a private company, we will be better positioned to enhance the products and services we provide to our customers.
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Who are Silver Lake and GIC? Why are they the right partners for Zuora?
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Silver Lake is a global technology investment firm with offices in North America, Europe and Asia. The firm is well known for their portfolio of notable tech companies that include Dell, GoDaddy and Motorola.
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GIC is a leading global investment firm headquartered in Singapore that takes a long-term, disciplined approach to investing and is uniquely positioned across a wide range of asset classes and active strategies globally.
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We are confident that Silver Lake and GIC are the right partners to help us capture the huge opportunities we see ahead in the market.
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Silver Lake and GIC have a proven track record helping technology companies like ours achieve tremendous, durable growth, and they bring invaluable industry expertise to support us on our ambitious goals.
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Silver Lake knows our team and our business well, having been an investor in Zuora since 2022. Their belief in our strategy, people and growth potential is evident - they want us all to win together.
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We view this transaction as an expansion of our long-standing partnership, one which will allow us to benefit from their additional focus and support as we continue delivering on our strategic priorities.
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Will my role or reporting structure be impacted? Will there be changes to my day-to-day responsibilities?
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Today, nothing is changing, and our work and focus continue on as they did before this announcement.
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Between now and transaction close, we are counting on you to stay focused on creating an unparalleled experience for our customers and supporting each other.
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When will the transaction be completed?
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We expect the transaction to close in the first calendar quarter of 2025, subject to customary closing conditions and approvals, including approval by Zuora stockholders and regulatory approvals.
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Will this announcement have any impact on our compensation or benefits?
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While we are excited to have reached this agreement, this announcement is only the first step in the process of becoming a private company.
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Today, nothing is changing, and our work and focus continue on as they did before this announcement.
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Will this announcement have any impact on the Corporate Bonus plan? What about for ZEOs who receive their bonus as 50% cash and 50% RSUs?
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The final FY25 bonus payment will reflect our performance against our annual goals.
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This payment may be paid in cash for everyone depending on the timing of when this transaction closes.
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Will there be any changes to the Zuora name and brand?
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Will Zuora's headquarters change? Will we have to relocate?
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Who will lead the company following close?
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I own shares of Zuora stock. What happens to my shares when we become a private company?
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What happens to my unvested equity awards prior to closing?
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What happens to my vested and unvested equity awards at closing?
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Upon the closing of the transaction, stock options then outstanding (whether or not vested and exercisable) with a per share exercise price below $10.00 will be canceled and in exchange for such stock option, the stock option holder will be entitled to receive an amount in cash equal to the excess of $10.00 over the stock option exercise price for each share of Zuora stock under the canceled option immediately prior to closing, subject to any required tax withholdings. Such amounts will be paid no later than the first regularly scheduled payroll date that occurs at least five business days following closing. Any stock options (whether or not vested and exercisable) with an exercise price that is equal to or greater than $10.00 per share will be canceled for no consideration.
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Upon the closing of the transaction, each Zuora restricted stock unit (RSU) award then outstanding will be canceled in exchange for the right to receive an amount in cash equal to $10.00 multiplied by the number of shares of unvested Zuora stock underlying such award immediately prior to closing. This is subject to any withholdings, and such amount will vest and become payable in accordance with the existing vesting schedule applicable to the corresponding restricted stock unit award.
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Upon the closing of the transaction, each Zuora performance stock unit (PSU) award then outstanding that has been earned as of the closing in accordance with its terms will be canceled in exchange for the right to receive an amount in cash equal to $10.00 multiplied by the number of shares of Zuora stock underlying such award immediately prior to closing (with the number of shares of Zuora stock subject to any such award determined in accordance with the terms of the applicable award agreement), subject to any required tax withholdings and such amount will vest and become payable in accordance with the vesting schedule and conditions applicable to the corresponding performance stock unit award.
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What will happen to the Zuora employee stock purchase plan (ESPP)?
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Going forward, no new offering or purchase period under the ESPP will commence, no new participants will be permitted to enter the ESPP and existing participants will not be allowed to increase or decrease their elections. The exercise date for the current offering or purchase period will be separately communicated to you but will be no later than December 16th.
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Any shares purchased under the ESPP will be exchanged at closing for the right to receive $10.00 in cash.
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As a ZEO, can I continue to buy and sell Zuora stock until close?
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Yes, provided you comply with Zuora's Insider Trading Policy, including trading only in open trading windows.
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We are currently in a closed trading window that is estimated to open in early December.
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Until close, we will continue to operate as a public company.
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ZEOs that have material information that is not publicly disclosed remain subject to all trading windows and restrictions until the acquisition closes.
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If you have any questions about your trading ability, please contact [email protected].
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What are the next steps in this process?
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The transaction is expected to close in the first calendar quarter of 2025, subject to customary closing conditions and approvals, including approval by Zuora stockholders and regulatory approvals.
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Until then, we remain a publicly traded company, and there will be no changes to our day-to-day operations.
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Your roles and responsibilities remain unchanged, and the best thing we can do is stay focused on creating an unparalleled experience for our customers and supporting each other.
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What should I tell customers / partners / other external stakeholders who ask me about the transaction?
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You can tell them it is business as usual at Zuora as we work to complete this transaction, and they should see no changes to the way we work together.
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We remain focused on helping companies evolve and adapt their business through a diverse and dynamic mix of revenue models.
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Zuora has financial strength and, in partnership with Silver Lake and GIC, we will continue enhancing our capabilities and further building out our monetization suite, ultimately making us an even stronger partner.
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Should they have specific questions about what this announcement means for them, please submit them via the Ask Questions feature.
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