Washington, D.C. 20549
Notice of Special Meeting of Stockholders
Dear Stockholders:
You are cordially invited to attend the special meeting of stockholders (the “Special Meeting”) of Bloom Energy Corporation, a Delaware
corporation (the “Company” or “Bloom Energy”). The Special Meeting will be a virtual meeting, which will be conducted via webcast.
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Date and Time
June 16, 2020
1:00 p.m. Pacific Time
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Location
Online at www.virtualshareholdermeeting.com/BE2020SM
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Who Can Vote
Only stockholders of record as of the close of business on May 12, 2020 are entitled to notice of, and to vote at, the meeting and any adjournments, continuations or postponements thereof.
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How to Vote
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Internet
www.proxyvote.com
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Telephone
1-800-690-6903
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Mail
Mark, sign, date and promptly mail the enclosed proxy card in the postage-paid envelope
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Voting Items
Proposals to be voted on at the Special Meeting:
Proposal
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Board Vote
Recommendation
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For Further
Details
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1. To approve, in accordance with Section 312.03 of the New York Stock Exchange (“NYSE”) Listed Company Manual, the full settlement of
conversions in Class B common stock of the Company’s 10.0% Convertible Senior Secured Notes due 2021.
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FOR
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Page 10
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2. To approve, in accordance with Section 312.03 of the NYSE Listed Company Manual, the full settlement of conversions in Class B common stock of
the Company’s 10.0% Convertible Senior Secured Notes due 2021 held by New Enterprise Associates 10, Limited Partnership, KPCB Holdings, Inc. and Foris Ventures, LLC.
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FOR
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Page 12
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3. To approve, in accordance with Section 312.03 of the NYSE Listed Company Manual, the full settlement of conversions in Class B common stock of
the Company’s Amended and Restated Subordinated Secured Convertible Note held by Constellation NewEnergy, Inc.
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FOR
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Stockholders will also transact any other business that may be properly brought before the Special Meeting or any adjournment,
continuation or postponement thereof.
The foregoing proposals are more fully described in the Proxy Statement accompanying this Notice.
Your vote as a Bloom Energy stockholder is very important. Holders of Class A common stock are entitled to one
vote per share. Holders of Class B common stock are entitled to ten votes per share. If you are a registered holder and have questions regarding your stock ownership, you may contact our transfer agent, American Stock Transfer & Trust Company,
through their website at www.astfinancial.com or by phone at 1-800-937-5449.
By Order of the Board of Directors
Shawn M. Soderberg
Executive Vice President, General Counsel and Secretary
San Jose, California
May 15, 2020
All stockholders of record as of the close of business on May 12, 2020 may attend the Special Meeting virtually as described in this Notice. Whether
or not you expect to attend the Special Meeting, we encourage you to read the Proxy Statement and vote through the Internet or by telephone or request and submit your proxy card as soon as possible so that your shares may be represented at the
meeting.
THE PROXY STATEMENT AND PROXY CARD ARE FIRST BEING MAILED TO STOCKHOLDERS ON OR ABOUT MAY 15, 2020.
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General Proxy Information
This proxy statement (the “Proxy Statement”) is being furnished to the stockholders of Bloom Energy Corporation, a Delaware corporation (the
“Company”, “Bloom”, “we”, “us” or “our”), in connection with the solicitation of proxies by our Board of Directors (the “Board of Directors” or the “Board”) for use at our special meeting of stockholders (the “Special Meeting”). The Special Meeting
will be held on Tuesday, June 16, 2020, at 1:00 p.m. PT, local time and at any and all adjournments, postponements or continuations of the meeting. The Special Meeting will be a virtual meeting, which will be conducted via webcast. You will be able
to attend the Special Meeting by going to the following web address: www.virtualshareholdermeeting.com/BE2020SM.
Questions and Answers about this Proxy Material and Voting
Availability of Proxy Materials
At the close of business on May 12, 2020 (the “Record Date”), there were 94,000,981 shares of the Company’s Class A common stock
and 31,164,901 shares of the Company’s Class B common stock outstanding and entitled to vote. The Class A common stock and the Class B common stock are collectively referred to as the Common Stock in this Proxy Statement. The Proxy Statement and
Proxy Card are first being mailed to stockholders on or about May 15, 2020. The Proxy Statement is also available at www.proxyvote.com. We will also provide to any stockholder without charge, upon written or oral request, a copy of our Proxy
Statement. Requests should be directed to Bloom Energy Corporation, 4353 North First Street, San Jose, California 95134, Attention: Corporate Secretary, or by calling (408) 543-1500.
Attendance and Participation
Our virtual Special Meeting will be conducted on the Internet via webcast. You will be able to participate online and submit your
questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/BE2020SM. Stockholders will be able to vote their shares electronically during the Special Meeting. Only stockholders of record at the close of business on the
Record Date will be entitled to vote at the Special Meeting.
To participate in the Special Meeting, you will need the 16-digit control number included on your proxy card or in the
instructions that accompanied your proxy materials. The Special Meeting will begin promptly at 1:00 p.m. Pacific Time. We encourage you to access the Special Meeting prior to the start time.
The virtual Special Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome and Safari) and
devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong Internet connection wherever they intend to participate in the Special Meeting.
Participants should also allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Special Meeting.
Who can vote at the Special Meeting?
Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Special Meeting. A list of
stockholders entitled to vote at the meeting will be available for inspection by any stockholder at 4353 North First Street, San Jose, California 95134 between the hours of 9:00 a.m. and 5:00 p.m. local time, for at least ten days prior to the
meeting. In addition, the list of stockholders will be available on the bottom panel of your screen during the meeting at www.virtualshareholdermeeting.com/BE2020SM when you enter your 16-digit control number.
How can I vote my shares at the Special Meeting?
The Special Meeting will be held entirely online. Stockholders may participate in the Special Meeting by visiting the following
website: www.virtualshareholdermeeting.com/BE2020SM. To vote your shares at the Special Meeting, you will need the 16 digit control number included on your proxy card or in the instructions that accompanied your proxy materials. Shares held in your
name as the stockholder of record may be voted electronically during the Special Meeting. Shares for which you are the beneficial owner but not the stockholder of record also may be voted electronically during the Special Meeting. However, even if
you plan to attend the Special Meeting, the Company recommends that you vote your shares in advance, so that your vote will be counted if you later decide not to attend the Special Meeting.
How can I vote my shares without attending the Special Meeting?
To vote your shares without attending the Special Meeting, please follow the instructions for Internet or telephone voting on your
proxy card or in the instructions that accompanied your proxy materials. You may also vote by signing and submitting your proxy card and returning it by mail, if you are the stockholder of record, or by signing the voter instruction form provided
by your bank or broker and returning it by mail, if you are the beneficial owner but not the stockholder of record. This way your shares will be represented whether or not you are able to attend the Special Meeting.
What will I need in order to attend the Special Meeting?
You are entitled to attend the virtual Special Meeting only if you were a stockholder of record at the close of business on the Record Date or
you hold a valid proxy. You may attend the Special Meeting, vote, and submit a question during the Special Meeting by visiting www.virtualshareholdermeeting.com/BE2020SM and using your 16-digit control number to enter the meeting. If you are not a
stockholder of record but hold shares as a beneficial owner in street name, you may be required to provide proof of beneficial ownership, such as your most recent account statement as of the Record Date, a copy of the voting instruction form
provided by your broker, bank, trustee or nominee, or other similar evidence of ownership. If you do not comply with the procedures outlined above, you will not be admitted to the virtual Special Meeting.
Questions
Stockholders may submit questions during the Special Meeting. If you wish to submit a question, you may do so by logging into the
virtual meeting platform at www.virtualshareholdermeeting.com/BE2020SM, typing your question into the “Ask a Question” field, and clicking “Submit.”
Questions pertinent to the Special Meeting will be answered during the Special Meeting, subject to time constraints. Additional
information regarding the ability of stockholders to ask questions during the Special Meeting, related rules of conduct and other materials for the Special Meeting will be available at www.proxyvote.com.
How many votes do I have?
You have one vote for each share of Class A common stock and ten votes for each share of Class B common stock you owned as of the
close of business on the Record Date. The holders of Class A common stock and Class B common stock will vote together on each matter presented at the Special Meeting.
How does the Company’s dual class structure affect me?
Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock
collectively control a majority of the combined voting power of our Common Stock.
The Class B common stock is convertible into Class A common stock at any time at the option of the holder. In addition, the Class
B common stock will automatically convert into Class A common stock immediately prior to the close of business on the fifth anniversary of our initial public offering (July 2023), and may automatically convert earlier than such date upon certain
circumstances as described in our Certificate of Incorporation.
What am I voting on?
You are being asked to vote on the following:
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To approve, in accordance with Section 312.03 of the New York Stock Exchange (“NYSE”) Listed Company Manual, the full settlement of conversions in Class B common stock of the
Company’s 10.0% Convertible Senior Secured Notes due 2021;
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To approve, in accordance with Section 312.03 of the NYSE Listed Company Manual, the full settlement of conversions in Class B common stock of the Company’s 10.0% Convertible
Senior Secured Notes due 2021 held by New Enterprise Associates 10, Limited Partnership, KPCB Holdings, Inc. and Foris Ventures, LLC;
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To approve, in accordance with Section 312.03 of the NYSE Listed Company Manual, the full settlement of conversions in Class B common stock of the Company’s Amended and Restated
Subordinated Secured Convertible Note held by Constellation NewEnergy, Inc.; and
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Any other business as may properly come before the Special Meeting or any adjournment, continuation or postponement thereof.
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How does the Board of Directors recommend I vote on these proposals?
The Company’s Board unanimously recommends that you vote “FOR” the full settlement of conversions in Class B common stock of the
Company’s 10.0% Convertible Senior Secured Notes due 2021, “FOR” the full settlement of conversions in Class B common stock of the Company’s 10.0% Convertible Senior Secured Notes due 2021 held by New Enterprise Associates 10, Limited Partnership,
KPCB Holdings, Inc. and Foris Ventures, LLC and “FOR” the full settlement of conversions in Class B common stock of the Company’s Amended and Restated Subordinated Secured Convertible Note held by Constellation NewEnergy, Inc.
How do I vote my shares?
Stockholder of Record: Shares Registered in Your Name
If on May 12, 2020 your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, then
you are considered the stockholder of record with respect to those shares. As a stockholder of record, you must enter the 16-digit control number found on your proxy card to vote in advance of or during the Special Meeting, or vote by proxy over
the telephone, through the Internet, or by using a proxy card that you may request or that we may elect to deliver to you at a later time. The method you use to vote will not limit your right to vote at the Special Meeting. Whether or not you plan
to attend the Special Meeting, we urge you to submit your proxy in advance. You may still attend the meeting and vote electronically during the Special Meeting even if you have already voted by proxy.
To vote through the Internet: Go to www.proxyvote.com to complete an electronic proxy card. You will be
asked to provide the control number from your proxy card. Your Internet vote must be received by 11:59 p.m. Eastern Time on June 15, 2020, to be counted.
To vote by telephone: Dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded
instructions. You will be asked to provide the control number from your proxy card. Your telephone vote must be received by 11:59 p.m. Eastern Time on June 15, 2020, to be counted.
To vote by mail: You may complete, sign and return the accompanying proxy card in the postage-paid
envelope provided. If you return your signed proxy card to us and we receive it before the Special Meeting, we will vote your shares as you direct.
To vote in person: Attend the virtual Special Meeting by visiting
www.virtualshareholdermeeting.com/BE2020SM, and vote your shares electronically during the Special Meeting.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If on May 12, 2020 your shares were held in an account with a brokerage firm, bank or other nominee, then you are the beneficial
owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee how to vote the shares held in your account. However, the organization that holds your shares is considered the stockholder of record for
purposes of voting at the meeting. Because you are not the stockholder of record, you may not vote your shares at the Special Meeting unless you request and obtain a valid proxy from the organization that holds your shares giving you the right to
vote the shares at the meeting. You should have received a voting instruction card and voting instructions with these proxy materials from your brokerage firm, bank or other agent rather than from us. Simply complete and mail the voting instruction
card to ensure that your vote is counted. Internet or telephonic voting may also be available; however, that will depend on the voting process of your broker, bank or other nominee. Please see your voting instruction card for further details.
How will my shares be voted if I return a blank proxy card?
If you return a signed and dated proxy card or otherwise submit a proxy without indicating voting
selections, your shares will be voted, as applicable, “FOR” the full settlement of conversions in Class B common stock of the Company’s 10.0% Convertible Senior Secured Notes due 2021, “FOR” the full settlement of conversions in Class B common
stock of the Company’s 10.0% Convertible Senior Secured Notes due 2021 held by New Enterprise Associates 10, Limited Partnership, KPCB Holdings, Inc. and Foris Ventures, LLC and “FOR” the full settlement of conversions in Class B common stock of
the Company’s Amended and Restated Subordinated Secured Convertible Note held by Constellation NewEnergy, Inc. If any other matter is properly
presented at the Special Meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
How will my shares be voted if I do not provide my broker or bank with voting instructions, and what is a “broker non-vote”?
If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank, or other nominee how to
vote your shares, your broker, bank, or other nominee may still be able to vote your shares in its discretion on certain matters. Brokers, banks, and other securities intermediaries may use their discretion to vote your “uninstructed” shares with
respect to matters considered to be “routine,” but not with respect to “non-routine” matters. In this regard, all of the proposals described herein are considered to be “non-routine,” meaning that your broker may not vote your shares on these
proposals in the absence of your voting instructions. Therefore, there will be no broker non-votes.
If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer,
you must provide voting instructions to your broker, bank, or other nominee by the deadline provided in the materials you receive from your broker, bank, or other nominee.
How many votes are needed to approve the proposal?
Proposal 1: The approval of the full settlement of conversions in Class B common stock
of the Company’s 10.0% Convertible Senior Secured Notes due 2021 requires the affirmative vote of a majority of votes cast at the Special Meeting. An abstention will be counted as a vote cast at the Special Meeting for purposes of the proposal and
will have the same effect as a vote against the proposal.
Proposal 2: The approval of the full settlement of conversions in Class
B common stock of the Company’s 10.0% Convertible Senior Secured Notes due 2021 held by New Enterprise Associates 10, Limited Partnership, KPCB Holdings, Inc. and Foris Ventures, LLC requires the affirmative vote of a majority of votes cast at the
Special Meeting. An abstention will be counted as a vote cast at the Special Meeting for purposes of the proposal and will have the same effect as a vote against the proposal.
Proposal 3: The approval of the full settlement of conversions in Class B common stock of
the Company’s Amended and Restated Subordinated Secured Convertible Note held by Constellation NewEnergy, Inc. requires the affirmative vote of a majority of votes cast at the Special Meeting. An abstention will be counted as a vote cast at the
Special Meeting for purposes of the proposal and will have the same effect as a vote against the proposal.
Who is making this solicitation?
The Company’s Board is soliciting these proxies and the cost of such solicitation will be borne by the Company, including the
charges and expenses of persons holding shares in their name as nominee incurred in connection with forwarding proxy materials to the beneficial owners of such shares. In addition to the use of the mail, proxies may be solicited by our officers,
directors and employees in person, by telephone or by email. Those individuals will not be additionally compensated for the solicitation but may be reimbursed for reasonable out-of-pocket expenses incurred in connection with the solicitation.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid Special Meeting. Our Bylaws provide that a quorum will be present if a
majority of the voting power of all shares outstanding on the Record Date are represented at the Special Meeting, present in person or by proxy. Your shares will be counted toward the quorum only if you submit a valid proxy or vote at the Special
Meeting, or if you are a beneficial owner of shares held in street name, if you submit your voting instructions. Abstentions will be counted as shares present for the purposes of determining the presence of a quorum.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts.
Please complete, sign and return each proxy card to ensure that all of your shares are voted.
Can I change my vote or revoke my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the Special Meeting. You may revoke your proxy in any one of
following ways:
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You may submit another properly completed proxy card with a later date but before the submission deadline for the Special Meeting.
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You may grant a subsequent proxy by telephone or through the Internet.
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You may send a written notice that you are revoking your proxy to the Corporate Secretary of the Company at 4353 North First Street, San Jose, California 95134. The notice will be
considered timely if it is received at the indicated address by the close of business on the business day immediately preceding the date of the Special Meeting.
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You may attend the virtual Special Meeting and vote electronically during the Special Meeting. However, simply attending the Special Meeting will not, by itself, revoke your proxy.
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Your most recently submitted proxy card or telephone or internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker, bank, or other nominee, you may change your vote by submitting new voting instructions to
your bank, broker or other nominee. If you hold shares through a broker, bank or other nominee and wish to vote your shares at the Special Meeting, you will need your unique control number which appears on the instructions that accompanied the
proxy materials.
Tabulation
Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspector of election at the Special Meeting.
How can I find out the results of the voting at the Special Meeting?
We intend to announce preliminary voting results at the Special Meeting and publish final results in a Current Report on Form 8-K
to be filed with the Securities and Exchange Commission (“SEC”) within four business days of the Special Meeting.
What is “householding” and how does it affect me?
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, we send only one proxy statement to
eligible stockholders who share a single address, unless we have received instructions to the contrary from any stockholder at that address. This practice is designed to reduce our printing and postage costs. Stockholders who participate in
householding will continue to receive separate proxy cards. We do not use householding for any other stockholder mailings.
If you share an address with another stockholder and receive only one set of proxy materials but would like to request a separate copy of these
materials, please contact our mailing agent, Broadridge, by calling 1-800-540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717. Broadridge is acting as our mailing agent and vote tabulator and is
not soliciting proxies on our behalf. Similarly, you may also contact Broadridge if you receive multiple copies of the proxy materials and would prefer to receive a single copy in the future. If you own shares through a bank, broker or other
nominee, you should contact the nominee concerning householding procedures.
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Proposal 1
Stockholders are being asked to approve, in accordance with Section 312.03 of the NYSE Listed Company Manual, the full settlement of
conversions in Class B common stock of the Company’s 10.0% Convertible Senior Secured Notes due 2021.
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The Board of Directors unanimously recommends a vote FOR this proposal.
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Overview
On April 20, 2020, we entered into an Amended and Restated Indenture (the “Amended Indenture”) governing our outstanding
10.0% Convertible Senior Secured Notes due 2021 (the “Convertible Notes”). The Convertible Notes amended and replaced our outstanding 6.0% Convertible Notes due 2020 (the “6.0% Convertible Notes”). Pursuant to the Amended Indenture, among
other things, we:
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increased the interest rate from 6.0% to 10.0% per annum, payable in cash;
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extended the maturity date from December 1, 2020 to December 1, 2021;
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amended the conversion price from $11.25 to $8.00, representing an initial conversion rate of 125.0000 shares of Class B common stock per $1,000 principal amount of the
Convertible Notes (subject to customary adjustments);
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added covenants relating to, among other things, the redemption of the Convertible Notes with the proceeds of certain transactions (including equity and debt
financings or sales of intellectual property), repayment of outstanding indebtedness, liens on intellectual property and restricted payments and a provision requiring K.R. Sridhar to remain as our Chief Executive Officer unless caused by
illness, incapacity or death; and
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released certain collateral securing the Convertible Notes, specifically, certain operation and maintenance service contracts entered into by us.
In addition, as described in Proposal 2, certain affiliated investors purchased $30 million of new Convertible Notes,
which increased the aggregate principal amount of the Convertible Notes from $289.0 million to $319.0 million.
Stockholders are urged to read the Amended Indenture, which was filed with the SEC as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 11, 2020 and is incorporated
by reference in this Proxy Statement.
Because our Class A common stock is listed on the NYSE, we are subject to NYSE’s rules and regulations. Rule 312.03(c) of
the NYSE Listed Company Manual (“NYSE Rule 312.03(c)”) requires stockholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of transactions if
(i) the common stock to be issued has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock or of securities convertible into or exercisable for common
stock, or (ii) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock or of securities
convertible into or exercisable for common stock.
The increase to the conversion rate under the Amended Indenture, along with the purchase of additional Convertible Notes
discussed in Proposal 2, would result in a maximum incremental increase of 26,964,426 shares of our Class B common stock underlying the Convertible Notes (including, for the avoidance of doubt, the shares underlying the Convertible Notes
pursuant to the issuance of additional Convertible Notes discussed in Proposal 2 below). Our Class B common stock is convertible into our Class A common stock at a 1:1 ratio. Such incremental increase of shares of Class B common stock
underlying the Convertible Notes would result in the issuance of more than 20% of the Company’s voting power and shares of common stock outstanding prior to such issuance, which, as described above, requires stockholder approval under the
rules and regulations of the NYSE.
The Amended Indenture provides that all conversions that would require stockholder approval will be settled in cash if
such required stockholder approval has not been obtained, at a cash price equal to an amount derived from the volume weighted average price of our Class A common stock preceding the applicable conversion date. Therefore, absent such
approval, the Convertible Notes will only be convertible into, in the aggregate, the number of shares of Class B common stock issuable pursuant to the applicable NYSE rules and regulations, with the remainder to be paid in cash pursuant to
the Amended Indenture. We may not have sufficient cash on hand to settle such conversions in cash. If we are unable to settle such conversions in cash, we risk being in default under the Amended Indenture and the Convertible Notes being
accelerated. Even if we are able to settle such conversions in cash, our liquidity and financial condition would be materially and adversely impacted by such settlement.
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At the Special Meeting, in accordance with NYSE Rule 312.03(c), you will be asked to approve the full settlement of
conversions in Class B common stock of the Convertible Notes. The maximum share amounts that we are requesting approval for reflect a potential make-whole increase to the conversion rate, as described in the Amended Indenture. Without such
potential make-whole increase, the Convertible Notes would be convertible into fewer shares of our Class B common stock. You will be asked to approve the issuance of a maximum of 26,964,426 incremental shares of Class B common stock upon
the conversion of the Convertible Notes in connection with Proposal 1 and Proposal 2, and the issuance of a maximum of 32,923,694 incremental shares of Class B common stock upon the conversion of the Convertible Notes and the Constellation
Note (as defined below) in connection with all of the Proposals included herein.
Vote Required
The approval of the full settlement of conversions in Class B common stock of the Convertible Notes requires the affirmative vote of a majority of votes cast at
the Special Meeting. An abstention will be counted as a vote cast at the Special Meeting for purposes of the proposal and will have the same effect as a vote against the proposal.
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Proposal 2
Stockholders are being asked to approve, in accordance with Section 312.03 of the NYSE Listed Company Manual, the full settlement of
conversions in Class B common stock of the Company’s 10.0% Convertible Senior Secured Notes due 2021 held by New Enterprise Associates 10, Limited Partnership, KPCB Holdings, Inc. and Foris Ventures, LLC.
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The Board of Directors unanimously recommends a vote FOR this proposal.
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Overview
On April 20, 2020, we entered into the Amended Indenture governing our Convertible Notes (as such terms are defined in
Proposal 1). Pursuant to the Amended Indenture, among other things, we increased the conversion rate applicable to the Convertible Notes. We also increased the aggregate principal amount of the Convertible Notes and entered into a
Convertible Note Purchase Agreement (the “Purchase Agreement”), dated March 31, 2020, pursuant to which New Enterprise Associates 10, Limited Partnership (“NEA”) and Foris Ventures, LLC (“Foris,” and together with NEA and KPCB Holdings,
Inc., the “Affiliates”) agreed to purchase $30 million of Convertible Notes. Payment of the $30 million purchase price was made on March 31, 2020, and we expect to use the proceeds for general corporate and working capital purposes.
Stockholders are urged to read the Amended Indenture and the Purchase Agreement, which were filed with the SEC as Exhibits 4.1
and 10.1, respectively, to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 11, 2020 and are
incorporated by reference in this Proxy Statement.
Rule 312.03(b) of the NYSE Listed Company Manual (“NYSE Rule 312.03(b)”) requires stockholder approval prior to the
issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions, to (1) a director, officer or substantial security holder of the company (each a “Related
Party”); (2) a subsidiary, affiliate or other closely-related person of a Related Party; or (3) any company or entity in which a Related Party has a substantial direct or indirect interest; if the number of shares of common stock to be
issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance. The
Affiliates are deemed to be subject to the requirements of NYSE Rule 312.03(b).
The increase to the conversion rate under the Amended Indenture and the purchase of additional Convertible Notes pursuant
to the Purchase Agreement would result in a maximum incremental increase of 26,964,426 shares of our Class B common stock underlying the Convertible Notes. Our Class B common stock is convertible into our Class A common stock at a 1:1
ratio. Certain of the Affiliates hold Convertible Notes that, in connection with the increased conversion rate pursuant to the Amended Indenture, would be convertible into more than 1% of the number of shares of the Company’s common stock
outstanding and the Company’s voting power prior to such issuance, which, as described above, requires stockholder approval under the rules and regulations of the NYSE. Additionally, the Convertible Notes issued to NEA or Foris pursuant to
the Purchase Agreement would be convertible into more than 1% of the number of shares of the Company’s common stock outstanding and the Company’s voting power prior to such issuance, which, as described above, requires stockholder approval
under the rules and regulations of the NYSE.
As described in Proposal 1, the Amended Indenture provides that all conversions that would require stockholder approval
will be settled in cash if such required stockholder approval has not been obtained, at a cash price equal to an amount derived from the volume weighted average price of our Class A common stock preceding the applicable conversion date.
Therefore, absent such approval, the Convertible Notes will only be convertible into, in the aggregate, the number of shares of Class B common stock issuable pursuant to the applicable NYSE rules and regulations, with the remainder to be
paid in cash pursuant to the Amended Indenture. We may not have sufficient cash on hand to settle such conversions in cash. If we are unable to settle such conversions in cash, we risk being in default under the Amended Indenture and the
Convertible Notes being accelerated. Even if we are able to settle such conversions in cash, our liquidity and financial condition would be materially and adversely impacted by such settlement.
At the Special Meeting, in accordance with NYSE Rule 312.03(b), you will be asked to approve the full settlement of
conversions in Class B common stock of the Convertible Notes. The maximum share amounts that we are requesting approval for reflect a potential make-whole increase to the conversion rate, as described in the Amended Indenture. Without such
potential make-whole increase, the Convertible Notes would be convertible into fewer shares of our Class B common stock. You will be asked to approve the issuance of a maximum of 26,964,426 incremental shares of Class B common stock upon
the conversion of the Convertible Notes in connection with Proposal 1 and Proposal 2, and the issuance of a maximum of 32,923,694 incremental shares of Class B common stock upon the conversion of the Convertible Notes and Constellation Note
(as defined below) in connection with all of the Proposals included herein.
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Vote Required
The approval of the full settlement of conversions in Class B common stock of the Convertible Notes held by the Affiliates requires the
affirmative vote of a majority of votes cast at the Special Meeting. An abstention will be counted as a vote cast at the Special Meeting for purposes of the proposal and will have the same effect as a vote against the proposal.
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Proposal 3
Stockholders are being asked to approve, in accordance with Section 312.03 of the NYSE Listed Company Manual, the full settlement of
conversions in Class B common stock of the Company’s Amended and Restated Subordinated Secured Convertible Note held by Constellation NewEnergy, Inc.
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The Board of Directors unanimously recommends a vote FOR this proposal.
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Overview
On March 31, 2020, we entered into an Amended and Restated Subordinated Convertible Note Modification Agreement (the
“Modification Agreement”) governing our outstanding Convertible Note (the “Constellation Note”) held by Constellation NewEnergy, Inc. to modify the terms of the Constellation Note to be no less favorable than certain corresponding terms of
the Convertible Notes. Pursuant to the Modification Agreement, among other things, we increased the conversion rate applicable to the Constellation Note from 5.0% to 10.0% per annum, payable in cash, extended the maturity date from December
31, 2020 to December 31, 2021 and amended the conversion price from $38.64 to $8.00. As of the date of this Proxy Statement, the aggregate principal amount of the Convertible Note outstanding is approximately $33.1 million. Stockholders are
urged to read the Modification Agreement, which was filed with the SEC as Exhibit 4.7 to our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2020, filed on May 11, 2020 and is incorporated by reference in this Proxy Statement.
As described in Proposal 1, NYSE Rule 312.03(c) requires stockholder approval prior to the issuance of common stock, or of
securities convertible into or exercisable for common stock, in any transaction or series of transactions if (i) the common stock to be issued has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power
outstanding before the issuance of such stock or of securities convertible into or exercisable for common stock, or (ii) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the
number of shares of common stock outstanding before the issuance of the common stock or of securities convertible into or exercisable for common stock.
The increase to the conversion rate under the Modification Agreement would result in a maximum incremental increase of
5,959,268 shares of our Class B common stock underlying the Constellation Note. Our Class B common stock is convertible into our Class A common stock at a 1:1 ratio. Such incremental increase of shares of Class B common stock underlying
the Constellation Note, in connection with the increases discussed in Proposal 1 and Proposal 2, would result in the issuance of more than 20% of the Company’s voting power and shares of common stock outstanding prior to such issuance,
which, as described above, requires stockholder approval under the rules and regulations of the NYSE. The Modification Agreement provides that the Constellation Note shall not be convertible prior to the required stockholder approval being
obtained, and that if stockholder approval is not obtained by September 1, 2020, the interest rate of the Constellation Note will be increased from 10.0% to 18.0% per annum.
At the Special Meeting, in accordance with NYSE rule 312.03(c), you will be asked to approve the full settlement of
conversions in Class B common stock of the Constellation Note. Absent such approval, the Constellation Note shall only be convertible into, in the aggregate, the number of shares of Class B common stock issuable pursuant to the applicable
NYSE rules and regulations. The maximum share amounts that we are requesting approval for reflect a potential make-whole increase to the conversion rate, as described in the Modification Agreement. Without such potential make-whole
increase, the Constellation Note would be convertible into fewer shares of our Class B common stock. You will be asked to approve the issuance of a maximum of 5,959,268 incremental shares of Class B common stock upon the conversion of the
Constellation Note in connection with this proposal, and the issuance of a maximum of 32,923,694 incremental shares of Class B common stock upon the conversion of the Convertible Notes and the Constellation Note in connection with all of
the Proposals included herein.
Vote Required
The approval of the full settlement of conversions in Class B common stock of the Company’s Amended and Restated
Subordinated Secured Convertible Note held by Constellation NewEnergy, Inc. requires the affirmative vote of a majority of votes cast at the Special Meeting. An abstention will be counted as a vote cast at the Special Meeting for purposes
of the proposal and will have the same effect as a vote against the proposal.
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