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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 07/21/2017
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For so long as Brookfield or another entity controls greater than 50% of the total outstanding voting power of our common stock, we will be considered a “controlled company” for the purposes of the NASDAQ Global Select Market listing requirements. As a “controlled company,” we are permitted to opt out of the NASDAQ Global Select Market listing requirements that require (i) a majority of the members of our Board to be independent, (ii) that we establish a compensation committee and a nominating and governance committee, each comprised entirely of independent directors and (iii) an annual performance evaluation of the nominating and governance and compensation committees. Following the completion of the Sponsorship Transaction, we may rely on exceptions with respect to having a majority of independent directors, establishing a compensation committee or nominating committee and annual performance evaluations of such committees. Brookfield or its affiliates may sell part or all of its stake in the Company which could result in a loss of the “controlled company” exemption under the NASDAQ Global Select Market rules. We would then be required to comply with those provisions of the NASDAQ Global Select Market on which we currently or in the future may rely upon exemptions.

Following the Sponsorship Transaction, Brookfield and its affiliates will control the Company and have the ability to designate a majority of the members of the Company’s Board.

The governance agreements to be entered into between the Company and Brookfield and its affiliates in connection with the Sponsorship Transaction provide affiliates of Brookfield the ability to designate a majority of our Board to our Corporate Governance and Nominations Committee for nomination for election by our stockholders. Due to such agreements and Brookfield and its affiliates' approximate 51% interest in the Company, the ability of other holders of our Class A common stock to exercise control over the corporate governance of the Company will be limited. In addition, due to its approximate 51% interest in the Company, Brookfield and its affiliates will have a substantial influence on our affairs and its voting power will constitute a large percentage of any quorum of our stockholders voting on any matter requiring the approval of our stockholders. As discussed in the risk factor entitled “If we consummate the Sponsorship Transaction, we will be a “controlled company,” controlled by Brookfield and its affiliates, whose interest in our business may be different from ours or other holders of our Class A common stock above, Brookfield and its affiliates may hold certain interests that are different from ours or other holders of our Class A common stock and there is no assurance that Brookfield and its affiliates will exercise its control over the Company in a manner that is consistent with our interests or those of the other holders of our Class A common stock.

SunEdison may retain a large percentage of the shares of Class A common stock not owned by Brookfield and its affiliates and this ownership stake may cause SunEdison to have interests and incentives that are different than those of Brookfield or other holders of Class A Common stock.

In connection with the Sponsorship Transaction, SunEdison will convert its shares of our Class B common stock into shares of our Class A common stock on a one-to-one basis. In addition, immediately prior to the closing of the Merger, we will issue certain additional shares of our Class A common stock to SunEdison. Following these transactions, SunEdison may choose to retain a large percentage of the shares of our Class A common stock not owned by Brookfield and its affiliates. This concentration of ownership may reduce the liquidity of our Class A common stock and may also have the effect of delaying or preventing a future change in control of our company or discouraging others from making tender offers for our shares, which could depress the price per share a bidder might otherwise be willing to pay. Currently, however, through its plan of reorganization and a rights offering it is conducting in connection with its plan of reorganization, SunEdison is proposing to distribute or issue approximately 90% of the Class A common stock that SunEdison will hold following the closing of the Merger to its creditors. If SunEdison consummates its plan of reorganization and rights offering or otherwise liquidates a large number of shares of our Class A common stock, it may have the effect of reducing the trading price of our Class A common stock.

There can be no assurance that the Company will pay dividends or the amount of any dividends that are paid following a successful completion of the Sponsorship Transaction.

The amount of any dividends that are paid following a successful consummation of the Sponsorship Transaction is subject to a number of uncertainties, including the amount of cash available for distribution generated by our business. There can be no assurance that our business will perform as we expect, or as the market expects, following the consummation of the Sponsorship Transaction and the amount of dividends we pay, if any, may be limited by our performance and growth. The decision to pay any dividend, and the amount of any such dividend paid is subject to the discretion of our Board who may choose to limit the amount of any dividends paid following the successful consummation of the Sponsorship Transaction.

The Sponsorship Transaction would trigger “change in control” provisions under certain of the Company’s material contracts.



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