Stockholders' Equity

6 Months Ended

Jun. 30, 2020

STOCKHOLDERS’ EQUITY

TerraForm Power, Inc. had 100,000,000 authorized shares of preferred stock of par value $0.01 per share, and 1,200,000,000 authorized shares of Common Stock of par value $0.01 per share as of June 30, 2020. There were no other authorized classes of shares and the Company did not have any issued shares of preferred stock as of June 30, 2020. On July 31, 2020, TerraForm Power completed the previously announced reincorporation merger whereby the Company merged with and into TERP NY, with TERP NY as the surviving corporation of the merger. See Note 1. Nature of Operations and Organization for additional details.

The following table reflects the changes in the Company’s shares of Common Stock outstanding during the six months ended June 30, 2020 and 2019:


	Six Months Ended June 30,
(In thousands)	2020	2019
Balance as of January 1	226,501	209,142
Net shares issued under equity incentive plan	31	—
Balance as of June 30	226,532	209,142

Stock-based Compensation

The Company has an equity incentive plan that provides for the award of incentive and nonqualified stock options, restricted stock awards and restricted stock units (“RSUs”) to personnel and directors who provide services to the Company. The maximum contractual term of an award is ten years from the date of grant. As of June 30, 2020 and December 31, 2019, an aggregate of 3,662,245 and 3,734,185 shares of Common Stock were available for issuance under this plan, respectively. Upon the vesting of RSUs, the Company issues shares that have been previously authorized to be issued.

During the six months ended June 30, 2020, the Company awarded 121,817 time-based RSUs to certain employees of the Company. The grant-date fair value of these RSUs was $2.2 million based on the Company’s closing stock price. These RSUs are subject to a three-year vesting schedule based on the date of the Board of Directors’ approval and are recognized as compensation cost in accordance with the vesting schedule. The amount of stock-based compensation expense related to the equity awards in the Company’s stock during the six months ended June 30, 2020 and 2019 was $0.7 million and $0.2 million, respectively and is reflected within cost of operations and general and administrative expenses in the unaudited condensed consolidated statement of operations.

The RSUs do not entitle the holders to voting rights and holders of the RSUs do not have any right to receive dividends or distributions. The following table presents information regarding outstanding RSUs as of June 30, 2020 and changes during the six months ended June 30, 2020:


	Number of RSUs Outstanding	Weighted- Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Life (in years)
Balance as of January 1, 2020	191,936	$	11.57
Granted	121,817	17.94
Vested	(49,877)	11.84
Balance as of June 30, 2020	263,876	14.52		$	4,705	1.5 years

The total unrecognized stock-based expense related to the Company’s RSUs at June 30, 2020 was $3.0 million and will be recognized, net of any forfeitures, over a weighted-average amortization period of 1.5 years.

As more fully discussed in Note 17. Related Parties, pursuant to the Reorganization Agreement entered into by the Company with Brookfield Renewables and other affiliates, on July 31, 2020, upon consummation of the merger between the Company and Brookfield Renewable, all outstanding Company RSUs were converted into BEPC RSUs. Such RSUs are subject to substantially the same terms and conditions as were applicable to the Company RSUs (except that the form of payment upon vesting will be in BEPC Shares).

Cash Distributions

The following table presents the cash distributions declared and paid on Common Stock during the six months ended June 30, 2020 and 2019:

Distributions per Share

Declaration Date

Record Date

Payment Date

2020:

First Quarter

0.2014

March 16, 2020

March 27, 2020

March 31, 2020

Second Quarter

0.2014

May 6, 2020

June 1, 2020

June 15, 2020

2019:

First Quarter

0.2014

March 13, 2019

March 24, 2019

March 29, 2019

Second Quarter

0.2014

May 8, 2019

June 3, 2019

June 17, 2019

Share Repurchase Program

On July 25, 2019, the Board of Directors of the Company authorized the renewal of the Company’s share repurchase program through August 4, 2020. Under the share repurchase program, the Company may repurchase up to 5% of the Company’s Common Stock outstanding as of July 25, 2019. The timing and the amount of any repurchases of Common Stock will be determined by the Company’s management based on its evaluation of market conditions and other factors. Repurchases of Common Stock may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws, open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 under the Exchange Act. The program may be suspended or discontinued at any time and does not obligate the Company to purchase any minimum number of shares. Any repurchased Common Stock will be held by the Company as treasury stock. The Company expects to fund any repurchases from the available liquidity.

No shares have been repurchased by the Company during the six months ended June 30, 2020 and June 30, 2019.

TerraForm Power NY Holdings, Inc. 10-Q