held by SunEdison upon completion of our IPO until the earlier of (i) three years from the completion of the IPO and (ii) the date that Terra LLC has made cash distributions in excess of the Third Target Distribution (as defined in Terra LLC’s amended and restated operation agreement) for four quarters (“Class B Share Lock Up”). However, such limitations may not be enforceable against foreclosures or transfers occurring in connection with the SunEdison Bankruptcy, including foreclosures by the lenders under SunEdison’s DIP financing.
Because SunEdison owns a majority of the combined voting power of our common stock, the occurrence of an event of default, foreclosure, and a subsequent sale of all, or substantially all, of the shares of Class A common stock received upon foreclosure of any pledged securities could result in a change of control. SunEdison, through its wholly owned subsidiary, SunEdison Holdings Corporation, owns 48,202,310 Class B units of Terra LLC, which are exchangeable (together with shares of our Class B common stock) for shares of our Class A common stock.
See “Item 1. Business-Recent Developments-Business Update-SunEdison Bankruptcy”, “Item 1A. Risk Factors-Risks Related to our Relationship with SunEdison and the SunEdison Bankruptcy” and other disclosures in this annual report for additional information relating to the SunEdison Bankruptcy.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information with respect to all of our equity compensation plans as of December 31, 2016:
Number of Securities to be
Issued Upon Exercise of
Warrants and Rights (1)
Exercise Price of
Warrants and Rights (2)
Number of Securities
Remaining Available for
Future Issuance under
Plans (Excluding Securities
Reflected in Column (a))(1)
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Number of shares is subject to adjustment for changes in capitalization for stock splits, stock dividends and similar events.
Weighted average exercise price of outstanding options; excludes restricted stock units and performance-based restricted stock units.
These shares are currently issuable under the TerraForm Power, Inc. 2014 Second Amended and Restated Long-Term Incentive Plan.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
POLICIES AND PROCEDURES FOR RELATED PARTY TRANSACTIONS
As provided by our corporate governance and conflicts committee charter adopted in connection with our initial public offering, our corporate governance and conflicts committee is responsible for reviewing and recommending to the Board whether to approve in advance any material related party transactions between us and SunEdison or its affiliates. The members of our corporate governance and conflicts committee determine whether to recommend a related party transaction in the exercise of their fiduciary duties as directors.
See Item 15, Note 20 Related Parties to our consolidated financial statements included in this Annual Report on Form 10-K for information regarding certain relationships and related party transactions, including those with SunEdison, which disclosures are incorporated herein by reference.
We believe Messrs. Compton, Dayha, Fong, Hall, Pauker, Rosenberg and Stark and Ms. Fox qualify as independent directors according to the rules and regulations of the SEC and the NASDAQ. See Item 10. Directors, Executive Officers and Corporate Governance - Corporate Governance and Board Matters for additional information regarding director independence.