As filed with the Securities and Exchange Commission on August 14, 2020

Registration No. 333-[●]

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SUNRUN INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		3430		26-2841711
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

225 Bush Street, Suite 1400

San Francisco, California 94104

(415) 580-6900

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Jeanna Steele, General Counsel and Corporate Secretary

Sundance Banks, Deputy General Counsel

225 Bush Street, Suite 1400

San Francisco, California 94104

(415) 580-6900

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Jamie Leigh, Esq. Ian Nussbaum, Esq. Calise Cheng, Esq. Cooley LLP 101 California Street, 5th Floor San Francisco, California 94111 (415) 693-2000		C. Dan Black Chief Legal Officer, Executive Vice President and Secretary Vivint Solar, Inc. 1800 West Ashton Boulevard Lehi, Utah 84043 (877) 404-4129		Elizabeth Cooper, Esq. Brian Stadler, Esq. Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 (212) 455-2000

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effectiveness of this registration statement and the satisfaction or waiver of all other conditions under the merger agreement described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☒		Accelerated filer		☐
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to be Registered		Amount to be Registered		Proposed Maximum Offering Price Per Share		Proposed Maximum Aggregate Offering Price		Amount of Registration Fee
Common Stock, par value $0.0001 share		90,329,469(1)		N/A		$4,049,223,713.04(2)		$525,589.24(3)

(1)

The number of shares of common stock, par value $0.0001 per share (“Sunrun common stock”), of the registrant being registered upon completion of the merger of a wholly owned subsidiary of the registrant with and into Vivint Solar, Inc. (“Vivint Solar”) described in the joint proxy statement/prospectus contained herein is based upon an estimate of the maximum number of shares of common stock of Vivint Solar, par value $0.01 per share (“Vivint Solar common stock”), presently outstanding or issuable or expected to be issued in connection with the merger, including shares of Vivint Solar common stock underlying Vivint Solar stock options, performance-based restricted stock unit, restricted stock units, and awards pursuant to Vivint Solar’s long term incentive pool plans and shares of Vivint Solar common stock potentially issuable in respect of Vivint Solar stock options, performance-based restricted stock units, restricted stock units, and Vivint Solar’s long term incentive pool plans, which is equal to 164,235,397, multiplied by the exchange ratio of 0.55 shares of the registrant’s common stock for each share of Vivint Solar common stock, collectively equal to 90,329,469.

(2)

Estimated solely for purposes of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended (the “Securities Act”) and calculated in accordance with Rules 457(c) and 457(f)(1) promulgated under the Securities Act. The proposed maximum aggregate offering price is solely for the purpose of calculating the registration fee and was calculated based upon the market value of shares of Vivint Solar common stock (the securities to be cancelled in the merger) in accordance with Rule 457(c) under the Securities Act as follows: the product of (a) $24.66, the average of the high and low prices per share of Vivint Solar common stock on August 11, 2020, as quoted on the New York Stock Exchange and (b) 164,235,397, the estimated maximum number of shares of Vivint Solar common stock that may be exchanged for the shares of Sunrun common stock being registered;

(3)	Computed in accordance with Section 6(b) of the Securities Act at a rate equal to $129.80 per $1,000,000 of the proposed maximum aggregate offering price.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

The information in this joint proxy statement/prospectus is not complete and may be changed. A registration statement relating to the securities described in this joint proxy statement/prospectus has been filed with the U.S. Securities and Exchange Commission. We may not sell the securities offered by this joint proxy statement/prospectus until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This joint proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer, solicitation or sale is not permitted.

 

PRELIMINARY—SUBJECT TO COMPLETION, DATED AUGUST 14, 2020

 

MERGER AND SHARE ISSUANCE PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear Sunrun and Vivint Solar Stockholders:

On July 6, 2020, Sunrun Inc., a Delaware corporation (“Sunrun”), Viking Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Sunrun (“Merger Sub”), and Vivint Solar, Inc., a Delaware corporation (“Vivint Solar”), entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “merger agreement”) pursuant to which, subject to approval of Sunrun stockholders and Vivint Solar stockholders and the satisfaction or (to the extent permitted by law) waiver of other specified closing conditions, Sunrun will acquire Vivint Solar in an all-stock merger. At the completion of the merger, Merger Sub will merge with and into Vivint Solar, with Vivint Solar surviving the merger and becoming a wholly owned subsidiary of Sunrun.

If the merger is completed, each share of Vivint Solar common stock issued and outstanding immediately prior to the effective time of the merger (the “effective time”), except for certain specified shares, will be converted into the right to receive 0.55 (the “exchange ratio”) fully paid and nonassessable shares of Sunrun common stock and, if applicable, substituting cash in lieu of fractional shares, less any applicable withholding taxes (the “merger consideration”). The exchange ratio is fixed and will not be adjusted for changes in the market price of either Sunrun common stock or Vivint Solar common stock between the dates of the signing of the merger agreement and the completion of the merger. If the merger is completed, Sunrun stockholders will continue to own their existing shares of Sunrun common stock, which will not be adjusted or otherwise changed by the merger. For more details on the merger consideration, see the section entitled “The Merger Agreement—Merger Consideration” beginning on page [●] of the accompanying joint proxy statement/prospectus.

Sunrun common stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “RUN”, and Vivint Solar common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “VSLR”. As of [●], 2020, the last completed trading day before the date of the accompanying joint proxy statement/prospectus, the last reported sales price of Sunrun common stock at the end of regular trading hours, as reported on Nasdaq, was $[●] per share, and the last reported sales price of Vivint Solar common stock at the end of regular trading hours, as reported on NYSE, was $[●] per share. Because the merger consideration is payable in a fixed number of shares of Sunrun common stock, with each share of Vivint Solar common stock being exchanged for 0.55 shares of Sunrun common stock, the implied value of the merger consideration to be received in exchange for each share of Vivint Solar common stock will fluctuate based on the market price of Sunrun common stock until the completion of the merger. As a result, the value of the per share merger consideration that Vivint Solar stockholders will be entitled to receive upon completion of the merger could be greater than, less than or the same as the value of the merger consideration on the date of the accompanying joint proxy statement/prospectus. Accordingly, Sunrun and Vivint Solar urge you to obtain updated market quotations for Sunrun common stock before deciding whether to vote for the proposals presented in the accompanying joint proxy statement/prospectus.

Based on the number of shares of Vivint Solar common stock outstanding and reserved for issuance as of the Vivint Solar record date (as defined below), and the number of shares of Sunrun common stock outstanding and reserved for issuance as of the Sunrun record date (as defined below), we estimate that, immediately following completion of the merger, former holders of Vivint Solar common stock will own approximately [●]% of the common stock of Sunrun on a fully diluted basis, and pre-merger holders of Sunrun common stock will own approximately [●]% of the common stock of Sunrun on a fully diluted basis.

Each of Sunrun and Vivint Solar is holding a virtual special meeting of its stockholders to vote on the proposals necessary to complete the merger. In light of the ongoing COVID-19 pandemic, Sunrun and Vivint Solar have each chosen to hold an exclusively virtual special meeting rather than an in-person meeting to minimize the health and safety risks of holding an in-person meeting and to allow for greater access to those who may want to attend. Information about each virtual special meeting, the merger and the other business to be considered by stockholders at each virtual special meeting is contained in the accompanying joint proxy statement/prospectus. Any stockholder entitled to attend and vote at the applicable virtual special meeting is entitled to appoint a proxy to attend and vote on such stockholder’s behalf. Such proxy need not be a holder of Sunrun common stock or Vivint Solar common stock. We urge you to read the accompanying joint proxy statement/prospectus and the annexes and documents incorporated by reference carefully. You should also carefully consider the risks that are described in the section entitled “Risk Factors” beginning on page [●] of the accompanying joint proxy statement/prospectus before making any voting decisions.

Your vote is very important regardless of the number of shares of Sunrun common stock or Vivint Solar common stock that you own. The merger cannot be completed unless (1) Sunrun stockholders approve the issuance of Sunrun common stock to Vivint Solar stockholders in connection with the merger and (2) Vivint Solar stockholders adopt the merger agreement.

The Sunrun board of directors unanimously recommends that Sunrun stockholders vote “FOR” each of the proposals to be considered at the Sunrun virtual special meeting. The Vivint Solar board of directors unanimously recommends that Vivint Solar stockholders vote “FOR” each of the proposals to be considered at the Vivint Solar virtual special meeting.

Whether or not you plan to attend the Sunrun virtual special meeting or the Vivint Solar virtual special meeting, please submit your proxy as soon as possible to make sure that your shares are represented at the applicable meeting.

 

Lynn Jurich Chief Executive Officer Sunrun Inc.		David Bywater Chief Executive Officer Vivint Solar, Inc.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger or the other transactions described in the accompanying joint proxy statement/prospectus or the securities to be issued in connection with the merger or determined if the accompanying joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying joint proxy statement/prospectus is dated [●], 2020 and is first being mailed to Sunrun stockholders and Vivint Solar stockholders on or about [●], 2020.

 

225 Bush Street, Suite 1400

San Francisco, California 94104

NOTICE OF VIRTUAL SPECIAL MEETING OF STOCKHOLDERS

To be held at [●] Pacific Time on [●], 2020

Dear Sunrun Inc. Stockholders:

Notice is hereby given that Sunrun Inc. (“Sunrun”), will hold a virtual special meeting of its stockholders (the “Sunrun virtual special meeting”), exclusively online via live audio-only webcast on [●], 2020 at [●] Pacific Time.

There will not be a physical meeting location. The Sunrun virtual special meeting can be accessed by visiting http://virtualshareholdermeeting.com/Sunrun2020SM, where you will be able to attend the Sunrun virtual special meeting via live audio-only webcast. You will be able to vote your shares and submit questions during the Sunrun virtual special meeting webcast by logging in to the website listed above using the 16-digit control number included in your proxy card. Online check-in will begin at [●] Pacific Time, and we encourage you to allow ample time for the online check-in procedures. Please note that you will not be able to attend the Sunrun virtual special meeting in person. We are holding the Sunrun virtual special meeting to consider the following proposals:

 

1.

Approval of the Sunrun Share Issuance. To vote on a proposal to approve the issuance of shares of Sunrun common stock, par value $0.0001 per share, to Vivint Solar stockholders in connection with the merger contemplated by the Agreement and Plan of Merger, dated as of July 6, 2020 (as it may be amended from time to time, the “merger agreement”), by and among Sunrun, Viking Merger Sub, Inc. and Vivint Solar, Inc. (the “Sunrun share issuance proposal”); and

 

2.

Adjournment of the Sunrun Virtual Special Meeting. To vote on a proposal to approve the adjournment of the Sunrun virtual special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Sunrun virtual special meeting to approve the Sunrun share issuance proposal (the “Sunrun adjournment proposal”).

Sunrun will transact no other business at the Sunrun virtual special meeting, except such business as may properly be brought before the Sunrun virtual special meeting or any adjournment or postponement thereof. Please refer to the joint proxy statement/prospectus of which this notice is a part for further information with respect to the business to be transacted at the Sunrun virtual special meeting.

The Sunrun board of directors, referred to as the Sunrun Board, has fixed the close of business on [●], 2020 as the record date for the Sunrun virtual special meeting, referred to as the Sunrun record date. Only Sunrun stockholders of record as of the Sunrun record date are entitled to receive notice of, and to vote at, the Sunrun virtual special meeting or any adjournment or postponement thereof.

Completion of the merger is conditioned on, among other things, approval of the Sunrun share issuance proposal by the Sunrun stockholders, which requires the affirmative vote of the holders of a majority of the voting power of the shares of Sunrun common stock, present or represented by proxy at the Sunrun virtual special meeting and entitled to vote on the Sunrun share issuance proposal.

The Sunrun Board unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the merger, and determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger and the Sunrun share issuance, are advisable and fair to and in the best interests of Sunrun and its stockholders, and unanimously recommends that Sunrun stockholders vote:

 

•

“FOR” the Sunrun share issuance proposal; and

 

•

“FOR” the Sunrun adjournment proposal.

Your vote is very important regardless of the number of shares of Sunrun common stock that you own. In order to approve the Sunrun share issuance proposal, the votes cast in favor of the Sunrun share issuance proposal must represent a majority of the voting power of the shares present or represented by proxy at the meeting and entitled to vote on the proposal. Accordingly, abstentions will have the same effect as a vote against the Sunrun share issuance proposal.

You are cordially invited to attend the Sunrun virtual special meeting. The Sunrun virtual special meeting can be accessed by visiting http://virtualshareholdermeeting.com/Sunrun2020SM, where you will be able to attend the Sunrun virtual special meeting via live audio-only webcast. You will be able to vote your shares and submit questions during the Sunrun virtual special meeting webcast by logging in to the website listed above using the 16-digit control number included in your proxy card. Whether or not you expect to attend the Sunrun virtual special meeting, to ensure your representation at the Sunrun virtual special meeting, we urge you to submit a proxy to vote your shares as promptly as possible by (1) visiting the Internet site listed on the enclosed Sunrun proxy card, (2) calling the toll-free number listed on the enclosed Sunrun proxy card or (3) submitting your enclosed Sunrun proxy card by mail by using the provided self-addressed, stamped envelope. Submitting a proxy will not prevent you from attending by means of remote communication the Sunrun virtual special meeting and voting at the Sunrun virtual special meeting, but it will help to ensure that a quorum is present and avoid added solicitation costs. Any holder of record of Sunrun common stock as of the Sunrun record date who attends the Sunrun virtual special meeting may vote at the Sunrun virtual special meeting, thereby revoking any previous proxy. In addition, a proxy may also be revoked in writing before the Sunrun virtual special meeting in the manner described in the accompanying joint proxy statement/prospectus. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction form furnished by your bank, broker or other nominee.

If you own shares in street name through an account with a bank, broker or other nominee and you decide to attend the Sunrun virtual special meeting, you cannot vote at the Sunrun virtual special meeting unless you present a “legal proxy”, issued in your name from your bank, broker or other nominee.

The accompanying joint proxy statement/prospectus provides a detailed description of the merger and the merger agreement and the other matters to be considered at the Sunrun virtual special meeting. We urge you to carefully read this joint proxy statement/prospectus, including any documents incorporated by reference herein, and the annexes in their entirety. If you have any questions concerning either of the proposals in this notice, the merger or the accompanying joint proxy statement/prospectus, would like additional copies or need help voting your shares of Sunrun common stock, please contact Sunrun’s proxy solicitor:

MacKenzie Partners, Inc.

1407 Broadway – 27^th Floor

New York, New York 10018

Stockholders may call toll-free: (800) 322-2885

Banks and Brokers may call collect: (212) 929-5500

Email: proxy@mackenziepartners.com

By Order of the Board of Directors,

 

Jeanna Steele General Counsel and Corporate Secretary

[●], 2020

VIVINT SOLAR, INC.

1800 West Ashton Boulevard

Lehi, Utah 84043

NOTICE OF VIRTUAL SPECIAL MEETING OF STOCKHOLDERS

To be held at [●] Mountain Time on [●], 2020

Dear Stockholders of Vivint Solar, Inc.:

Notice is hereby given that Vivint Solar, Inc. (“Vivint Solar”), will hold a virtual special meeting of its stockholders (the “Vivint Solar virtual special meeting”) exclusively online via live audio-only webcast on [●], 2020 at [●] Mountain Time.

There will not be a physical meeting location. The Vivint Solar virtual special meeting can be accessed by visiting [●], where you will be able to attend the virtual meeting live, have an opportunity to submit questions, and vote online. We encourage you to allow ample time for online check-in, which will open at [●], Mountain Time. Please note that you will not be able to attend the Vivint Solar virtual special meeting in person. We are holding the Vivint Solar virtual special meeting to consider the following proposals:

 

1.

Adoption of the Merger Agreement. To vote on a proposal to adopt the merger agreement, which is further described in the accompanying joint proxy statement/prospectus, including in the section entitled “The Merger Agreement” beginning on page [●] of the accompanying joint proxy statement/prospectus, and a copy of the merger agreement is attached as Annex A to the accompanying joint proxy statement/prospectus (the “Vivint Solar merger proposal”);

 

2.

Vivint Solar Merger-Related Compensation. To vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid by Vivint Solar to certain of its named executive officers that is based on or otherwise relates to the merger contemplated by the merger agreement (the “Vivint Solar merger-related compensation proposal”); and

 

3.

Adjournment of the Vivint Solar Virtual Special Meeting. To vote on a proposal to approve the adjournment of the Vivint Solar virtual special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Vivint Solar virtual special meeting to approve the Vivint Solar merger proposal (the “Vivint Solar adjournment proposal”).

Vivint Solar will transact no other business at the Vivint Solar virtual special meeting, except such business as may properly be brought before the Vivint Solar virtual special meeting or any adjournment or postponement thereof. Please refer to the joint proxy statement/prospectus of which this notice is a part for further information with respect to the business to be transacted at the Vivint Solar virtual special meeting.

The Vivint Solar board of directors, referred to as the Vivint Solar Board, has fixed the close of business on [●], 2020 as the record date for the Vivint Solar virtual special meeting, referred to as the Vivint Solar record date. Only Vivint Solar stockholders of record as of the Vivint Solar record date are entitled to receive notice of, and to vote at, the Vivint Solar virtual special meeting or any adjournment or postponement thereof.

Completion of the merger is conditioned on, among other things, approval of the Vivint Solar merger proposal by the Vivint Solar stockholders, which requires the affirmative vote of the holders a majority of all the shares of Vivint Solar common stock outstanding as of the close of business on the Vivint Solar record date and entitled to vote on the Vivint Solar merger proposal.

The Vivint Solar Board unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the merger, and determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Vivint Solar and its stockholders, and unanimously recommends that Vivint Solar stockholders vote:

“FOR” the Vivint Solar merger proposal;

“FOR” the Vivint Solar merger-related compensation proposal; and

“FOR” the Vivint Solar adjournment proposal.

Your vote is very important regardless of the number of shares of Vivint Solar common stock that you own. In order to approve the Vivint Solar merger proposal, the votes cast in favor of the Vivint Solar merger proposal must represent a majority of the shares of Vivint Solar common stock outstanding as of the close of business on the Vivint Solar record date. Accordingly, abstentions will have the same effect as a vote against the Vivint Solar merger proposal.

You are cordially invited to attend the Vivint Solar virtual special meeting. The Vivint Solar virtual special meeting can be accessed by visiting [●], where you will be able to listen to the Vivint Solar virtual special meeting live, have an opportunity to submit questions and vote online. Whether or not you expect to attend the Vivint Solar virtual special meeting, to ensure your representation at the Vivint Solar virtual special meeting, we urge you to submit a proxy to vote your shares as promptly as possible by (1) visiting the Internet site listed on the enclosed Vivint Solar proxy card, (2) calling the toll-free number listed on the enclosed Vivint Solar proxy card or (3) submitting your enclosed Vivint Solar proxy card by mail by using the provided self-addressed, stamped envelope. Submitting a proxy will not prevent you from attending by means of remote communication the Vivint Solar virtual special meeting and voting at the Vivint Solar virtual special meeting, but it will help to ensure that a quorum is present and avoid added solicitation costs. Any holder of record of Vivint Solar common stock as of the Vivint Solar record date who attends the Vivint Solar virtual special meeting may vote at the Vivint Solar virtual special meeting, thereby revoking any previous proxy. In addition, a proxy may also be revoked in writing before the Vivint Solar virtual special meeting in the manner described in the accompanying joint proxy statement/prospectus. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction form furnished by your bank, broker or other nominee.

If you own shares in street name through an account with a bank, broker or other nominee and you decide to attend the Vivint Solar virtual special meeting, you cannot vote at the Vivint Solar virtual special meeting unless you present a “legal proxy”, issued in your name from your bank, broker or other nominee.

The accompanying joint proxy statement/prospectus provides a detailed description of the merger and the merger agreement and the other matters to be considered at the Vivint Solar virtual special meeting. We urge you to carefully read this joint proxy statement/prospectus, including any documents incorporated by reference herein, and the annexes in their entirety. If you have any questions concerning either of the proposals in this notice, the merger or the accompanying joint proxy statement/prospectus, would like additional copies or need help voting your shares of Vivint Solar common stock, please contact Vivint Solar’s proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Stockholders may call toll-free: (877) 800-5187

Banks and Brokers may call collect: (212) 750-5833

By Order of the Board of Directors,

 

C. Dan Black Chief Legal Officer, Executive Vice President, and Secretary

[●], 2020

ADDITIONAL INFORMATION

The accompanying joint proxy statement/prospectus incorporates by reference important business and financial information about Sunrun and Vivint Solar from other documents that are not included in or delivered with the accompanying joint proxy statement/prospectus. For a listing of the documents incorporated by reference into the accompanying joint proxy statement/prospectus, see the section entitled “Where You Can Find More Information” beginning on page [●] of the accompanying joint proxy statement/prospectus.

You can obtain any of the documents incorporated by reference into the joint proxy statement/prospectus by requesting them in writing or by telephone as follows:

 

For Sunrun Stockholders: Sunrun Inc. 225 Bush Street, Suite 1400 San Francisco, California 94104 Attention: Investor Relations (415) 373-5206 investors@sunrun.com		For Vivint Solar Stockholders: Vivint Solar, Inc. 1800 West Ashton Boulevard Lehi, Utah 84043 Attention: Investor Relations (855) 842-1844 ir@vivintsolar.com

To receive timely delivery of the documents in advance of the Sunrun virtual special meeting and the Vivint Solar virtual special meeting, you should make your request no later than [●], 2020.

You may also obtain any of the documents incorporated by reference into the accompanying joint proxy statement/prospectus without charge through the Securities and Exchange Commission (the “SEC”) website at www.sec.gov. In addition, you may obtain copies of documents filed by Sunrun with the SEC on Sunrun’s Internet website at https://investors.sunrun.com/, under the tab “Filings & Financials”, then under the tab “SEC Filings” or by contacting Sunrun’s Corporate Secretary at Sunrun Inc., 225 Bush Street, Suite 1400, San Francisco, California 94104 or by calling (415) 580-6900. You may also obtain copies of documents filed by Vivint Solar with the SEC on Vivint Solar’s Internet website at https://investors.vivintsolar.com/, under the tab “Financial Information”, then under the tab “SEC Filings” or by contacting Vivint Solar’s Secretary at Vivint Solar, Inc., 1800 West Ashton Boulevard, Lehi, Utah 84043 or by calling (877) 404-4129.

We are not incorporating the contents of the websites of the SEC, Sunrun, Vivint Solar or any other entity or any other website into the accompanying joint proxy statement/prospectus. We are providing the information about how you can obtain certain documents that are incorporated by reference into the accompanying joint proxy statement/prospectus at these websites only for your convenience.

ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by Sunrun (File No. [●]), constitutes a prospectus of Sunrun under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock, par value $0.0001 per share, of Sunrun to be issued to Vivint Solar stockholders pursuant to the merger agreement. This document also constitutes a joint proxy statement of each of Sunrun and Vivint Solar under Section 14(a) of the Securities Exchange Act of 1934, as amended. It also constitutes a notice of meeting with respect to the Sunrun virtual special meeting, at which Sunrun stockholders will be asked to consider and vote upon the Sunrun share issuance proposal and certain other proposals, and constitutes a notice of meeting with respect to the Vivint Solar virtual special meeting, at which Vivint Solar stockholders will be asked to consider and vote upon the Vivint Solar merger proposal and certain other proposals.

Sunrun has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to Sunrun and Viking Merger Sub, Inc. and Vivint Solar has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to Vivint Solar.

You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. Sunrun and Vivint Solar have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated as of the date set forth above on the cover page of this joint proxy statement/prospectus, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date. Further, you should not assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to Sunrun stockholders or Vivint Solar stockholders nor the issuance by Sunrun of shares of Sunrun common stock pursuant to the merger agreement will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

 

TABLE OF CONTENTS

 

		Page
QUESTIONS AND ANSWERS			1
SUMMARY			12
The Parties to the Merger			12
The Merger and the Merger Agreement			13
Merger Consideration; Exchange Ratio			13
Treatment of Vivint Solar Equity Awards			13
Recommendation of the Sunrun Board and its Reasons for the Merger			15
Recommendation of the Vivint Solar Board and its Reasons for the Merger			15
Opinion of Sunrun’s Financial Advisor			15
Opinions of Vivint Solar’s Financial Advisors			16
Interests of Sunrun’s Directors and Executive Officers in the Merger			17
Interests of Vivint Solar’s Directors and Executive Officers in the Merger			17
Information about the Sunrun Virtual Special Meeting			18
Information about the Vivint Solar Virtual Special Meeting			19
Voting by Sunrun Directors and Executive Officers			20
Voting by Vivint Solar Directors and Executive Officers			21
Governance of Sunrun			21
Regulatory Approvals			21
Conditions to the Merger			22
Expected Timing of the Merger			22
Ownership of Sunrun after the Merger			23
No Solicitation; Change of Recommendation			23
Termination of the Merger Agreement			24
Termination Fee			24
No Appraisal Rights			25
The Ancillary Agreements			26
Material U.S. Federal Income Tax Consequences of the Merger			26
Accounting Treatment			27
Rights of Vivint Solar Stockholders Will Change as a Result of the Merger			27
Listing of Sunrun Common Stock and Delisting and Deregistration of Vivint Solar Common Stock			27
Risk Factors			27
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF SUNRUN			28
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF VIVINT SOLAR			31
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			33
COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA			34
COMPARATIVE PER SHARE MARKET PRICE INFORMATION AND IMPLIED VALUE OF MERGER CONSIDERATION			35
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			36
RISK FACTORS			38
Risks Relating to the Merger			38
Risks Relating to Sunrun Upon Completion of the Merger			47
Other Risks Relating to Sunrun and Vivint Solar			51

 

i

TABLE OF CONTENTS

(continued)

 

		Page
THE SUNRUN VIRTUAL SPECIAL MEETING			52
Date, Time and Place of the Virtual Special Meeting			52
Matters to be Considered			52
Recommendation of the Sunrun Board			52
Sunrun Record Date; Sunrun Stockholders Entitled to Vote			52
Voting by Sunrun’s Directors and Executive Officers			53
Quorum			54
Required Vote			54
Voting by Holders of Record			54
Voting via Proxies Submitted by the Internet or by Telephone			54
Voting via Proxies Submitted by Mail			54
Treatment of Abstentions; Failure to Vote			55
Shares Held in Street Name / Broker Non-Votes			55
Attendance at the Sunrun Virtual Special Meeting and Voting at the Sunrun Virtual Special Meeting			55
Revocability of Proxies			56
Solicitation of Proxies; Expenses of Solicitation			56
Tabulation of Votes			57
Adjournments			57
Assistance and Additional Information			57
SUNRUN PROPOSALS			58
Sunrun Proposal 1: Approval of the Sunrun Share Issuance			58
Sunrun Proposal 2: Adjournment of the Sunrun Virtual Special Meeting			58
THE VIVINT SOLAR VIRTUAL SPECIAL MEETING			59
Date, Time and Place of the Virtual Special Meeting			59
Matters to be Considered			59
Recommendation of the Vivint Solar Board			59
Vivint Solar Record Date; Vivint Solar Stockholders Entitled to Vote			60
Voting by Vivint Solar’s Directors and Executive Officers			60
Quorum			61
Required Vote			61
Voting by Holders of Record			62
Voting via Proxies Submitted by the Internet or by Telephone			62
Voting via Proxies Submitted by Mail			62
Treatment of Abstentions; Failure to Vote			62
Shares Held in Street Name / Broker Non-Votes			63
Attendance at the Vivint Solar Virtual Special Meeting			63
Revocability of Proxies			64
Solicitation of Proxies; Expenses of Solicitation			64
Tabulation of Votes			64
Adjournments			65
Assistance and Additional Information			65
VIVINT SOLAR PROPOSALS			66
Vivint Solar Proposal 1: Adoption of the Merger Agreement			66
Vivint Solar Proposal 2: Vivint Solar Merger-Related Compensation			66
Vivint Solar Proposal 3: Adjournment of the Vivint Solar virtual special meeting			67

 

ii

TABLE OF CONTENTS

(continued)

 

		Page
THE PARTIES TO THE MERGER			68
Sunrun Inc.			68
Vivint Solar, Inc.			68
Viking Merger Sub, Inc.			68
THE MERGER			69
Effect of the Merger			69
Merger Consideration			69
Background of the Merger			70
Reasons for the Merger			87
Opinion of Sunrun’s Financial Advisor			96
Opinions of Vivint Solar’s Financial Advisors			104
Certain Sunrun Unaudited Prospective Financial Information			125
Certain Vivint Solar Unaudited Prospective Financial Information			129
Certain Estimated Synergies			134
Interests of Sunrun’s Directors and Executive Officers in the Merger			135
Interests of Vivint Solar’s Directors and Executive Officers in the Merger			135
Governance of Sunrun			145
Regulatory Approvals			145
Timing of the Transaction			146
No Appraisal or Dissenters’ Rights in the Merger			146
The Ancillary Agreements			146
Accounting Treatment			148
Listing of Sunrun Common Stock			148
Delisting and Deregistration of Vivint Solar Common Stock			148
Restrictions on Sales of Sunrun Common Stock Received in the Merger			149
THE MERGER AGREEMENT			150
Explanatory Note Regarding the Merger Agreement			150
Structure of the Merger			150
Merger Consideration			150
Treatment of Vivint Solar Equity Awards			151
Closing and Effectiveness of the Merger			153
Conversion of Shares; Exchange of Certificates; Fractional Shares			153
Governance of Sunrun			154
Representations and Warranties; Material Adverse Effect			154
Covenants and Agreements			157
Conditions to the Merger			169
Termination			170
Expenses and Termination Fees			171
Amendment and Waiver			173
Third-Party Beneficiaries			173
Governing Law; Waiver of Jury Trial			173
Specific Performance			174
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			175

 

iii

TABLE OF CONTENTS

(continued)

 

		Page
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			178
Unaudited Pro Forma Condensed Combined Balance Sheet			180
Unaudited Pro Forma Condensed Combined Statement of Operations			181
Unaudited Pro Forma Condensed Combined Statement of Operations			182
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS			183
DESCRIPTION OF CAPITAL STOCK OF SUNRUN AFTER THE MERGER			190
COMPARATIVE RIGHTS OF STOCKHOLDERS			192
LEGAL MATTERS			207
EXPERTS			208
DEADLINES FOR SUBMITTING SUNRUN STOCKHOLDER PROPOSALS			209
DEADLINES FOR SUBMITTING VIVINT SOLAR STOCKHOLDER PROPOSALS			211
HOUSEHOLDING OF PROXY MATERIALS			212
WHERE YOU CAN FIND MORE INFORMATION			213
ANNEXES TO JOINT PROXY STATEMENT/PROSPECTUS
Annex A: Agreement and Plan of Merger			A-1
Annex B: Opinion of Credit Suisse Securities (USA) LLC			B-1
Annex C: Opinion of Morgan Stanley & Co. LLC			C-1
Annex D: Opinion of BofA Securities, Inc.			D-1

 

iv

QUESTIONS AND ANSWERS

The following questions and answers briefly address some commonly asked questions about the merger, the merger agreement, the transactions contemplated by the merger agreement, the Sunrun virtual special meeting and the Vivint Solar virtual special meeting. They may not include all the information that is important to Sunrun stockholders and Vivint Solar stockholders. Sunrun stockholders and Vivint Solar stockholders should carefully read this entire joint proxy statement/prospectus, including the annexes and the other documents referred to or incorporated by reference herein.

 

Q:	What is the merger?

 

A:

Sunrun, Merger Sub and Vivint Solar have entered into a merger agreement. A copy of the merger agreement is attached as Annex A to this joint proxy statement/prospectus. The merger agreement contains the terms and conditions of the proposed merger involving Sunrun and Vivint Solar, whereby Sunrun will acquire Vivint Solar in an all-stock merger. Under the merger agreement, subject to satisfaction or (to the extent permitted by law) waiver of the conditions set forth in the merger agreement and described hereafter, in each case prior to the completion of the merger, Merger Sub will merge with and into Vivint Solar, with Vivint Solar surviving the merger and becoming a wholly owned subsidiary of Sunrun (the “merger”). As a result of the merger, shares of Vivint Solar will no longer be publicly traded and will be delisted from the New York Stock Exchange, referred to as NYSE, and will be deregistered under the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act.

 

Q:	Why am I receiving these materials?

 

A:

You are receiving this joint proxy statement/prospectus to help you decide how to vote your shares of Sunrun common stock or Vivint Solar common stock with respect to the Sunrun share issuance proposal or the Vivint Solar merger proposal, respectively, and other matters to be considered at the virtual special meetings.

The merger cannot be completed unless, among other things, (1) Sunrun stockholders approve the issuance of Sunrun common stock to Vivint Solar stockholders in connection with the merger at the Sunrun virtual special meeting and (2) Vivint Solar stockholders adopt the merger agreement at the Vivint Solar virtual special meeting.

This joint proxy statement/prospectus constitutes both a joint proxy statement of Sunrun and Vivint Solar and a prospectus of Sunrun. It is a joint proxy statement because each of the Sunrun board of directors (the “Sunrun Board”) and the Vivint Solar board of directors (the “Vivint Solar Board”) is soliciting proxies from its stockholders. It is a prospectus because Sunrun will issue shares of its common stock in exchange for outstanding shares of Vivint Solar common stock in the merger if the merger is consummated. Information about the Sunrun virtual special meeting, the Vivint Solar virtual special meeting, the merger, the merger agreement and the other business to be considered by Sunrun stockholders at the Sunrun virtual special meeting and Vivint Solar stockholders at the Vivint Solar virtual special meeting is contained in this joint proxy statement/prospectus. Sunrun stockholders and Vivint Solar stockholders should read this information carefully and in its entirety. The enclosed voting materials allow Sunrun stockholders and Vivint Solar stockholders to vote their shares by proxy without attending the applicable virtual special meeting.

 

Q:	What will Vivint Solar stockholders receive in the merger?

 

A:

If the merger is completed, each share of Vivint Solar common stock issued and outstanding immediately prior to the effective time, except for certain specified shares, will be converted into the right to receive the merger consideration, which is the right to receive 0.55 fully paid and nonassessable shares of Sunrun common stock, and, if applicable, cash in lieu of fractional shares, less any applicable withholding taxes. The merger consideration is described in more detail in the section entitled “The Merger Agreement—Merger Consideration” beginning on page [●] of this joint proxy statement/prospectus.

 

1

Q:	What will Sunrun stockholders receive in the merger?

 

A:	Sunrun stockholders will not receive any merger consideration, and their shares of Sunrun common stock will remain outstanding.

 

Q:	What respective equity stakes will Sunrun stockholders and Vivint Solar stockholders hold in Sunrun immediately following the merger?

 

A:

Based on the number of shares of Sunrun common stock and Vivint Solar common stock outstanding and reserved for issuance as of the Sunrun record date and the Vivint Solar record date, respectively, we estimate that, immediately following completion of the merger, pre-merger holders of Sunrun common stock will own approximately [●]% of the common stock of Sunrun on a fully diluted basis and former holders of Vivint Solar common stock will own approximately [●]% of the common stock of Sunrun on a fully diluted basis. The exact equity stake of Sunrun stockholders and Vivint Solar stockholders in Sunrun immediately following the merger will depend on the number of shares of Sunrun common stock and Vivint Solar common stock issued and outstanding immediately prior to the merger.

 

Q:	Will the market value of the merger consideration change between the date of this joint proxy statement/prospectus and the time the merger is completed?

 

A:

Yes. Although the number of shares of Sunrun common stock that holders of Vivint Solar common stock will receive is fixed, the market value of the merger consideration will fluctuate between the date of this joint proxy statement/prospectus and the completion of the merger based upon the trading price of shares of Sunrun common stock. Any fluctuation in the trading price of shares of Sunrun common stock after the date of this joint proxy statement/prospectus will change the market value of the shares of Sunrun common stock that holders of Vivint Solar common stock will receive.

 

Q:	When do Sunrun and Vivint Solar expect to complete the transaction?

 

A:

Sunrun and Vivint Solar are working to complete the transaction as soon as practicable. We currently expect that the merger will be completed in the fourth quarter of 2020. Neither Sunrun nor Vivint Solar can predict, however, the actual date on which the merger will be completed because it is subject to conditions beyond each company’s control, including obtaining the necessary regulatory approvals.

See the section entitled “The Merger Agreement—Conditions to the Merger” beginning on page [●] of this joint proxy statement/prospectus.

 

Q:	What matters will be considered at each of the virtual special meetings?

 

A:	Sunrun stockholders are being asked to vote on the following proposals:

 

1.

Approval of the Sunrun Share Issuance. To vote on a proposal to approve the issuance of Sunrun common stock, par value $0.0001 per share, to Vivint Solar stockholders in connection with the merger agreement, referred to as the Sunrun share issuance proposal; and

 

2.

Adjournment of the Sunrun Virtual Special Meeting. To vote on a proposal to approve the adjournment of the Sunrun virtual special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Sunrun virtual special meeting to approve the Sunrun share issuance proposal, referred to as the Sunrun adjournment proposal.

Vivint Solar stockholders are being asked to vote on the following proposals:

 

1.

Adoption of the Merger Agreement. To vote on a proposal to adopt the merger agreement, which is further described in the section entitled “The Merger Agreement”, beginning on page [●] of this joint

 

2

proxy statement/prospectus and a copy of which merger agreement is attached as Annex A to this joint proxy statement/prospectus, referred to as the Vivint Solar merger proposal;

 

2.

Vivint Solar Merger-Related Compensation. To vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid by Vivint Solar to certain of its named executive officers that is based on or otherwise relates to the merger contemplated by the merger agreement, referred to as the Vivint Solar merger-related compensation proposal; and

 

3.

Adjournment of the Vivint Solar Virtual Special Meeting. To vote on a proposal to approve the adjournment of the Vivint Solar virtual special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Vivint Solar virtual special meeting to approve the Vivint Solar merger proposal, referred to as the Vivint Solar adjournment proposal.

Approval of the Sunrun share issuance proposal by Sunrun stockholders and approval of the Vivint Solar merger proposal by Vivint Solar stockholders are required for completion of the merger.

 

Q:	What vote is required to approve each proposal at the Sunrun virtual special meeting?

 

A:

The Sunrun share issuance proposal: The affirmative vote of the holders of a majority of the voting power of the shares of Sunrun common stock, present or represented by proxy at the Sunrun virtual special meeting and entitled to vote on the Sunrun share issuance proposal is required to approve the Sunrun share issuance proposal.

Sunrun adjournment proposal: The affirmative vote of the holders of a majority of the voting power of the shares of Sunrun common stock, present or represented by proxy at the Sunrun virtual special meeting and entitled to vote on the Sunrun adjournment proposal is required to approve the Sunrun adjournment proposal.

 

Q:	What vote is required to approve each proposal at the Vivint Solar virtual special meeting?

 

A:

The Vivint Solar merger proposal: The affirmative vote of the holders of a majority of the shares of Vivint Solar common stock outstanding as of the close of business on the Vivint Solar record date and entitled to vote on the Vivint Solar merger proposal is required to approve the Vivint Solar merger proposal.

The Vivint Solar merger-related compensation proposal: The affirmative vote of the holders of a majority of the voting power of the shares of Vivint Solar common stock, present or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the Vivint Solar merger-related compensation proposal, is required to approve the Vivint Solar merger-related compensation proposal.

The Vivint Solar adjournment proposal: The affirmative vote of the holders of a majority of the voting power of the shares of Vivint Solar common stock, present or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the Vivint Solar adjournment proposal, is required to approve the Vivint Solar adjournment proposal.

 

Q:	Why are Vivint Solar stockholders being asked to consider and vote on a proposal to approve, on a non-binding, advisory basis, the Vivint Solar merger-related executive compensation?

 

A:	Under SEC rules, Vivint Solar is required to seek a vote on a non-binding, advisory basis with respect to the compensation that may be paid or become payable to its named executive officers that is based on, or otherwise relates to, the merger.

 

Q:	What happens if the Vivint Solar merger-related compensation proposal is not approved?

 

A:	Approval of the Vivint Solar merger-related compensation proposal is not a condition to completion of the merger, and because the vote on the Vivint Solar merger-related compensation proposal is advisory only, it

 

3

will not be binding on Vivint Solar. Accordingly, if the merger is approved and the other conditions to closing are satisfied or waived, the merger will be completed even if the Vivint Solar merger-related compensation proposal is not approved. If the Vivint Solar merger proposal is approved and the Sunrun share issuance proposal is approved and the merger is completed, the Vivint Solar merger-related compensation will be payable to Vivint Solar’s named executive officers, subject only to the conditions applicable thereto, regardless of the outcome of the vote on the Vivint Solar merger-related compensation proposal.

 

Q:	Do any of Sunrun’s or Vivint Solar’s directors or executive officers have interests in the merger that may differ from those of Sunrun stockholders or Vivint Solar stockholders?

 

A:

Certain of Sunrun’s directors and executive officers and Vivint Solar’s directors and executive officers have certain interests in the merger that may be different from, or in addition to, the interests of Sunrun stockholders and Vivint Solar stockholders generally. The Sunrun Board was aware of the interests of Sunrun’s directors and executive officers, the Vivint Solar Board was aware of the interests of Vivint Solar’s directors and executive officers, and each board carefully considered these interests, among other matters, in evaluating the terms and structure, and overseeing the negotiation, of the merger, in approving the merger agreement and the transactions contemplated thereby, including the merger, and in making its recommendations to its stockholders. For more information regarding these interests, see the sections entitled “The Merger—Interests of Sunrun’s Directors and Executive Officers in the Merger” and “The Merger—Interests of Vivint Solar’s Directors and Executive Officers in the Merger” beginning on page [●] and [●], respectively, of this joint proxy statement/prospectus.

 

Q:	How many votes do I have?

Each Sunrun stockholder is entitled to one vote for each share of Sunrun common stock held of record as of the Sunrun record date and each Vivint Solar stockholder is entitled to one vote for each share of Vivint Solar common stock held of record as of the Vivint Solar record date.

As of the close of business on the Sunrun record date, there were [●] shares of Sunrun common stock outstanding. As of the close of business on the Vivint Solar record date, there were [●] shares of Vivint Solar common stock outstanding. As summarized below, there are some important distinctions between shares held of record and those owned beneficially in street name.

 

Q:	What constitutes a quorum for the Sunrun virtual special meeting?

 

A:

The presence at the Sunrun virtual special meeting, virtually or represented by proxy, of the holders of a majority of the voting power of the stock issued and outstanding and entitled to vote thereat, as of the Sunrun record date, will constitute a quorum for the transaction of business at the Sunrun virtual special meeting. Abstentions (which are described below) will count for the purpose of determining the presence of a quorum for the transaction of business at the Sunrun virtual special meeting.

 

Q:	What constitutes a quorum for the Vivint Solar virtual special meeting?

 

A:

The presence at the Vivint Solar virtual special meeting, virtually or represented by proxy, of the holders of a majority of the voting power of the stock issued, outstanding and entitled to vote thereat, as of the Vivint Solar record date, will constitute a quorum for the transaction of business at the Vivint Solar virtual special meeting. Abstentions (which are described below) will count for the purpose of determining the presence of a quorum for the transaction of business at the Vivint Solar virtual special meeting.

 

Q:	How does the Sunrun Board recommend that Sunrun stockholders vote?

 

A:	The Sunrun Board unanimously recommends that Sunrun stockholders vote: “FOR” the Sunrun share issuance proposal and “FOR” the Sunrun adjournment proposal.

 

4

Q:	How does the Vivint Solar Board recommend that Vivint Solar stockholders vote?

 

A:	The Vivint Solar Board unanimously recommends that Vivint Solar stockholders vote: “FOR” the Vivint Solar merger proposal, “FOR” the Vivint Solar merger-related compensation proposal and “FOR” the Vivint Solar adjournment proposal.

 

Q:	Why did the Sunrun Board approve the merger agreement and the transactions contemplated by the merger agreement, including the merger?

 

A:

For information regarding the Sunrun Board’s reasons for approving the merger agreement and the transactions contemplated by the merger agreement, including the merger, and recommending that Sunrun stockholders approve the Sunrun share issuance proposal, see the section entitled “The Merger—Reasons for the Merger—Sunrun Board’s Recommendation and Reasons for the Merger” beginning on page [●] of this joint proxy statement/prospectus.

 

Q:	Why did the Vivint Solar Board approve the merger agreement and the transactions contemplated by the merger agreement, including the merger?

 

A:

For information regarding the Vivint Solar Board’s reasons for approving and recommending adoption of the merger agreement and the transactions contemplated by the merger agreement, including the merger, see the section entitled “The Merger—Reasons for the Merger—Vivint Solar Board’s Recommendation and Reasons for the Merger” beginning on page [●] of this joint proxy statement/prospectus.

 

Q:	What if I hold shares in both Sunrun and Vivint Solar?

 

A:

If you hold shares of both Sunrun common stock and Vivint Solar common stock, you will receive two separate packages of proxy materials. A vote cast as a holder of Sunrun common stock will not count as a vote cast as a holder of Vivint Solar common stock, and a vote cast as a holder of Vivint Solar common stock will not count as a vote cast as a holder of Sunrun common stock. Therefore, please submit separate proxies for your shares of Sunrun common stock and your shares of Vivint Solar common stock.

 

Q:	What do I need to do now?

 

A:

After carefully reading and considering the information contained in this joint proxy statement/prospectus, please vote your shares as soon as possible so that your shares will be represented at the Sunrun virtual special meeting or Vivint Solar virtual special meeting, as applicable. Please follow the instructions set forth on the enclosed Sunrun proxy card or the Vivint Solar proxy card, as applicable, or on the voting instruction form provided by the record holder of your shares if your shares are held in the name of your bank, broker or other nominee.

 

Q:	Does my vote matter?

 

A:

Yes. The merger cannot be completed unless the Sunrun share issuance proposal is approved by the affirmative vote of the holders of a majority of the voting power of the shares of Sunrun common stock, present or represented by proxy at the Sunrun virtual special meeting and entitled to vote on the Sunrun share issuance proposal and the Vivint Solar merger proposal is approved by the affirmative vote of the holders of a majority of the shares of Vivint Solar common stock outstanding as of the close of business on the Vivint Solar record date and entitled to vote on the Vivint Solar merger proposal.

 

Q:	How do I vote?

 

A:

If you are a stockholder of record of Sunrun as of the Sunrun record date, you are entitled to receive notice of, and cast a vote at, the Sunrun virtual special meeting. If you are a stockholder of record of Vivint Solar as of the Vivint Solar record date, you are entitled to receive notice of, and cast a vote at, the Vivint Solar virtual special meeting. Each holder of Sunrun common stock is entitled to cast one vote on each matter properly brought before the Sunrun virtual special meeting for each share of Sunrun common stock that

 

5

such holder owned of record as of the Sunrun record date. Each holder of Vivint Solar common stock is entitled to cast one vote on each matter properly brought before the Vivint Solar virtual special meeting for each share of Vivint Solar common stock that such holder owned of record as of the Vivint Solar record date. You may submit your proxy to vote your shares before the Sunrun virtual special meeting or the Vivint Solar virtual special meeting in one of the following ways:

 

•

Telephone—use the toll-free number shown on your proxy card;

 

•

Via the Internet—visit the website shown on your proxy card to vote via the Internet; or

 

•

Mail—complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.

If you are a stockholder of record, you may also cast your vote at the applicable virtual special meeting.

If your shares are held in “street name”, through a bank, broker or other nominee, that institution will send you separate instructions describing the procedure for voting your shares. “Street name” stockholders who wish to vote at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting will need to obtain a “legal proxy” form from their bank, broker or other nominee.

 

Q:	What is the difference between holding shares as stockholder of record and as a beneficial owner?

 

A:

You are a “stockholder of record” if your shares are registered in your name with Sunrun’s transfer agent, American Stock Transfer & Trust Co LLC, referred to as AST, or Vivint Solar’s transfer agent, Computershare Trust Company, N.A., referred to as Computershare. As the stockholder of record, you have the right to vote at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting, as applicable. You may also vote by submitting a proxy via the Internet, telephone or mail, as described in the notice and above under the heading “How do I vote?” You are deemed to beneficially own shares in “street name” if your shares are held by a bank, broker or other nominee. Your bank, broker or other nominee will send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. If you beneficially own your shares, you are invited to attend the Sunrun virtual special meeting or Vivint Solar virtual special meeting, as applicable; however, you may not vote your shares at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting, as applicable, unless you obtain a “legal proxy” from your bank, broker or other nominee that holds your shares, giving you the right to vote the shares at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting, as applicable.

 

Q:	If my shares are held in “street name” by a bank, broker or other nominee, will my bank, broker or other nominee vote my shares for me?

 

A:

If your shares are held in “street name” by a bank, broker or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your bank, broker or other nominee. Please note that you may not vote shares held in street name by returning a proxy card directly to Sunrun or Vivint Solar, as applicable, or by voting at the Sunrun virtual special meeting or Vivint Solar virtual special meeting, as applicable, unless you provide a “legal proxy”, which you must obtain from your bank, broker or other nominee. Your bank, broker or other nominee is obligated to provide you with a voting instruction form for you to use.

Banks, brokers or other nominees who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers or other nominees are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at each of the Sunrun virtual special meeting and the Vivint Solar virtual special meeting are “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the bank, broker or other nominee does not have discretionary voting power. If a beneficial owner of shares of Sunrun common stock or Vivint Solar common stock held in street

 

6

name does not give voting instructions to the broker, bank or other nominee, then those shares will not be present or represented by proxy at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting. As a result, there will not be any broker non-votes at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting.

 

Q:	May I attend the Sunrun virtual special meeting or the Vivint Solar virtual special meeting?

 

A:	You or your authorized proxy may attend the Sunrun virtual special meeting if you were a registered or beneficial stockholder of Sunrun common stock as of the Sunrun record date.

You or your authorized proxy may attend the Vivint Solar virtual special meeting if you were a registered or beneficial stockholder of Vivint Solar common stock as of the Vivint Solar record date.

 

Q:	When and where will the Sunrun virtual special meeting take place? What must I do to attend the Sunrun virtual special meeting?

 

A:

The Sunrun virtual special meeting will be held exclusively online via live audio-only webcast on [●], 2020 at [●] Pacific Time. Online check-in will begin at [●] Pacific Time, and we encourage you to allow ample time for the online check-in procedures. Please note that you will not be able to attend the Sunrun virtual special meeting in person.

You or your authorized proxy may attend the Sunrun virtual special meeting if you were a registered or beneficial stockholder of Sunrun common stock as of the Sunrun record date.

You will be able to vote your shares and submit questions during the Sunrun virtual special meeting webcast by logging in to the website listed above using the 16-digit control number included in your proxy card. If you wish to submit a question during the Sunrun virtual special meeting, log into the Sunrun virtual special meeting platform at http://virtualshareholdermeeting.com/Sunrun2020SM, type your question into the “Ask a Question” field, and click “Submit.” We will respond to as many properly submitted questions during the relevant portion of the Sunrun virtual special meeting agenda as time allows.

If we experience technical difficulties during the Sunrun virtual special meeting (e.g., a temporary or prolonged power outage), we will determine whether the Sunrun virtual special meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the Sunrun virtual special meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any situation, we will promptly notify stockholders of the decision via http://virtualshareholdermeeting.com/Sunrun2020SM. We will have technicians ready to assist you with any technical difficulties you may have accessing the Sunrun virtual special meeting website. If you encounter any difficulties accessing the Sunrun virtual special meeting website during the check-in or meeting time, please call the technical support number that will be posted on the Sunrun virtual special meeting website log-in page at http://virtualshareholdermeeting.com/Sunrun2020SM.

You should register in advance to attend the Sunrun virtual special meeting. To do so, please make your request by mail to Office of the Corporate Secretary, 225 Bush Street, Suite 1400, San Francisco, California 94104, email at legalnotices@sunrun.com or by phone at (415) 580-6900. You are encouraged to timely make any such request such that Sunrun’s Corporate Secretary receives your request for an admission ticket on or before [●].

If you own shares in street name through an account with a bank, broker or other nominee, please send proof of your Sunrun share ownership as of the Sunrun record date (for example, a brokerage firm account statement or a “legal proxy” from your intermediary) along with your registration request. If you are not sure what proof to send, check with your intermediary.

If your shares are registered in your name with Sunrun’s stock registrar and transfer agent, American Stock Transfer & Trust Company, no proof of ownership is necessary because Sunrun can verify your ownership.

 

7

Q:	When and where will the Vivint Solar virtual special meeting take place? What must I do to attend the Vivint Solar virtual special meeting?

 

A:

The Vivint Solar virtual special meeting will be held exclusively online via live audio-only webcast on [●], 2020 at [●] Mountain Time. We encourage you to allow ample time for online check-in, which will open at [●], Mountain Time. Please note that you will not be able to attend the special meeting in person.

You or your authorized proxy may attend the Vivint Solar virtual special meeting if you were a registered or beneficial stockholder of Vivint Solar common stock as of the Vivint Solar record date.

To participate in the Vivint Solar virtual special meeting, visit [●] and enter the 15-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. The password for the meeting is VSLR2020. If you wish to submit a question during the Vivint Solar virtual special meeting, log into the virtual meeting platform at [●], click the message icon at the top of the screen, and submit your question. We will respond to as many properly submitted questions during the relevant portion of the Vivint Solar virtual special meeting agenda as time allows.

If we experience technical difficulties during the Vivint Solar virtual special meeting (e.g., a temporary or prolonged power outage), we will determine whether the Vivint Solar virtual special meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the Vivint Solar virtual special meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any situation, we will promptly notify stockholders of the decision via [●].

If you are a registered stockholder (that is, you hold your shares through Vivint Solar’s transfer agent, Computershare), you do not need to register to attend the Vivint Solar virtual special meeting virtually on the Internet. Please follow the instructions on the notice or proxy card that you received. No proof of ownership is necessary because Vivint Solar can verify your ownership.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Vivint Solar virtual special meeting virtually on the Internet. To register to attend the Vivint Solar virtual special meeting online by webcast, you must submit proof of your proxy power (legal proxy) reflecting your Vivint Solar holdings, along with your name and email address, to Computershare by email to legalproxy@computershare.com or mail to Computershare, Vivint Solar, Inc. Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001. Requests for registration must be labeled as “Legal Proxy” and be received no later than [●], Eastern Time, on [●], 2020.

 

Q:	What if I fail to vote or abstain?

 

A:	For purposes of the Sunrun virtual special meeting, an abstention occurs when a Sunrun stockholder attends the Sunrun virtual special meeting and does not vote or returns a proxy with an “abstain” instruction.

Sunrun share issuance proposal: An abstention will have the same effect as a vote cast “AGAINST” the Sunrun share issuance proposal. If a Sunrun stockholder is not present at the Sunrun virtual special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal.

Sunrun adjournment proposal: An abstention will have the same effect as a vote cast “AGAINST” the Sunrun adjournment proposal. If a Sunrun stockholder is not present at the Sunrun virtual special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal.

For purposes of the Vivint Solar virtual special meeting, an abstention occurs when a Vivint Solar stockholder attends the Vivint Solar virtual special meeting and does not vote or returns a proxy with an “abstain” instruction.

Vivint Solar merger proposal: An abstention will have the same effect as a vote cast “AGAINST” the Vivint Solar merger proposal. If a Vivint Solar stockholder is not present at the Vivint Solar virtual special meeting and does not respond by proxy, it will have the same effect of a vote cast “AGAINST” such proposal.

 

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Vivint Solar merger-related compensation proposal: An abstention will have the same effect as a vote cast “AGAINST” the Vivint Solar merger-related compensation proposal. If a Vivint Solar stockholder is not present at the Vivint Solar virtual special meeting and does not respond by proxy, it will have no effect on the outcome of the Vivint Solar merger-related compensation proposal (assuming a quorum is present).

Vivint Solar adjournment proposal: An abstention will have the same effect as a vote cast “AGAINST” the Vivint Solar adjournment proposal. If a Vivint Solar stockholder is not present at the Vivint Solar virtual special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal.

 

Q:	What will happen if I return my proxy or voting instruction form without indicating how to vote?

 

A:	If you submit your proxy or voting instruction form without indicating how to vote your shares on any particular proposal, the common stock represented by your proxy will be voted as recommended by the Sunrun Board or the Vivint Solar Board, as applicable, with respect to that proposal.

 

Q:	May I change or revoke my vote after I have delivered my proxy or voting instruction form?

 

A:	Yes. If you are a record holder, you may change or revoke your vote before your proxy is voted at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting, as applicable, as described herein. You may do this in one of the following four ways:

 

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By delivering to Sunrun’s Corporate Secretary (at Sunrun’s executive offices at 225 Bush Street, Suite 1400, San Francisco, California 94104) or Vivint Solar’s Secretary (at Vivint Solar’s principal executive offices located at 1800 West Ashton Boulevard, Lehi, Utah 84043), as applicable, a signed written notice of revocation bearing a later date than the proxy, stating that the proxy is revoked, which revocation is received prior to the proxy’s exercise at the applicable virtual special meeting;

 

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By duly executing a subsequently dated proxy relating to the same shares of Sunrun common stock or Vivint Solar common stock and returning it in the postage-paid envelope provided, which subsequent proxy is received before the prior proxy is exercised at the applicable virtual special meeting;

 

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By duly submitting a subsequently dated proxy relating to the same shares of Sunrun common stock or Vivint Solar common stock by telephone or via the Internet (i.e., your most recent duly submitted voting instructions will be followed) before [●] on [●], 2020; or

 

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By attending the Sunrun virtual special meeting or the Vivint Solar virtual special meeting and voting such shares during the Sunrun virtual special meeting or the Vivint Solar virtual special meeting.

If your shares are held in an account at a bank, broker or other nominee and you have delivered your voting instruction form or otherwise given instruction on how to vote your shares to your bank, broker or other nominee or your applicable plan administrator, you should contact your bank, broker or other nominee or your applicable plan administrator to change your vote.

 

Q:	What are the material U.S. federal income tax consequences of the merger?

 

A:

The obligations of the parties to complete the merger are conditioned on, among other things, the receipt by each of Sunrun and Vivint Solar of an opinion from its respective outside counsel (or other nationally recognized law firm, including outside counsel to the other party), each dated and based on the facts and law existing as of the closing date of the merger and relying upon customary assumptions and certain representations made by Sunrun and Vivint Solar, that for U.S. federal income tax purposes the merger will qualify as a ‘‘reorganization’’ within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, referred to as “the Code”. Accordingly, it is expected that U.S. holders (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page [●] of this joint proxy statement/prospectus) of shares of Vivint Solar common stock generally will not recognize any gain or loss for U.S. federal income tax purposes upon receipt of Sunrun common stock in exchange for Vivint Solar common stock in the merger (other than gain or loss, if any, with respect to any cash received

 

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in lieu of a fractional share of Sunrun common stock). For more information regarding the material U.S. federal income tax consequences of the merger, see the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page [●] of this joint proxy statement/prospectus.

 

Q:	Where can I find the voting results of the Sunrun virtual special meeting and the Vivint Solar virtual special meeting?

 

A:

The preliminary voting results will be announced at each of the Sunrun virtual special meeting and the Vivint Solar virtual special meeting. In addition, within four business days following certification of the final voting results, each of Sunrun and Vivint Solar intends to file the final voting results with the SEC on a Current Report on Form 8-K.

 

Q:	Are holders of Sunrun common stock entitled to appraisal rights?

 

A:

No. Holders of Sunrun common stock are not entitled to appraisal rights under the Delaware General Corporation Law of the State of Delaware, as amended, referred to as the DGCL. For more information, see the section entitled “The Merger—No Appraisal or Dissenters’ Rights in the Merger” beginning on page [●] of this joint proxy statement/prospectus.

 

Q:	Are holders of Vivint Solar common stock entitled to appraisal rights?

 

A:	No. Holders of Vivint Solar common stock are not entitled to appraisal rights under the DGCL. For more information, see the section entitled “The Merger—No Appraisal or Dissenters’ Rights in the Merger” beginning on page [●] of this joint proxy statement/prospectus.

 

Q:	What happens if I sell my shares of Sunrun common stock after the Sunrun record date but before the Sunrun virtual special meeting?

 

A:

The Sunrun record date for the Sunrun virtual special meeting (the close of business on [●], 2020) is earlier than the date of the Sunrun virtual special meeting and earlier than the date that the merger is expected to be completed. If you sell or otherwise transfer your shares of Sunrun common stock after the Sunrun record date but before the date of the Sunrun virtual special meeting, you will retain your right to vote at the Sunrun virtual special meeting.

 

Q:	What happens if I sell my shares of Vivint Solar common stock after the Vivint Solar record date but before the Vivint Solar virtual special meeting?

 

A:

The Vivint Solar record date for the Vivint Solar virtual special meeting (the close of business on [●], 2020) is earlier than the date of the Vivint Solar virtual special meeting and earlier than the date that the merger is expected to be completed. If you sell or otherwise transfer your shares of Vivint Solar common stock after the Vivint Solar record date but before the date of the Vivint Solar virtual special meeting, you will retain your right to vote at the Vivint Solar virtual special meeting. However, you will not have the right to receive the merger consideration to be received by Vivint Solar stockholders in the merger. In order to receive the merger consideration, you must hold your shares through completion of the merger.

 

Q:	Are there any risks that I should consider in deciding whether to vote in favor of the Sunrun share issuance proposal or the Vivint Solar merger proposal, or the other proposals to be considered at the Sunrun virtual special meeting or the Vivint Solar virtual special meeting, as applicable?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page [●] of this joint proxy statement/prospectus. You also should read and carefully consider the risk factors of Sunrun and Vivint Solar contained in the documents that are incorporated by reference into this joint proxy statement/prospectus.

 

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Q:	What are the conditions to completion of the merger?

 

A:

In addition to the approval of the Sunrun share issuance proposal by Sunrun stockholders and of the Vivint Solar merger proposal by Vivint Solar stockholders as described above, completion of the merger is subject to the satisfaction or (to the extent permitted by law) waiver of a number of other conditions, including:

 

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the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, referred to as the HSR Act;

 

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the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part;

 

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approval of the listing on the Nasdaq Global Select Market (“Nasdaq”) of the Sunrun common stock forming part of the merger consideration;

 

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the absence of any order or law that has the effect of enjoining or otherwise making illegal the consummation of the merger;

 

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receipt by each of Sunrun and Vivint Solar of an opinion of its respective outside counsel (or other nationally recognized law firm, including outside counsel to the other party) to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code;

 

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the absence of a material adverse effect with respect to Sunrun or Vivint Solar, as applicable, since the date of the merger agreement;

 

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the accuracy of the representations and warranties of Sunrun or Vivint Solar, as applicable, made in the merger agreement (subject to the materiality standards set forth in the merger agreement);

 

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the performance by Sunrun or Vivint Solar in all material respects, as applicable, of its covenants and obligations under the merger agreement; and

 

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delivery of an officer’s certificate by each of Sunrun and Vivint Solar certifying satisfaction of the conditions described in the preceding three bullet points.

 

Q:	Whom should I contact if I have any questions about the proxy materials or voting?

 

A:

If you are a stockholder of record of Sunrun and you have any questions about the proxy materials, or if you need assistance submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed Sunrun proxy card, you should contact MacKenzie Partners, Inc., referred to as MacKenzie, the proxy solicitation agent for Sunrun, at (800) 322-2885 (toll-free for stockholders) or (212) 929-5500 (collect for banks and brokers).

If you are a stockholder of record of Vivint Solar and you have any questions about the proxy materials, or if you need assistance submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed Vivint Solar proxy card, you should contact Innisfree M&A Incorporated, referred to as Innisfree, the proxy solicitation agent for Vivint Solar, at (877) 800-5187 (toll-free for stockholders) or (212) 750-5833 (collect for banks and brokers).

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The following table summarizes per share data (1) for Sunrun and Vivint Solar on a historical basis, (2) for Sunrun on an unaudited pro forma combined basis giving effect to the merger and (3) on an unaudited pro forma combined equivalent basis.

The unaudited pro forma net income (loss) per share for the year ended December 31, 2019 reflects the merger as if it had occurred on January 1, 2019. The book value per share as of June 30, 2020 reflects the merger as if it had occurred on June 30, 2020 and the book value per share as of December 31, 2019 reflects the merger as if it had occurred on December 31, 2019. The information in the table is based on, and should be read together with, the historical financial information of Sunrun and Vivint Solar which is incorporated by reference in this joint proxy statement/prospectus and the financial information contained under “Unaudited Pro Forma Combined Financial Information”, “Selected Historical Financial Data—Selected Historical Consolidated Financial Data of Sunrun” and “Selected Historical Financial Data—Selected Historical Consolidated Financial Data of Vivint Solar.” See the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

The unaudited pro forma combined per share data is presented for illustrative purposes only and is not necessarily indicative of actual or future financial position or results of operations that would have been realized if the merger had been completed as of the dates indicated or will be realized upon the completion of the merger. The summary pro forma information is preliminary, based on initial estimates of the fair value of assets acquired (including intangible assets) and liabilities assumed, and is subject to change as more information regarding the fair values are obtained, which changes could be materially different than the initial estimates.

 

		Historical Sunrun				Historical Vivint Solar				Unaudited Pro Forma Combined
Basic net income (loss) per share of common stock:
Six months ended June 30, 2020		$	(0.35	)		$	(0.33	)		$	(0.34	)
Twelve months ended December 31, 2019		$	0.23			$	(0.84	)		$	(0.23	)
Diluted net income (loss) per share of common stock:
Six months ended June 30, 2020		$	(0.35	)		$	(0.33	)		$	(0.34	)
Twelve months ended December 31, 2019		$	0.21			$	(0.84	)		$	(0.23	)
Cash dividends declared per share:
Six months ended June 30, 2020		$	—			$	—			$	—
Twelve months ended December 31, 2019		$	—			$	—			$	—
Book value per share:(1)
As of June 30, 2020		$	7.27			$	1.09			$	16.64
As of December 31, 2019		$	8.14			$	1.55			$	n/m	(2)

 

(1)	The historical book value per share is computed by dividing total stockholders’ equity by the number of shares outstanding at the end of the relevant period.

(2)	Pro forma book value per share as of December 31, 2019 is not meaningful as purchase accounting adjustments were calculated as of June 30, 2020.

 

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COMPARATIVE PER SHARE MARKET PRICE INFORMATION AND IMPLIED VALUE OF MERGER CONSIDERATION

The following table sets forth, for the periods indicated, the high and low closing sales prices per share for Sunrun common stock, which trades on Nasdaq under the symbol “RUN”, and for Vivint Solar common stock, which trades on NYSE under the symbol “VSLR”, on (1) July 6, 2020, the last trading day before the public announcement of the merger, and (2) August 13, 2020 the last full trading day for which high and low sales prices were available as of the date of this joint proxy statement/prospectus.

The table also includes the estimated equivalent high and low sales prices per share of Vivint Solar common stock on those dates. These equivalent high and low sales prices per share reflect the fluctuating value of Sunrun common stock that Vivint Solar stockholders would receive in exchange for each share of Vivint Solar common stock if the merger were completed on either of these dates, applying the exchange ratio of 0.55 shares of Sunrun common stock for each share of Vivint Solar common stock.

 

		Sunrun Common Stock								Vivint Solar Common Stock								Equivalent Price per Share
		High				Low				High				Low				High				Low
July 6, 2020		$	21.695			$	20.53			$	10.86			$	10.30			$	11.93			$	11.29
August 13, 2020		$	47.36			$	44.63			$	26.07			$	24.52			$	26.05			$	24.55

The market prices of shares of Sunrun common stock and Vivint Solar common stock have fluctuated since the date of the announcement of the parties’ entry into the merger agreement and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date the merger is completed, and the market price of shares of Sunrun common stock will continue to fluctuate after the completion of the merger. No assurance can be given concerning the market prices of Sunrun common stock or Vivint Solar common stock before completion of the merger or of the market price of the common stock of Sunrun after completion of the merger. Because the exchange ratio is fixed and will not be adjusted for changes in the market price of either Sunrun common stock or Vivint Solar common stock, the market price of Sunrun common stock (and, therefore, the value of the merger consideration) when received by Vivint Solar stockholders after the merger is completed could be greater than, less than or the same as shown in the table above. The above table shows only historical comparisons. These comparisons may not provide meaningful information to Sunrun stockholders in determining whether to approve the Sunrun share issuance proposal or the Vivint Solar stockholders in determining whether to approve the Vivint Solar merger proposal. Sunrun and Vivint Solar stockholders are urged to obtain current market quotations for Sunrun and Vivint Solar common stock and to review carefully the other information contained in this joint proxy statement/prospectus or incorporated by reference into this joint proxy statement/prospectus in considering whether to approve the issuance of shares of Sunrun common stock in the merger in the case of Sunrun stockholders, and whether to adopt the merger agreement in the case of Vivint Solar stockholders. See the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements based upon or relating to Sunrun’s and Vivint Solar’s expectations, assumptions, estimates, and projections. Forward-looking statements generally relate to future events or future financial or operating performance. In some cases, you can identify forward-looking statements by terms such as “may”, “will”, “should”, “would”, “expects”, “plans”, “anticipates”, “could”, “intends”, “target”, “projects”, “contemplates”, “believes”, “estimates”, “predicts”, “potential”, “will be”, “will likely result” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements may include, but are not limited to, statements concerning the expected benefits of the transaction; cost synergies and opportunities resulting from the transaction; Sunrun’s leadership position in the industry; the availability of rebates, tax credits and other financial incentives including solar renewable energy certificates, or SRECs, and federal and state incentives; regulations and policies related to net metering and interconnection limits or caps and decreases to federal solar tax credits; determinations by the Internal Revenue Service of the fair market value of Sunrun’s and Vivint Solar’s solar energy systems; changes in regulations, tariffs and other trade barriers and tax policy; the retail price of utility-generated electricity or electricity from other energy sources; federal, state and local regulations and policies governing the electric utility industry and developments or changes with respect to such regulations and policies; the ability of Sunrun and Vivint Solar to manage their supply chains (including the availability and price of solar panels and other system components and raw materials) and distribution channels and the impact of natural disasters and other events beyond their control; the ability of Sunrun and Vivint Solar and their industry to manage recent and future growth, product offering mix, and costs (including, but not limited to, equipment costs) effectively, including attracting, training and retaining sales personnel and solar energy system installers; Sunrun’s and Vivint Solar’s strategic partnerships and expected benefits of such partnerships; the sufficiency of Sunrun’s and Vivint Solar’s cash, investment fund commitments and available borrowings to meet anticipated cash needs; the need and ability of Sunrun and Vivint Solar to raise capital, refinance existing debt and finance their respective obligations and solar energy systems from new and existing investors; the potential impact of interest rates on Sunrun’s and Vivint Solar’s interest expense; the course and outcome of litigation and investigations and the ability of Sunrun and Vivint Solar to consummate the transactions contemplated by the merger agreement in a timely manner or at all. These statements are not guarantees of future performance; they reflect Sunrun’s and Vivint Solar’s current views with respect to future events and are based on assumptions and estimates and subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. Such risks, uncertainties and other factors include, without limitation:

 

•

the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement or the failure to satisfy the closing conditions;

 

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the possibility that the consummation of the proposed transactions, including the merger, is delayed or does not occur, including the failure of the parties’ stockholders to approve the proposed transactions;

 

•

uncertainty regarding the timing of the receipt of required regulatory approvals for the merger and the possibility that the parties may be required to accept conditions that could reduce or eliminate the anticipated benefits of the merger as a condition to obtaining regulatory approvals or that the required regulatory approvals might not be obtained at all;

 

•

the outcome of any legal proceedings that may be instituted against the parties or others following announcement of the transactions contemplated by the merger agreement;

 

•

challenges, disruptions and costs of closing, integrating and achieving anticipated synergies, or that such synergies will take longer to realize than expected;

 

•

risks that the merger and other transactions contemplated by the merger agreement disrupt current plans and operations that may harm the parties’ businesses;

 

•

the amount of any costs, fees, expenses, impairments and charges related to the merger;

 

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•

uncertainty as to the effects of the announcement or pendency of the merger on the market price of the parties’ respective common stock and/or on their respective financial performance;

 

•

uncertainty as to the long-term value of Sunrun’s and Vivint Solar’s common stock;

 

•

the ability of Sunrun and Vivint Solar to raise capital from third parties, including fund investors, to grow their business;

 

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any rise in interest rates which would increase the cost of capital;

 

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the business, economic and political conditions in the markets in which Sunrun and Vivint Solar operate;

 

•

the ability to meet covenants in investment funds and debt facilities;

 

•

the potential inaccuracy of the assumptions employed in calculating operating metrics;

 

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the failure of the energy industry to develop to the size or at the rate Sunrun and Vivint Solar expect; and

 

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the inability of Sunrun and Vivint Solar to finance their solar service offerings to customers on an economically viable basis.

These risks and uncertainties may be amplified by the ongoing COVID-19 pandemic, which has caused significant economic uncertainty and negative impacts on capital and credit markets. The extent to which the COVID-19 pandemic impacts Sunrun’s and Vivint Solar’s businesses, operations, and financial results, including the duration and magnitude of such effects, will depend on numerous factors, many of which are unpredictable, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the pandemic or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

Any financial projections in this joint proxy statement/prospectus are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond Sunrun’s and Vivint Solar’s control. While all projections are necessarily speculative, Sunrun and Vivint Solar believe that the preparation of prospective financial information involves increasingly higher levels of uncertainty the further out the projection extends from the date of preparation. The assumptions and estimates underlying the projected results are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. The inclusion of projections in this joint proxy statement/prospectus should not be regarded as an indication that Sunrun and Vivint Solar, or their representatives, considered or consider the projections to be a reliable prediction of future events.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein under “Risk Factors” and elsewhere, including the risk factors included in Sunrun’s and Vivint Solar’s most recent reports on Form 10-K, Form 10-Q, Form 8-K and other documents on file with the SEC. See the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus. These forward-looking statements represent estimates and assumptions only as of the date made. Unless required by federal securities laws, Sunrun and Vivint Solar assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. Investors should read this document with the understanding that Sunrun’s and Vivint Solar’s actual future results may be materially different from what Sunrun and Vivint Solar expect. Sunrun and Vivint Solar qualify all of their forward-looking statements by these cautionary statements.

 

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RISK FACTORS

In addition to the other information included or incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” beginning on page [●] of this joint proxy statement/prospectus, you should carefully consider the following risks before deciding whether to vote in favor of the Sunrun share issuance proposal and Vivint Solar merger proposal, respectively. In addition, you should read and consider the risks associated with each of Sunrun and Vivint Solar and their respective businesses. Descriptions of some of these risks can be found in Sunrun’s and Vivint Solar’s respective Annual Reports on Form 10-K for the year ended December 31, 2019, as updated or supplemented by subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this joint proxy statement/prospectus. For further information regarding the documents incorporated into this joint proxy statement/prospectus by reference, please see the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

Risks Relating to the Merger

The merger is subject to conditions, some or all of which may not be satisfied or completed on a timely basis, if at all. Failure to complete the merger could have material adverse effects on Sunrun and Vivint Solar.

The completion of the merger is subject to a number of conditions, including, among other things, the receipt of the Sunrun stockholder approval and the Vivint Solar stockholder approval and receipt of certain regulatory approvals, which make the completion and timing of the merger uncertain. See the section entitled “The Merger Agreement—Conditions to the Merger” beginning on page [●] of this joint proxy statement/prospectus for a more detailed discussion. The failure to satisfy all of the required conditions could delay the completion of the merger for a significant period of time or prevent it from occurring at all. There can be no assurance that the conditions to the completion of the merger will be satisfied or waived, that the merger will be completed or that the merger will be consummated as contemplated by the merger agreement.

If the merger is not completed or is completed on different terms than as contemplated by the merger agreement, each of Sunrun and Vivint Solar may be materially adversely affected and, without realizing any of the benefits of having completed the merger, will be subject to a number of risks, including the following:

 

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the market price of Sunrun common stock or Vivint Solar common stock could decline;

 

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reputational harm due to the adverse perception of any failure to successfully complete the merger could result;

 

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each of Sunrun and Vivint Solar could owe a substantial termination fee to the other party in specified circumstances;

 

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if the merger agreement is terminated and the Sunrun Board or the Vivint Solar Board seeks another business combination, Sunrun stockholders or Vivint Solar stockholders, as applicable, cannot be certain that Sunrun or Vivint Solar, as applicable, will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms that the other party has agreed to in the merger agreement;

 

•

time and resources, financial and otherwise, committed by Sunrun’s and Vivint Solar’s management to matters relating to the merger could otherwise have been devoted to pursuing other beneficial opportunities;

 

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Sunrun or Vivint Solar may experience negative reactions from the financial markets or from its customers, suppliers, strategic partners, investors and employees

 

•

Sunrun and Vivint Solar could be subject to litigation related to the merger or any failure to complete the merger or related to any enforcement proceeding commenced against Sunrun or Vivint Solar in connection with the merger;

 

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•

Sunrun and Vivint Solar’s abilities to retain current key employees or attract new employees may be harmed; and

 

•

Sunrun and Vivint Solar will each be required to pay its costs relating to the merger, such as, for example, legal, accounting, financial advisory and printing fees, whether or not the merger is completed.

Any delay in completing the merger may reduce or eliminate the expected benefits from the merger.

The merger is subject to a number of conditions beyond Sunrun’s and Vivint Solar’s control that may prevent, delay or otherwise materially adversely affect its completion. Sunrun and Vivint Solar cannot predict whether and when these conditions will be satisfied. There can be no assurance that either Sunrun or Vivint Solar or both parties will waive any condition to closing that is not satisfied. Furthermore, the requirements for obtaining the required clearances and approvals and the time required to satisfy any other conditions to the closing could delay the completion of the merger for a significant period of time or prevent it from occurring. Any delay in completing the merger could cause Sunrun or Vivint Solar not to realize some or all of the benefits that it expects to achieve if the merger is successfully completed within its expected timeframe. Further, delays in the completion of the merger could also result in additional transaction costs, loss of revenue or other negative effects associated with delay and uncertainty about the completion of the merger and could materially and adversely impact Sunrun’s and Vivint Solar’s ongoing business, financial condition, financial results and stock price following the completion of the merger. See the section entitled “The Merger Agreement—Conditions to the Merger” beginning on page [●] of this joint proxy statement/prospectus.

The merger is subject to the expiration or termination of applicable waiting periods and the receipt of approvals, consents or clearances from regulatory authorities that may impose conditions that could have an adverse effect on Sunrun or Vivint Solar or, if any such approvals, consents or clearances are not obtained, could prevent completion of the merger.

Before the merger may be completed, any applicable waiting period (and any extension thereof) under the HSR Act relating to the completion of the merger must have expired or terminated. In deciding whether to terminate or allow the applicable waiting period to expire, the relevant governmental entities will consider the effect of the merger within their relevant jurisdiction, including, among other things, the impact on the parties’ respective customers and suppliers. The terms and conditions of the authorizations and consents that are granted, if any, may impose requirements, limitations or costs or place restrictions on the conduct of Sunrun’s or Vivint Solar’s business or may materially delay the completion of the merger.

In addition, at any time before or after the completion of the merger, and notwithstanding the termination of applicable waiting periods under the HSR Act, the applicable regulatory authorities or any state attorney general could take such action under antitrust or other applicable laws as such authority deems necessary or desirable in the public interest. Such actions could include, among other things, seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the parties. In addition, in some circumstances, a third party could initiate a private action challenging, seeking to enjoin, or seeking to impose conditions on, the merger. Sunrun and Vivint Solar may not prevail and may incur significant costs in defending or settling any such action. For a more detailed description of the regulatory review process, see the section entitled “The Merger—Regulatory Approvals” beginning on page [●] of this joint proxy statement/prospectus.

There can be no assurance that the conditions to the completion of the merger set forth in the merger agreement relating to applicable regulatory laws will be satisfied.

 

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The merger agreement contains provisions that limit Sunrun’s and Vivint Solar’s ability to pursue alternatives to the merger, could discourage a potential third-party acquiror or merger partner from making an alternative transaction proposal, and provide that, in specified circumstances, each of Sunrun and Vivint Solar would be required to pay a termination fee.

The merger agreement contains provisions that make it more difficult for each of Sunrun and Vivint Solar to be acquired by, or enter into certain combination transactions with, a third party. The merger agreement contains certain provisions that restrict each of Sunrun’s and Vivint Solar’s ability to, among other things, solicit, initiate or knowingly encourage or facilitate any alternative transaction, engage in any discussions or negotiations with any third party concerning any alternative transaction, or provide nonpublic information to any third party. In addition, following receipt by either of Sunrun or Vivint Solar of any alternative transaction proposal that constitutes a “superior proposal”, each of Vivint Solar or Sunrun, respectively, will have an opportunity to offer to modify the terms of the merger agreement before the Sunrun Board or the Vivint Solar Board, respectively, may withdraw or qualify its recommendation with respect to the Sunrun share issuance proposal or the Vivint Solar merger proposal, respectively, in favor of such superior proposal, as described further under “The Merger Agreement—Covenants and Agreements—Changes in Board Recommendations.”

These provisions could discourage a potential third-party acquiror or merger partner that might have an interest in acquiring or combining with all or a significant portion of Sunrun or Vivint Solar or pursuing an alternative transaction from considering or proposing such a transaction.

In certain circumstances, upon termination of the merger agreement, Vivint Solar would be required to pay a termination fee of $54 million to Sunrun, and in certain circumstances, upon termination of the merger agreement, Sunrun would be required to pay a termination fee of $45 million or $107 million to Vivint Solar, each as contemplated by the merger agreement. For further discussion, see the sections entitled “The Merger Agreement—Termination” and “The Merger Agreement—Expenses and Termination Fees” beginning on pages [●] and [●], respectively, of this joint proxy statement/prospectus.

If the merger agreement is terminated and either of Sunrun or Vivint Solar determines to seek another business combination transaction, Sunrun or Vivint Solar may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the merger.

The exchange ratio is fixed and will not be adjusted in the event of any change in either Sunrun’s or Vivint Solar’s stock price or changes in operating results of either company.

Upon completion of the merger, each share of Vivint Solar common stock issued and outstanding immediately prior to the effective time (other than shares of Vivint Solar common stock owned by Sunrun, Merger Sub, any other wholly owned subsidiary of Sunrun or Vivint Solar immediately prior to the effective time, including shares of Vivint Solar common stock held in treasury by Vivint Solar, and in each case not held on behalf of third parties) will be converted into the right to receive the merger consideration, which is equal to 0.55 fully paid and nonassessable shares of Sunrun common stock and, if applicable, cash in lieu of fractional shares, less any applicable withholding taxes. This exchange ratio was fixed in the merger agreement and will not be adjusted for changes in the market price of either Sunrun common stock or Vivint Solar common stock between the dates of the signing of the merger agreement and the completion of the merger or otherwise (including a result of changes in operating results of either company).

Because the exchange ratio is fixed, changes in the price of Sunrun common stock prior to the merger will affect the value of the merger consideration that Vivint Solar stockholders will receive on the date of the merger. It is impossible to accurately predict the market price of Sunrun common stock at the completion of the merger and, therefore, impossible to accurately predict the market value of the shares of Sunrun common stock that Vivint Solar stockholders will receive in the merger. The market price for Sunrun common stock may fluctuate both prior to the completion of the merger and thereafter for a variety of reasons, including, among others,

 

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general market and economic conditions, the demand for Sunrun’s or Vivint Solar’s products and services, changes in laws and regulations, the COVID-19 pandemic, other changes in Sunrun’s and Vivint Solar’s respective businesses, operations, prospects and financial results of operations, market assessments of the likelihood that the merger will be completed, and the expected timing of the merger. Many of these factors are beyond Sunrun’s and Vivint Solar’s control. As a result, the market value represented by the exchange ratio will also vary.

We cannot assure you that, following the merger, the combined market price of Sunrun will equal or exceed what the combined market price of Sunrun common stock and Vivint Solar common stock would have been in the absence of the merger. It is possible that after the merger, the equity value of Sunrun will be less than the combined equity value of Sunrun and Vivint Solar before the merger.

Each party is subject to business uncertainties and contractual restrictions while the merger is pending, which could adversely affect each party’s business and operations.

In connection with the pendency of the merger, it is possible that some customers, suppliers, strategic partners and other persons with whom Sunrun and/or Vivint Solar has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with Sunrun or Vivint Solar, as the case may be, as a result of the merger or otherwise, which could negatively affect Sunrun’s or Vivint Solar’s respective revenues, earnings and/or cash flows, as well as the market price of Sunrun common stock or Vivint Solar common stock, regardless of whether the merger is completed.

Until the merger is completed, the merger agreement restricts each of Sunrun and Vivint Solar from taking specified actions without the consent of the other party, and requires each of Sunrun and Vivint Solar to operate in the ordinary and usual course of business consistent with past practice. Sunrun and Vivint Solar are subject to a number of interim operating covenants relating to, among other things, amendment of organizational documents, payment of dividends or entry into certain acquisitions or investments. Such limitations could adversely affect each of Sunrun’s and Vivint Solar’s business and operations prior to the completion of the merger.

Each of the risks described above may be exacerbated by delays or other adverse developments with respect to the completion of the merger. For further discussion, see the sections entitled “The Merger Agreement—Covenants and Agreements—Conduct of Business of Vivint Solar” and “The Merger Agreement—Covenants and Agreements—Conduct of Business of Sunrun” beginning on pages [●] and [●], respectively, of this joint proxy statement/prospectus.

Completion of the merger may trigger change in control or other provisions in certain customer and other agreements to which Sunrun or Vivint Solar is a party, which may have an adverse impact on the combined company’s business and result of operations following completion of the merger.

The completion of the merger may trigger change in control and other provisions in certain agreements to which Sunrun or Vivint Solar is a party. If Sunrun or Vivint Solar is unable to negotiate waivers of those provisions, counterparties may exercise their rights and remedies under the agreements, including terminating the agreements or seeking monetary damages or equitable remedies. Even if Sunrun or Vivint Solar is able to negotiate a consent or waiver, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to Sunrun or Vivint Solar. Any of the foregoing or similar developments may have an adverse impact on Sunrun’s and Vivint Solar’s business and results of operations following completion of the merger.

 

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Uncertainties associated with the merger may cause a loss of management personnel and other key employees, which could adversely affect the future business and operations of Sunrun following completion of the merger.

Sunrun and Vivint Solar are dependent on the experience and industry knowledge of their officers and other key employees to execute their business plans. Sunrun’s success after the completion of the merger will depend in part upon the ability of Sunrun to retain certain key management personnel and employees of Sunrun and Vivint Solar. Prior to the completion of the merger, current and prospective employees of Sunrun and Vivint Solar may experience uncertainty about their roles following the completion of the merger, which may have an adverse effect on the ability of each of Sunrun and Vivint Solar to attract or retain key management and other key personnel. In addition, no assurance can be given that Sunrun, after the completion of the merger, will be able to attract or retain key management personnel and other key employees to the same extent that Sunrun and Vivint Solar have previously been able to attract or retain their own employees.

The merger will involve substantial costs.

Sunrun and Vivint Solar have incurred and expect to continue to incur substantial costs and expenses relating directly to the merger and the Sunrun share issuance, including fees and expenses payable to financial advisors, other professional fees and expenses, insurance premium costs, fees and costs relating to regulatory filings and notices, SEC filing fees, printing and mailing costs and other transaction-related costs, fees and expenses. If the merger is not completed, Sunrun and Vivint Solar will have incurred substantial expenses for which no ultimate benefit will have been received by either company.

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and may not be reflective of the operating results and financial condition of Sunrun following completion of the merger.

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what Sunrun’s actual financial position or results of operations would have been had the merger been completed on the dates indicated. The unaudited pro forma condensed combined financial information is subject to a number of assumptions, and does not take into account any synergies related to the merger. Further, Sunrun’s actual results and financial position after the merger may differ materially and adversely from the unaudited pro forma condensed combined financial data that are included in this joint proxy statement/prospectus. The unaudited pro forma condensed combined financial information reflects adjustments based upon preliminary estimates of the fair value of assets to be acquired and liabilities to be assumed. The final acquisition accounting will be based upon the actual consideration transferred and the fair value of the assets and liabilities of Vivint Solar as of the date of the completion of the merger. Accordingly, the final acquisition accounting may differ materially from the unaudited pro forma condensed combined financial information reflected in this joint proxy statement/prospectus. For further discussion, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page [●] of this joint proxy statement/prospectus. For more information, see the section entitled “Selected Unaudited Pro Forma Condensed Combined Financial Information” beginning on page [●] of this joint proxy statement/prospectus.

The fairness opinions obtained by the Sunrun Board and the Vivint Solar Board from their respective financial advisors will not be updated to reflect changes in circumstances between signing the merger agreement and the completion of the merger.

Neither the Sunrun Board nor the Vivint Solar Board has obtained an updated fairness opinion as of the date of this joint proxy statement/prospectus from Credit Suisse, Sunrun’s financial advisor, or Morgan Stanley or BofA Securities, Vivint Solar’s financial advisors. Changes in the operations and prospects of Sunrun or Vivint Solar, general market and economic conditions, and other factors that may be beyond the control of Sunrun and

 

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Vivint Solar and on which the fairness opinions were based, including the COVID-19 pandemic that has caused higher than normal volatility in the financial markets generally, may alter the value of Sunrun or Vivint Solar or the trading prices of Sunrun or Vivint Solar common stock by the time the merger is completed.

The fairness opinions do not speak as of the time the merger will be completed or as of any date other than the dates of such opinions. Neither Sunrun nor Vivint Solar anticipates asking their respective financial advisors to update their fairness opinions. The fairness opinions of Credit Suisse, Morgan Stanley and BofA Securities are included as Annexes B, C and D, respectively, to this joint proxy statement/prospectus. For a description of the fairness opinion that the Sunrun Board received from its financial advisor and a summary of the material financial analyses the financial advisor provided to the Sunrun Board in connection with rendering such opinion, see the section entitled “The Merger—Opinion of Sunrun’s Financial Advisor” beginning on page [●] of this joint proxy statement/prospectus. For a description of the opinions that the Vivint Solar Board received from its financial advisors and a summary of the material financial analyses such financial advisors provided to the Vivint Solar Board in connection with rendering such opinions, see the section entitled “The Merger—Opinions of Vivint Solar’s Financial Advisors” beginning on page [●] of this joint proxy statement/prospectus.

For a description of the factors considered by the Sunrun Board in determining to approve the merger and the Sunrun share issuance, see the section entitled “The Merger—Reasons for the Merger—Sunrun Board’s Recommendation and Reasons for the Merger” beginning on page [●] of this joint proxy statement/prospectus. For a description of the factors considered by the Vivint Solar Board in determining to approve the merger agreement and the merger, see the section entitled “The Merger— Reasons for the Merger—Vivint Solar Board’s Recommendation and Reasons for the Merger” beginning on page [●] of this joint proxy statement/prospectus.

Sunrun’s executive officers and directors and Vivint Solar’s executive officers and directors have interests in the merger that may be different from, or in addition to, Sunrun’s stockholders’ and Vivint Solar’s stockholders’ interests.

In considering the recommendation of the Sunrun Board that Sunrun stockholders approve the Sunrun share issuance proposal and Sunrun adjournment proposal and the recommendation of the Vivint Solar Board that Vivint Solar stockholders approve the Vivint Solar merger proposal, the Vivint Solar merger-related compensation proposal and the Vivint Solar adjournment proposal, stockholders should be aware that certain directors and executive officers of Sunrun and certain directors and executive officers of Vivint Solar have interests in the merger that may be different from, or in addition to, the interests of such stockholders generally. The Sunrun Board was aware of the interests of Sunrun’s directors and executive officers, the Vivint Solar Board was aware of the interests of Vivint Solar’s directors and executive officers, and each board carefully considered these interests, among other matters, in evaluating the terms and structure, and overseeing the negotiation, of the merger, in approving the merger agreement and the transactions contemplated thereby, including the merger, and in making its recommendations to its stockholders. Additional interests of the directors and executive officers of Sunrun in the merger include that the members of the Sunrun Board will continue to be directors of Sunrun and executive officers of Sunrun will continue to be executive officers of Sunrun following the consummation of the merger. Additional interests of the directors and executive officers of Vivint Solar in the merger include the treatment in the merger of Vivint Solar stock options or Vivint Solar RSU awards held by these directors and/or executive officers, as applicable, certain severance payments and other benefits that Vivint Solar executive officers are entitled to receive upon a qualifying termination of employment in connection with the completion of the merger, indemnification and insurance for current and former directors and executive officers of Vivint Solar as provided under the merger agreement, that at the completion of the merger, the Sunrun Board will be expanded to add two directors including David Bywater, Chief Executive Officer of Vivint Solar, and another member of the Vivint Solar Board, that David Bywater entered into an employment agreement with Sunrun providing for certain payments and benefits following the consummation of the merger, that L. Chance Allred, Chief Sales Officer of Vivint Solar, entered into an employment agreement with Sunrun providing for certain payments and benefits following the consummation of the merger, and that each executive officer of Vivint Solar is eligible for awards under a retention pool established in connection with the merger. See the sections entitled

 

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“The Merger—Interests of Sunrun’s Directors and Executive Officers in the Merger” and “The Merger—Interests of Vivint Solar’s Directors and Executive Officers in the Merger” beginning on pages [●] and [●], respectively, of this joint proxy statement/prospectus for a more detailed description of these interests. As a result of these interests, these directors (as applicable) and executive officers might be more likely to support and to vote in favor of the proposals described in this joint proxy statement/prospectus than if they did not have these interests. Sunrun stockholders and Vivint Solar stockholders should consider whether these interests might have influenced these directors (as applicable) and executive officers to recommend voting in favor of the Sunrun share issuance proposal and the Vivint Solar merger proposal, respectively.

Following the merger, the composition of the Sunrun Board will be different than the current composition.

The Sunrun Board currently consists of seven directors. At or prior to the effective time, Sunrun will increase the number of directors that comprise the Sunrun Board at the effective time by two directors and fill such newly created directorships with (1) one director serving on the Vivint Solar Board who will be designated by Vivint Solar (who will be designated as a Sunrun Class III director) and (2) David Bywater (who will be designated as a Sunrun Class I director). See the section entitled “The Merger—Governance of Sunrun” beginning on page [●] of this joint proxy statement/prospectus. This new composition of the Sunrun Board may affect the future decisions of Sunrun.

Vivint Solar stockholders will not be entitled to dissenters’ or appraisal rights in the merger.

Dissenters’ or appraisal rights are statutory rights that, if applicable under law, enable stockholders of a corporation to dissent from an extraordinary transaction, such as a merger, and to demand that such corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. Under the DGCL, stockholders do not have appraisal rights if the shares of stock they hold, at the record date for determination of stockholders entitled to vote at the meeting of stockholders to act upon the merger or consolidation, are either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available if stockholders are required by the terms of the merger agreement to accept for their shares anything other than (a) shares of stock of the surviving corporation, (b) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (c) cash in lieu of fractional shares or (d) any combination of clauses (a)-(c).

Because Vivint Solar common stock is listed on NYSE, a national securities exchange, and is expected to continue to be so listed on the record date, and because the merger otherwise satisfies the foregoing requirements, holders of Vivint Solar common stock will not be entitled to dissenters’ or appraisal rights in the merger with respect to their shares of Vivint Solar common stock.

The COVID-19 pandemic has led to periods of significant volatility in financial and other markets and could harm the business and results of operations for each of Sunrun and Vivint Solar following the completion of the merger.

The COVID-19 pandemic is having an unprecedented impact on the U.S. economy as federal, state and local governments react to this public health crisis, and has impacted, and could continue to impact, the business of each of Sunrun and Vivint Solar and created significant uncertainties for the solar industry and the economy in general. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on the businesses of Sunrun and Vivint Solar, and there is no guarantee that efforts by Sunrun and Vivint Solar to address the adverse impacts of the COVID-19 pandemic will be effective. The impact to date has included periods of significant volatility in financial and other markets. This volatility, if it continues, could have an adverse impact on Sunrun’s and Vivint Solar’s customers, businesses, financial conditions and results of operations.

 

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In addition, recent actions by U.S. federal and state governments to address the COVID-19 pandemic, including travel restrictions, quarantines, return-to-work restrictions and site closures, may also have a significant adverse effect on the jurisdictions in which Sunrun and Vivint Solar conduct their businesses as well as on the companies’ ability to staff sales and operations centers and install and maintain solar energy systems in the field. The extent of impacts resulting from the COVID-19 pandemic and other events beyond the control of Sunrun and Vivint Solar will depend on future developments, which are highly uncertain and cannot be predicted.

In addition, the COVID-19 pandemic has resulted in business disruption to Sunrun and Vivint Solar, and whether either company is able to recover from such a business disruption on a timely basis, the merger and Sunrun’s business, financial conditions and results of operations following the completion of the merger could be adversely affected. The merger and efforts to integrate the businesses of Sunrun and Vivint Solar may also be delayed and/or adversely affected by the COVID-19 pandemic, and become more costly. Each of Sunrun and Vivint Solar may incur additional costs to remedy damages caused by such disruptions, which could adversely affect their businesses, financial conditions and results of operations.

The amended and restated bylaws of Sunrun will govern Sunrun following the merger and provide that a state or federal court located within the State of Delaware will be the sole and exclusive forum for substantially all intracorporate disputes between Sunrun and its stockholders and the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit Sunrun stockholders’ ability to obtain a favorable judicial forum for disputes with Sunrun or its directors, officers or employees.

Sunrun’s amended and restated bylaws (the “Sunrun bylaws”) provide that, unless Sunrun consents to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on Sunrun’s behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of Sunrun’s directors, officers or other employees to Sunrun or to its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or (iv) any action asserting a claim governed by the internal affairs doctrine, shall in each case be a state or federal court located within the state of Delaware, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. In addition, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Sunrun bylaws also provide that, unless Sunrun consents to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions in a corporation’s certificate of incorporation are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, Sunrun would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the Sunrun bylaws. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Sunrun or its directors, officers, or other employees, which may discourage lawsuits against Sunrun and its directors, officers and other employees. If a court were to find either exclusive forum provision in the Sunrun bylaws to be inapplicable or unenforceable in an action, Sunrun may incur significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm its business, financial conditions and results of operation.

 

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Vivint Solar’s amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all intracorporate disputes between Vivint Solar and its stockholders and the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit Vivint Solar’s stockholders’ ability to obtain a favorable judicial forum for disputes with Vivint Solar or its directors, officers or employees.

Vivint Solar’s amended and restated certificate of incorporation (the “Vivint Solar certificate of incorporation”) provides that, to the fullest extent permitted by law and unless it consents to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of Vivint Solar, (2) action asserting a claim of breach of a fiduciary duty owed by any of Vivint Solar’s directors or officers to Vivint Solar or its stockholders, (3) action asserting a claim against Vivint Solar or any of its directors or officers arising pursuant to any provision of the DGCL, the Vivint Solar certificate of incorporation or the Vivint Solar bylaws or (4) action asserting a claim governed by the internal affairs doctrine. In addition, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, Vivint Solar’s amended and restated bylaws (as amended, the “Vivint Solar bylaws”) provide that, unless Vivint Solar consents to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions in a corporation’s certificate of incorporation are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, Vivint Solar would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the Vivint Solar certificate of incorporation and the Vivint Solar bylaws. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Vivint Solar or its directors, officers, or other employees, which may discourage lawsuits against Vivint Solar and its directors, officers and other employees. If a court were to find either the exclusive-forum provision in the Vivint Solar certificate of incorporation or the exclusive-forum provision in the Vivint Solar bylaws to be inapplicable or unenforceable in an action, Vivint Solar may incur significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm Vivint Solar’s business, financial conditions and results of operation.

An adverse judgment in any litigation challenging the merger may prevent the merger from becoming effective or from becoming effective within the expected timeframe.

Whether or not the merger is completed, each of Sunrun and Vivint Solar could be subject to litigation related to the merger or any failure to complete the merger or related to any enforcement proceeding commenced against Sunrun or Vivint Solar to perform its obligations under the merger agreement. In particular, it is possible that Sunrun stockholders and Vivint Solar stockholders may file lawsuits challenging the merger or the other transactions contemplated by the merger agreement, which may name Sunrun, the Sunrun Board, Vivint Solar and/or the Vivint Solar Board as defendants. Any of these risks could materially and adversely impact Sunrun’s or Vivint Solar’s ongoing business, financial condition, financial results and stock price. The outcome of any such lawsuits cannot be assured, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the merger on the agreed-upon terms, such an injunction may delay the consummation of the merger in the expected timeframe, or may prevent the merger from being consummated altogether. Whether or not any plaintiff’s claim is successful, this type of litigation may result in significant costs and divert management’s attention and resources, which could adversely affect Sunrun’s and Vivint Solar’s businesses, financial conditions and results of operations.

 

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As a result of the merger, Vivint Solar may be subject to adverse California property tax consequences and may seek to engage in certain financing transactions with a third party prior to the closing of the merger in an effort to mitigate such risk.

The State of California provides an exclusion (the “Solar Exclusion”) from the assessment of California property taxes for qualifying “active solar energy systems” installed as fixtures before January 1, 2025, provided such systems are locally rather than centrally assessed (“Eligible Property”). However, the Solar Exclusion is not a permanent exclusion from the assessment of property tax. Once a change in ownership of the Eligible Property occurs, the Eligible Property may be subject to reassessment and California property taxes may become due.

Vivint Solar, through certain of its subsidiaries, owns solar energy systems that constitute Eligible Property (the “California PV Systems”). To the extent Vivint Solar or its subsidiaries are considered the tax owners of the California PV Systems for purposes of the California Revenue and Tax Code (“CR&T”), the merger could result in a change of control of the California PV Systems triggering the loss of the Solar Exclusion and the imposition of California property taxes, which could be significant to the business of Vivint Solar and the combined company.

In order to potentially avoid triggering a change in ownership of the California PV Systems, Vivint Solar and Sunrun are contemplating the sale by Vivint Solar to a third party of 50% of the interests in a portfolio of solar systems, including a significant number of the California PV Systems, to be effected immediately prior to the consummation of the merger (the “Cash Equity Transaction”). Any Cash Equity Transaction would be structured with the intention that neither the Cash Equity Transaction nor the merger would trigger a change in ownership under the CR&T and therefore potentially maintain the Solar Exclusion and avoid the imposition of the California property taxes described above. In connection with any Cash Equity Transaction, the parties will seek to minimize capital costs, increase liquidity, and limit the impact of property taxes and any income taxes that may be payable resulting from the Cash Equity Transaction or the merger. There can be no assurance that any Cash Equity Transaction will be completed and, even if it is, there can be no assurance that the merger will not result in the imposition of California real property tax.

Risks Relating to Sunrun Upon Completion of the Merger

Sunrun may be unable to successfully integrate the business of Vivint Solar and realize the anticipated benefits of the merger.

The success of the merger will depend, in part, on Sunrun’s ability to successfully integrate Vivint Solar’s business, and realize the anticipated benefits, including synergies, cost savings, innovation and technological opportunities and operational efficiencies from the merger in a manner that does not materially disrupt existing customer, strategic partner, supplier and employee relationships and does not result in decreased revenues due to losses of customers, or decreases in sales of its products and service offerings. If Sunrun is unable to achieve these objectives within the anticipated timeframe, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, and the value of Sunrun common stock may decline. Sunrun may fail to realize some or all of the anticipated benefits of the merger if the integration process takes longer than expected or is more costly than expected.

The integration of Vivint Solar into Sunrun may result in material challenges, including, without limitation:

 

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managing a larger, more complex combined business;

 

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maintaining employee morale and retaining key management and other employees;

 

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retaining existing business and operational relationships, including customers, strategic partners, suppliers and employees and other counterparties, as may be impacted by contracts containing consent and/or other provisions that may be triggered by the merger, and attracting new business and operational relationships;

 

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consolidating corporate and administrative infrastructures and eliminating duplicative operations, including unanticipated issues in integrating information technology, communications and other systems;

 

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coordinating geographically separate organizations; and

 

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unforeseen expenses or delays associated with the merger.

Many of these factors will be outside of Sunrun’s and/or Vivint Solar’s control, and any one of them could result in delays, increased costs, decreases in the amount of expected revenues and other adverse impacts, which could materially affect Sunrun’s financial position, results of operations and cash flows following the completion of the merger.

Due to legal restrictions, Sunrun and Vivint Solar are currently permitted to conduct only limited planning for the integration of Vivint Solar into Sunrun following the completion of the merger. The actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized on a timely basis, if at all.

Activities undertaken during the pendency of the merger to complete the merger and the other transactions contemplated by the merger agreement may divert management attention and resources.

If the efforts and actions required of Sunrun and Vivint Solar in order to consummate the merger and the other transactions contemplated by the merger agreement are more difficult, costly or time consuming than expected, such efforts and actions could result in the diversion of each company’s management’s attention and resources or the disruption or interruption of, or the loss of momentum in, each company’s ongoing businesses, which could adversely affect the businesses, financial results and results of operations of Sunrun and Vivint Solar, as applicable.

Upon completion of the merger, Vivint Solar stockholders will have different rights under Sunrun’s governing documents than they do currently under Vivint Solar’s governing documents.

Upon completion of the merger, Vivint Solar stockholders will no longer be stockholders of Vivint Solar, but will instead become stockholders of Sunrun and their rights as stockholders will be governed by the terms of the Sunrun certificate of incorporation and the Sunrun bylaws. The terms of the Sunrun certificate of incorporation and the Sunrun bylaws will be in some respects different than the terms of the Vivint Solar certificate of incorporation and the Vivint Solar bylaws, which currently govern the rights of Vivint Solar stockholders.

For a more complete description of the different rights associated with shares of Vivint Solar common stock and shares of Sunrun common stock after the completion of the merger, see the section entitled “Comparative Rights of Stockholders” beginning on page [●] of this joint proxy statement/prospectus.

Current Sunrun and Vivint Solar stockholders will be diluted by the merger.

Sunrun stockholders and Vivint Solar stockholders currently have the right to vote for their respective directors and on other matters affecting their respective companies. Immediately after the completion of the merger, each Sunrun stockholder will remain a stockholder of Sunrun, but with a percentage ownership that will be smaller than such stockholder’s percentage of Sunrun as of immediately prior to the merger, and each Vivint Solar stockholder will become a stockholder of Sunrun, but with a percentage ownership that will be smaller than such stockholder’s percentage of Vivint Solar immediately prior to the merger. As a result of this reduced ownership percentage, Sunrun stockholders and Vivint Solar stockholders will generally have less voting power after the merger than they did prior to the merger. We estimate that, based on the number of shares of Sunrun common stock and Vivint Solar common stock outstanding and reserved for issuance as of the close of business

 

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on the Sunrun record date and the Vivint Solar record date, respectively, immediately following completion of the merger, former holders of Vivint Solar common stock will own approximately [●]% of the common stock of Sunrun on a fully diluted basis and pre-merger holders of Sunrun common stock will own approximately [●]% of the common stock of Sunrun on a fully diluted basis.

The future results of Sunrun may be adversely impacted if Sunrun does not effectively manage its complex operations following the completion of the merger.

Following the completion of the merger, the size of Sunrun’s business will be significantly larger than the current size of either Vivint Solar’s business or Sunrun’s business. Sunrun’s ability to successfully manage this expanded business will depend, in part, upon management’s ability to design and implement strategic initiatives that address not only the integration of Sunrun and Vivint Solar, but also the increased scale and scope of the combined business with its associated increased costs and complexity. There can be no assurances that Sunrun will be successful in integrating the businesses or that it will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the merger.

Sunrun expects to incur substantial expenses related to the completion of the merger and the integration of Vivint Solar into Sunrun.

Sunrun is expected to incur substantial expenses in connection with the completion of the merger and the integration of a large number of processes, policies, procedures, operations, technologies and systems of Vivint Solar into Sunrun in connection with the merger. The substantial majority of these costs will be non-recurring expenses related to the merger and facilities and systems consolidation costs. Sunrun may incur additional costs or suffer loss of business under third-party contracts that are terminated or that contain change in control or other provisions that may be triggered by the completion of the merger, and/or losses of customers, and may also incur costs to retain certain key management personnel and employees. Sunrun will also incur transaction fees and costs related to formulating integration plans for the combined business, and the execution of these plans may lead to additional unanticipated costs and time delays. These incremental transaction-related costs may exceed the savings Sunrun expects to achieve from the elimination of duplicative costs and the realization of other efficiencies related to the integration of the businesses, particularly in the near term and in the event there are material unanticipated costs. Factors beyond Sunrun’s and Vivint Solar’s control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately.

The market price of Sunrun common stock after the merger is completed may be affected by factors different from those affecting the price of Sunrun common stock or Vivint Solar common stock before the merger is completed.

Upon completion of the merger, holders of Vivint Solar common stock will become holders of Sunrun common stock. As the businesses of Sunrun and Vivint Solar are different, the results of operations as well as the price of Sunrun common stock after the merger may, in the future, be affected by factors different from those factors affecting each of Sunrun and Vivint Solar as an independent stand-alone company. Sunrun will face additional risks and uncertainties to which each of Sunrun and Vivint Solar may currently not be exposed. As a result, the market price of Sunrun’s shares may fluctuate significantly following completion of the merger. For a discussion of Sunrun’s businesses and Vivint Solar’s businesses and of some important factors to consider in connection with those businesses, see the documents incorporated by reference into this joint proxy statement/prospectus and referred to under the section “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

The market price of Sunrun common stock may decline as a result of the merger, including as a result of some Sunrun stockholders and/or Vivint Solar stockholders adjusting their portfolios.

The market price of Sunrun common stock may decline as a result of the merger if, among other things, the operational cost savings estimates in connection with the integration of Sunrun’s and Vivint Solar’s businesses

 

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are not realized, there are unanticipated negative impacts on Sunrun’s financial position, or if the transaction costs related to the merger are greater than expected. The market price may also decline if Sunrun does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the transactions on Sunrun’s financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.

In addition, sales of Sunrun common stock after the completion of the merger may cause the market price of such common stock to decrease. It is estimated that Sunrun will issue approximately [●] shares of Sunrun common stock in connection with the merger, based on the number of outstanding shares, including shares to be issued under Vivint Solar’s equity awards, of Vivint Solar common stock as of [●], 2020. Vivint Solar stockholders may decide not to hold the shares of Sunrun common stock they will receive in the merger. Certain Vivint Solar stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of Sunrun common stock that they receive in the merger. Sunrun stockholders may decide not to continue to hold their shares of Sunrun common stock following completion of the merger. Certain Sunrun stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell their shares of common stock following completion of the merger. Such sales of Sunrun common stock could have the effect of depressing the market price for Sunrun common stock.

Any of these events may make it more difficult for Sunrun to sell equity or equity-related securities, dilute stockholders’ ownership interest in Sunrun and have an adverse impact on the price of Sunrun common stock.

Sunrun’s and Vivint Solar’s operations require substantial ongoing capital, and if financing is not available to Sunrun on acceptable terms, if and when needed, its operations, growth and prospects could be negatively affected.

Sunrun’s and Vivint Solar’s respective businesses are capital intensive. Following the merger, Sunrun is expected to incur significant costs on an ongoing basis to continue its operations, expand its markets, and to pay any significant unplanned or accelerated expenses or for new significant strategic investments. For example, Sunrun may need or seek to raise capital from third-party fund investors and lenders. If it is unable to do so when needed, or on desirable terms, it may be unable to finance the deployment of new solar energy systems, or its cost of capital could increase and its liquidity may be constrained, any of which could have a material adverse effect on Sunrun’s business, financial condition and results of operations.

Each of Sunrun and Vivint Solar may also need or want to raise additional financing for working capital, capital expenditures, acquisitions or other general corporate purposes in connection with the merger. Sunrun’s or Vivint Solar’s ability to raise capital from third-party fund investors and lenders to fund its operations and growth, or to refinance its existing indebtedness, will depend on, among other factors, Sunrun’s or Vivint Solar’s financial position and performance, as well as prevailing market conditions and other factors beyond Sunrun’s and Vivint Solar’s control, such as any decisions by credit ratings agencies with respect to credit ratings that they may maintain with respect to Sunrun or Vivint Solar. Any concerns regarding Sunrun’s or Vivint Solar’s business and liquidity, uncertainty regarding the timing and completion of the merger and the capital structure of Vivint Solar and Sunrun following the merger and general market conditions could negatively impact Sunrun’s and Vivint Solar’s ability to access the capital markets or to raise funds on acceptable terms, or at all.

Sunrun’s ability to use Sunrun’s and Vivint Solar’s net operating loss and tax credit carryforwards to offset future taxable income may be subject to limitation, which could result in higher tax liabilities.

As of December 31, 2019, Sunrun had U.S. federal and state net operating loss carryforwards, or NOLs, of approximately $0.7 billion and $1.3 billion, respectively, which begin expiring in varying amounts in 2028 and 2024, respectively, if unused. Sunrun’s U.S. federal and certain state NOLs generated in tax years beginning after

 

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December 31, 2017 total approximately $0.5 billion and $0.1 billion, respectively, have indefinite carryover periods, and do not expire. As of December 31, 2019, Vivint Solar had U.S. federal and state NOLs of $8.1 million and $230.9 million, respectively. Vivint Solar’s U.S. federal NOLs do not expire and Vivint Solar’s state NOLs expire in varying amounts from 2029 through 2039, if unused. Vivint Solar also may carry NOLs back to earlier tax years under the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”). Additionally, as of December 31, 2019, Sunrun and Vivint Solar have approximately $18.8 million and $48.5 million of investment tax credits, respectively, which begin expiring in varying amounts in 2028 and 2036, respectively, if unused. These NOLs and other tax carryforwards have changed during fiscal year 2020, though the precise extent of the change will not be known until the companies file their income tax returns for 2020.

Sunrun’s ability to utilize its and Vivint Solar’s NOLs and tax credit carryforwards to offset future taxable income may be limited due to certain ownership change limitations under Section 382 and 383 of the Code, and similar state provisions. Sunrun has not yet completed its analysis to determine whether its or Vivint Solar’s tax assets will be limited by Section 382 and 383. Based on the preliminary analysis, it is anticipated that both Sunrun and Vivint Solar may undergo an ownership change. Additionally, states may impose other limitations on the use of state NOLs and tax credit carryforwards. For example, California has recently suspended the use of NOLs and limited the use of certain tax credits for taxable years beginning in 2020 through 2022. Any of these limitations may result in the expiration of Sunrun’s or Vivint Solar’s NOLs or other tax assets before utilization.

Other Risks Relating to Sunrun and Vivint Solar

Sunrun’s and Vivint Solar’s businesses are and will be subject to the risks described above. In addition, Sunrun and Vivint Solar are, and will continue to be, subject to the risks described in, as applicable, the Sunrun Annual Report on Form 10-K for the year ended December 31, 2019, and the Vivint Solar Annual Report on Form 10-K for the year ended December 31, 2019, as updated or supplemented by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this joint proxy statement/prospectus. See the section “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus for the location of information incorporated by reference into this joint proxy statement/prospectus.

 

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THE SUNRUN VIRTUAL SPECIAL MEETING

This joint proxy statement/prospectus is being provided to Sunrun stockholders as part of a solicitation of proxies by the Sunrun Board for use at the Sunrun virtual special meeting to be held at the time and place specified below and at any properly convened meeting following an adjournment or postponement thereof. This joint proxy statement/prospectus provides Sunrun stockholders with information they need to know to be able to vote or instruct their vote to be cast at the Sunrun virtual special meeting.

Date, Time and Place of the Virtual Special Meeting

The Sunrun virtual special meeting will be held exclusively online via live audio-only webcast on [●], 2020 at [●] Pacific Time. The Sunrun virtual special meeting can be accessed by visiting http://virtualshareholdermeeting.com/Sunrun2020SM, where you will be able to vote your shares and submit questions during the Sunrun virtual special meeting webcast by logging in to the website listed above using the 16-digit control number included in your proxy card. Online check-in will begin at [●] Pacific Time, and we encourage you to allow ample time for the online check-in procedures. Sunrun intends to mail this joint proxy statement/prospectus and the enclosed form of proxy to its stockholders entitled to vote at the Sunrun virtual special meeting on or about [●], 2020.

Matters to be Considered

At the Sunrun virtual special meeting, Sunrun stockholders will be asked to consider and vote on the following:

 

1.

Approval of the Sunrun Share Issuance. To vote on a proposal to approve the issuance of Sunrun common stock, par value $0.0001 per share, to Vivint Solar stockholders in connection with the merger contemplated by the merger agreement; and

 

2.

Adjournment of the Sunrun Virtual Special Meeting. To vote on a proposal to approve the adjournment of the Sunrun virtual special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Sunrun virtual special meeting to approve the Sunrun share issuance proposal.

Completion of the merger is conditioned on the approval of the Sunrun share issuance proposal.

Recommendation of the Sunrun Board

On July 6, 2020, the Sunrun Board unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the merger, and determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger and the Sunrun share issuance, are advisable and fair to and in the best interests of Sunrun and its stockholders. Accordingly, the Sunrun Board unanimously recommends that Sunrun stockholders vote “FOR” the Sunrun share issuance proposal and “FOR” the Sunrun adjournment proposal.

Sunrun stockholders should carefully read this joint proxy statement/prospectus, including any documents incorporated by reference, and the annexes in their entirety for more detailed information concerning the merger and the other transactions contemplated by the merger agreement.

Sunrun Record Date; Sunrun Stockholders Entitled to Vote

Only holders of record of Sunrun common stock at the close of business on the Sunrun record date will be entitled to notice of, and to vote at, the Sunrun virtual special meeting or any adjournments or postponements thereof.

 

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As of the close of business on the Sunrun record date, there were [●] shares of Sunrun common stock outstanding and entitled to vote at the Sunrun virtual special meeting. Each share of Sunrun common stock outstanding on the Sunrun record date entitles the holder thereof to one vote on each proposal to be considered at the Sunrun virtual special meeting.

Your vote is important. We expect that many Sunrun stockholders will not attend the Sunrun virtual special meeting, and instead will be represented by proxy. Most Sunrun stockholders have a choice of submitting a proxy to vote their shares via the Internet, by using a toll-free telephone number, or by returning a completed Sunrun proxy card or voting instruction form. Please check your notice, proxy card or the information forwarded by your broker, bank or other holder of record, including by a Sunrun employee savings plan, to see which options are available to you. These Internet and telephone procedures have been designed to authenticate Sunrun stockholders, to allow you to vote your shares, and to confirm that your instructions have been properly recorded. The Internet and telephone facilities for Sunrun stockholders of record to submit proxies will close at [●] on [●], 2020. If your shares are held through a broker, bank or other holder of record, including by a Sunrun employee savings plan, and Internet or telephone facilities are made available to you, these facilities may close sooner than those for Sunrun stockholders of record.

You can revoke your proxy at any time before it is exercised by delivering a properly executed, later-dated proxy (including a proxy submitted by Internet or telephone), by delivering a written revocation before the Sunrun virtual special meeting or by voting at the Sunrun virtual special meeting. Executing your proxy in advance will not limit your right to vote at the Sunrun virtual special meeting if you decide to attend the Sunrun virtual special meeting. However, if your shares are held in the name of a broker, bank or other holder of record, you cannot vote at the Sunrun virtual special meeting unless you have a legal proxy, executed in your favor, from the holder of record.

All shares entitled to vote and represented by properly executed proxies received prior to the Sunrun virtual special meeting and not revoked will be voted at the Sunrun virtual special meeting in accordance with your instructions. If you sign and return your proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Sunrun Board recommends for such proposal.

Subject to health concerns relating to COVID-19, which may require Sunrun to implement alternative procedures to protect the health and welfare of Sunrun’s employees and stockholders, a complete list of Sunrun stockholders entitled to vote at the Sunrun virtual special meeting will be available for examination by any Sunrun stockholder in the Corporate Secretary’s Office at Sunrun Inc., 225 Bush Street, Suite 1400, San Francisco, California 94104, for purposes pertaining to the Sunrun virtual special meeting, during ordinary business hours for a period of ten days before the Sunrun virtual special meeting, and at the Sunrun virtual special meeting. A complete list of Sunrun stockholders entitled to vote at the Sunrun virtual special meeting will also be available for inspection during the Sunrun virtual special meeting at http://virtualshareholdermeeting.com/Sunrun2020SM by logging in with your 16-digit control number(s).

Voting by Sunrun’s Directors and Executive Officers

As of the close of business on the Sunrun record date, directors and executive officers of Sunrun and their affiliates owned and were entitled to vote [●] shares of Sunrun common stock, or approximately [●]% of the shares of common stock outstanding on that date. It is currently expected that Sunrun’s directors and executive officers will vote their shares of Sunrun common stock in favor of each of the proposals to be considered at the Sunrun virtual special meeting although none of such directors or executive officers have entered into an agreement obligating them to do so. For information with respect to Sunrun common stock owned by directors and executive officers of Sunrun, please see Sunrun’s definitive proxy statement on Schedule 14A, filed with the SEC on April 17, 2020 and incorporated by reference into this joint proxy statement/prospectus.

The number of shares reflected above does not include shares underlying outstanding Sunrun stock options or Sunrun restricted stock unit awards.

 

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Quorum

The presence at the Sunrun virtual special meeting, virtually or represented by proxy, of the holders of a majority of the voting power of the stock issued and outstanding and entitled to vote as of the Sunrun record date, will constitute a quorum for the transaction of business at the Sunrun virtual special meeting.

Abstentions will count for the purpose of determining the presence of a quorum for the transaction of business at the Sunrun virtual special meeting.

Required Vote

The required votes to approve the Sunrun proposals are as follows:

 

•

The Sunrun share issuance proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of Sunrun common stock, present or represented by proxy at the Sunrun virtual special meeting, and entitled to vote on the Sunrun share issuance proposal. The required vote of holders of Sunrun common stock to approve the Sunrun share issuance proposal is based on the number of shares that are present virtually or represented by proxy at the Sunrun virtual special meeting and entitled to vote on the proposal, not on the number of outstanding shares of Sunrun common stock. Brokers, banks and other nominees do not have discretionary authority to vote on this proposal.

 

•

The Sunrun adjournment proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of Sunrun common stock, present or represented by proxy at the Sunrun virtual special meeting, and entitled to vote on the Sunrun adjournment proposal. The required vote of holders of Sunrun common stock to approve the Sunrun adjournment proposal is based on the number of shares that are present virtually or represented by proxy at the Sunrun virtual special meeting and entitled to vote on the proposal, not on the number of outstanding shares of Sunrun common stock. Brokers, banks and other nominees do not have discretionary authority to vote on this proposal.

Voting by Holders of Record

If you were the record holder of your shares of Sunrun common stock as of the Sunrun record date, you may vote your shares of Sunrun common stock at the Sunrun virtual special meeting via the virtual meeting website. Any Sunrun stockholder can attend the Sunrun virtual special meeting by visiting http://virtualshareholdermeeting.com/Sunrun2020SM, where stockholders may vote and submit questions during the Sunrun virtual special meeting webcast. Additionally, you may submit your proxy authorizing the voting of your shares of Sunrun common stock at the Sunrun virtual special meeting by mail, by telephone or via the Internet.

Voting via Proxies Submitted by the Internet or by Telephone

 

•

To submit your proxy via the Internet, go to www.proxyvote.com. Have your Sunrun proxy card in hand when you access the website and follow the instructions to vote your shares.

 

•

To submit your proxy by telephone, call (800) 690-6903. Have your Sunrun proxy card in hand when you call and then follow the instructions to vote your shares.

 

•

If you submit a proxy to vote your shares via the Internet or by telephone, you must do so no later than [●] on [●], 2020.

Voting via Proxies Submitted by Mail

As an alternative to submitting your proxy via the Internet or by telephone, you may submit your proxy by mail.

 

•

To submit your proxy by mail, simply mark, sign and date your Sunrun proxy card and return it in the pre-paid envelope that has been provided, or in an envelope addressed to: Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood NY 11717.

 

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•

If you submit a proxy to vote your shares by mail, your Sunrun proxy card must be received no later than [●] on [●], 2020.

Treatment of Abstentions; Failure to Vote

For purposes of the Sunrun virtual special meeting, an abstention occurs when a Sunrun stockholder attends the Sunrun virtual special meeting, either by attending the Sunrun virtual special meeting or by proxy, but abstains from voting. For each of the Sunrun share issuance proposal and the Sunrun adjournment proposal, if a Sunrun stockholder present at the Sunrun virtual special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have the same effect as a vote cast “AGAINST” such proposal. If a Sunrun stockholder is not present at the Sunrun virtual special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal. Sunrun does not intend to call a vote on the Sunrun adjournment proposal if the Sunrun share issuance proposal has been approved at the Sunrun virtual special meeting.

Shares Held in Street Name / Broker Non-Votes

If your shares of Sunrun common stock are held in an account at a bank, broker or other nominee holder of record (i.e., in “street name”), you must provide the record holder of your shares with instructions on how to vote the shares. Please follow the voting instructions provided by the bank, broker or other nominee. You may not vote shares held in street name by returning a Sunrun proxy card directly to Sunrun or by voting at the Sunrun virtual special meeting unless you provide a “legal proxy”, which you must obtain from your bank, broker or other nominee. Further, banks, brokers or other nominees who hold shares of Sunrun common stock on behalf of their customers may not give a proxy to Sunrun to vote those shares with respect to the Sunrun share issuance proposal and the Sunrun adjournment proposal without specific instructions from their customers, as banks, brokers and other nominees do not have discretionary voting power on these “non-routine” matters. Under the current rules of Nasdaq, each of the proposals to be considered at the Sunrun virtual special meeting as described in this joint proxy statement/prospectus are considered non-routine. Therefore banks, brokers and other nominee holders of record do not have discretionary authority to vote on any of the proposals to be considered at the Sunrun virtual special meeting. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power. If a beneficial owner of shares of Sunrun common stock held in street name does not give voting instructions to the broker, bank or other nominee, then those shares will not be present or represented by proxy at the Sunrun virtual special meeting. As a result, broker non-votes would not have any effect on the outcome of the Sunrun share issuance proposal or Sunrun adjournment proposal.

Attendance at the Sunrun Virtual Special Meeting and Voting at the Sunrun Virtual Special Meeting

You or your authorized proxy may attend the Sunrun virtual special meeting if you were a registered or beneficial stockholder of Sunrun common stock as of the Sunrun record date.

To participate in the Sunrun virtual special meeting, visit http://virtualshareholdermeeting.com/Sunrun2020SM and enter the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. If you wish to submit a question during the Sunrun virtual special meeting, log into the virtual meeting platform at http://virtualshareholdermeeting.com/Sunrun2020SM, type your question into the “Ask a Question” field, and click “Submit.” We will respond to as many properly submitted questions during the relevant portion of the Sunrun virtual special meeting agenda as time allows.

If we experience technical difficulties during the Sunrun virtual special meeting (e.g., a temporary or prolonged power outage), we will determine whether the Sunrun virtual special meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the Sunrun virtual special meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any situation, we will promptly notify stockholders of the decision via http://virtualshareholdermeeting.com/Sunrun2020SM. We will have technicians

 

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ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting website log-in page at http://virtualshareholdermeeting.com/Sunrun2020SM.

You should register in advance to attend the Sunrun virtual special meeting. To do so, please make your request by mail to Office of the Corporate Secretary, 225 Bush Street, Suite 1400, San Francisco, California 94104, email at legalnotices@sunrun.com or by phone at (415) 580-6900. You are encouraged to timely make any such request such that Sunrun’s Corporate Secretary receives your request for an admission ticket on or before [●].

If you own shares in street name through an account with a bank, broker or other nominee, please send proof of your Sunrun share ownership as of the Sunrun record date (for example, a brokerage firm account statement or a “legal proxy” from your intermediary) along with your registration request. If you are not sure what proof to send, check with your intermediary.

If your shares are registered in your name with Sunrun’s stock registrar and transfer agent, AST, no proof of ownership is necessary because Sunrun can verify your ownership.

Revocability of Proxies

Any Sunrun stockholder of record giving a proxy has the power to revoke it. If you are a Sunrun stockholder of record, you may revoke your proxy in any of the following ways:

 

•

By delivering to Sunrun’s Corporate Secretary (at Sunrun’s executive offices at 225 Bush Street, Suite 1400, San Francisco, California 94104) a signed written notice of revocation bearing a later date than the proxy, stating that the proxy is revoked, which revocation is received prior to the proxy’s exercise at the Sunrun virtual special meeting;

 

•

By duly executing a subsequently dated proxy relating to the same shares of Sunrun common stock and delivering it to Sunrun’s Corporate Secretary at the address in the bullet point above, which subsequent proxy is received before the prior proxy is exercised at the Sunrun virtual special meeting;

 

•

By duly submitting a subsequently dated proxy relating to the same shares of Sunrun common stock by telephone or via the Internet (i.e., your most recent duly submitted voting instructions will be followed) before [●] on [●], 2020; or

 

•

By attending the Sunrun virtual special meeting and voting such shares during the Sunrun virtual special meeting as described above, although attendance at the Sunrun virtual special meeting will not, by itself, revoke a proxy.

If your shares are held by a bank, broker or other nominee, you may change your vote by submitting new voting instructions to your bank, broker or other nominee, or applicable plan administrator. You must contact your bank, broker or other nominee, or applicable plan administrator to find out how to do so.

Solicitation of Proxies; Expenses of Solicitation

The Sunrun Board is soliciting proxies for the Sunrun virtual special meeting from its stockholders. Sunrun will bear a portion of the cost of the solicitation of proxies, including preparation, assembly and delivery, as applicable, of this joint proxy statement/prospectus, the Sunrun proxy card and any additional materials furnished to Sunrun stockholders. Proxies may be solicited by directors, officers and a small number of Sunrun’s regular employees by mail, email, in person and by telephone, but such persons will not receive any additional compensation for these activities. Sunrun has retained MacKenzie, a proxy solicitation firm, to assist in the solicitation of proxies for a fee of approximately $15,000 plus reasonable out-of-pocket costs and expenses. As

 

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appropriate, copies of solicitation material will be furnished to brokerage houses, fiduciaries and custodians that hold shares of Sunrun common stock of record for beneficial owners for forwarding to such beneficial owners. Sunrun may also reimburse persons representing beneficial owners for their costs of forwarding the solicitation material to such owners.

Tabulation of Votes

Sunrun will appoint Broadridge to serve as the Inspector of Election for the Sunrun virtual special meeting. Broadridge will independently tabulate affirmative and negative votes and abstentions.

Adjournments

Subject to certain restrictions contained in the merger agreement, the Sunrun virtual special meeting may be adjourned to allow additional time for obtaining additional proxies. No notice of an adjourned meeting need be given if the time and place thereof are announced at the Sunrun virtual special meeting at which the adjournment was taken unless:

 

•

the adjournment is for more than 30 days, in which case a notice of the adjourned meeting will be given to each Sunrun stockholder of record entitled to vote at the Sunrun virtual special meeting; or

 

•

if, after the adjournment, a new record date for determination of Sunrun stockholders entitled to vote is fixed for the adjourned meeting, in which case the Sunrun Board will fix as the record date for determining Sunrun stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of Sunrun stockholders entitled to vote at the adjourned meeting, and will give notice of the adjourned meeting to each Sunrun stockholder of record as of such record date.

At any adjourned meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the Sunrun virtual special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the adjourned meeting.

Assistance and Additional Information

If you need assistance with submitting a proxy to vote your shares via the Internet, by telephone or by completing your Sunrun proxy card, or have questions regarding the Sunrun virtual special meeting, please contact MacKenzie, the proxy solicitor for Sunrun at (800) 322-2885 (toll-free for stockholders), (212) 929-5500 (collect for banks and brokers) or proxy@mackenziepartners.com.

Your vote is very important regardless of the number of shares of Sunrun common stock that you own and the matters to be considered at the Sunrun virtual special meeting are of great importance to the stockholders of Sunrun. Accordingly, you are urged to read and carefully consider the information contained in or incorporated by reference into this joint proxy statement/prospectus and promptly submit your proxy via the Internet or by telephone or complete, date, sign and promptly return the enclosed Sunrun proxy card or voting instruction form in the enclosed postage-paid envelope. If you submit your proxy via the Internet or by telephone, you do not need to return the enclosed Sunrun proxy card.

Please vote your shares via the Internet or by telephone, or sign, date and return a Sunrun proxy card or voting instruction form promptly to ensure that your shares can be represented, even if you otherwise plan to attend the Sunrun virtual special meeting.

 

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SUNRUN PROPOSALS

Sunrun Proposal 1: Approval of the Sunrun Share Issuance

As discussed elsewhere in this joint proxy statement/prospectus, Sunrun stockholders are considering and voting to approve the issuance of shares of Sunrun common stock in connection with the merger of Merger Sub with and into Vivint Solar as contemplated by the merger agreement. Sunrun stockholders should read carefully this joint proxy statement/prospectus in its entirety for more detailed information concerning the merger agreement and the merger. In particular, Sunrun stockholders are directed to the merger agreement which is attached as Annex A to this joint proxy statement/prospectus.

Pursuant to the merger agreement, approval of the Sunrun share issuance proposal is a condition to the consummation of the merger. If the Sunrun share issuance proposal is not approved, the merger will not be completed.

Approval of the Sunrun share issuance proposal requires that the number of votes cast for this proposal exceeds the sum of the number of votes cast against this proposal and the number of votes that abstain from voting on this proposal at the meeting, assuming a quorum is present.

The Sunrun Board recommends that you vote “FOR” the Sunrun share issuance proposal.

Sunrun Proposal 2: Adjournment of the Sunrun Virtual Special Meeting

The Sunrun virtual special meeting may be adjourned to another time and place to permit further solicitation of proxies, if necessary or appropriate, to obtain additional proxies if there are not sufficient votes to approve the Sunrun share issuance proposal.

Sunrun is asking you to authorize the holder of any proxy solicited by the Sunrun Board to vote in favor of any adjournment of the Sunrun virtual special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the Sunrun share issuance proposal. Sunrun does not intend to call a vote on the Sunrun adjournment proposal if the Sunrun share issuance proposal considered at the Sunrun virtual special meeting has been approved at the Sunrun virtual special meeting.

Approval of the Sunrun adjournment proposal requires that the number of votes cast for this proposal exceeds the sum of the number of votes cast against this proposal and the number of votes that abstain from voting on this proposal at the meeting, assuming a quorum is present. If the Sunrun virtual special meeting is adjourned for the purpose of soliciting additional proxies, Sunrun stockholders who have already submitted their proxies will be able to revoke them at any time prior to their use.

Sunrun does not intend to call a vote on the Sunrun adjournment proposal if the Sunrun share issuance proposal considered at the Sunrun virtual special meeting has been approved at the Sunrun virtual special meeting. The Sunrun adjournment proposal relates only to an adjournment of the Sunrun virtual special meeting for purposes of soliciting additional votes for approval of the Sunrun share issuance proposal. Sunrun retains full authority to the extent set forth in the Sunrun bylaws and Delaware law to adjourn the Sunrun virtual special meeting for any other purpose, or to postpone the Sunrun virtual special meeting before it is convened, without the consent of any Sunrun stockholder.

The Sunrun Board recommends that you vote “FOR” the Sunrun adjournment proposal.

 

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THE VIVINT SOLAR VIRTUAL SPECIAL MEETING

This joint proxy statement/prospectus is being provided to the Vivint Solar stockholders as part of a solicitation of proxies by the Vivint Solar Board for use at the Vivint Solar virtual special meeting to be held at the time and place specified below and at any properly convened meeting following an adjournment or postponement thereof. This joint proxy statement/prospectus provides Vivint Solar stockholders with information they need to know to be able to vote or instruct their vote to be cast at the Vivint Solar virtual special meeting.

Date, Time and Place of the Virtual Special Meeting

The Vivint Solar virtual special meeting will be held exclusively online via live audio-only webcast on [●], 2020 at [●] Mountain Time. The Vivint Solar virtual special meeting can be accessed by visiting [●], where you will be able to listen to the Vivint Solar virtual special meeting live, have an opportunity to submit questions, and vote online. We encourage you to allow ample time for online check-in, which will open at [●], Mountain Time. Please note that you will not be able to attend the special meeting in person. Vivint Solar intends to mail this joint proxy statement/prospectus and the enclosed form of proxy to its stockholders entitled to vote at the Vivint Solar virtual special meeting on or about [●], 2020.

Matters to be Considered

At the Vivint Solar virtual special meeting, Vivint Solar stockholders will be asked to consider and vote on the following:

 

1.

Adoption of the Merger Agreement. To vote on a proposal to adopt the merger agreement, which is further described in this joint proxy statement/prospectus, including in the section entitled “The Merger Agreement” beginning on page [●] of this joint proxy statement/prospectus, and a copy of the merger agreement is attached as Annex A to this joint proxy statement/prospectus;

 

2.

Vivint Solar Merger-Related Compensation. To vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid by Vivint Solar to certain of its named executive officers that is based on or otherwise relates to the merger contemplated by the merger agreement; and

 

3.

Adjournment of the Vivint Solar Virtual Special Meeting. To vote on a proposal to approve the adjournment of the Vivint Solar virtual special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Vivint Solar virtual special meeting to approve the Vivint Solar merger proposal.

Completion of the merger is conditioned on the approval of the Vivint Solar merger proposal.

Recommendation of the Vivint Solar Board

On July 6, 2020, the Vivint Solar Board unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, including the merger, and determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Vivint Solar and its stockholders. Accordingly, the Vivint Solar Board unanimously recommends that Vivint Solar stockholders vote “FOR” the Vivint Solar merger proposal, “FOR” the Vivint Solar merger-related compensation proposal and “FOR” the Vivint Solar adjournment proposal.

Vivint Solar stockholders should carefully read this joint proxy statement/prospectus, including any documents incorporated by reference, and the annexes in their entirety for more detailed information concerning the merger and the other transactions contemplated by the merger agreement.

 

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Vivint Solar Record Date; Vivint Solar Stockholders Entitled to Vote

Only holders of record of Vivint Solar common stock at the close of business on [●], 2020 will be entitled to notice of, and to vote at, the Vivint Solar virtual special meeting or any adjournments or postponements thereof.

As of the close of business on the Vivint Solar record date, there were [●] shares of Vivint Solar common stock outstanding and entitled to vote at the Vivint Solar virtual special meeting. Each share of Vivint Solar common stock outstanding on the Vivint Solar record date entitles the holder thereof to one vote on each proposal to be considered at the Vivint Solar virtual special meeting.

Your vote is important. We expect that many Vivint Solar stockholders will not attend the Vivint Solar virtual special meeting, and instead will be represented by proxy. Most Vivint Solar stockholders have a choice of submitting a proxy to vote their shares via the Internet, by using a toll-free telephone number, or by returning a completed Vivint Solar proxy card or voting instruction form. Please check your notice, proxy card or the information forwarded by your broker, bank or other holder of record to see which options are available to you. These Internet and telephone procedures have been designed to authenticate Vivint Solar stockholders, to allow you to vote your shares, and to confirm that your instructions have been properly recorded. The Internet and telephone facilities for Vivint Solar stockholders of record to submit their proxies will close at [●] on [●], 2020. If your shares are held through a broker, bank or other holder of record and Internet or telephone facilities are made available to you, these facilities may close sooner than those for Vivint Solar stockholders of record.

You can revoke your proxy at any time before it is exercised by delivering a properly executed, later-dated proxy (including a proxy submitted by Internet or telephone), by delivering a written revocation before the Vivint Solar virtual special meeting or by voting at the Vivint Solar virtual special meeting. Executing your proxy in advance will not limit your right to vote at the Vivint Solar virtual special meeting if you decide to attend the Vivint Solar virtual special meeting. However, if your shares are held in the name of a broker, bank or other holder of record, you cannot vote at the Vivint Solar virtual special meeting unless you have a legal proxy, executed in your favor, from the holder of record.

All shares entitled to vote and represented by properly executed proxies received prior to the Vivint Solar virtual special meeting and not revoked will be voted at the Vivint Solar virtual special meeting in accordance with your instructions. If you sign and return your proxy but do not indicate how your shares should be voted on a proposal, the shares represented by your proxy will be voted as the Vivint Solar Board recommends for such proposal.

Subject to health concerns relating to COVID-19 which may require Vivint Solar to implement alternative procedures to protect the health and welfare of Vivint Solar’s employees and stockholders, a complete list of Vivint Solar stockholders entitled to vote at the Vivint Solar virtual special meeting will be available for examination by any Vivint Solar stockholder at Vivint Solar’s principal executive offices located at 1800 West Ashton Boulevard, Lehi, Utah 84043, for purposes pertaining to the Vivint Solar virtual special meeting, during ordinary business hours for a period of ten days before the Vivint Solar virtual special meeting. If you would like to examine the stockholder list, please contact Vivint Solar’s Investor Relations department at 855-842-1844 or ir@vivintsolar.com to schedule an appointment or make alternate arrangements. A complete list of Vivint Solar stockholders entitled to vote at the Vivint Solar virtual special meeting will also be available for inspection during the Vivint Solar virtual special meeting at [●] by logging in with your 15-digit control number.

Voting by Vivint Solar’s Directors and Executive Officers

As of the close of business on the Vivint Solar record date, directors and executive officers of Vivint Solar and their affiliates owned and were entitled to vote [●] shares of Vivint Solar common stock or approximately [●]% of the shares of Vivint Solar common stock outstanding on that date. It is currently expected that Vivint Solar’s directors and executive officers will vote their shares of Vivint Solar common stock in favor of each of

 

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the proposals to be considered at the Vivint Solar virtual special meeting, although none of such directors or executive officers have entered into an agreement obligating them to do so. For information with respect to Vivint Solar common stock owned by directors and executive officers of Vivint Solar, please see Vivint Solar’s definitive proxy statement on Schedule 14A, filed with the SEC on April 24, 2020 and incorporated by reference into this joint proxy statement/prospectus.

The number of shares reflected above does not include shares underlying outstanding Vivint Solar stock options, Vivint Solar PSU awards, Vivint Solar RSU awards or Vivint Solar LTIP Awards. For information with respect to Vivint Solar stock options and Vivint Solar RSU awards, please see the section entitled “The Merger Agreement—Treatment of Vivint Solar Equity Awards” beginning on page [●] of this joint proxy statement/prospectus.

Quorum

The presence at the Vivint Solar virtual special meeting, virtually or represented by proxy, of the holders of a majority of the voting power of the stock issued and outstanding and entitled to vote thereat as of the Vivint Solar record date, will constitute a quorum for the transaction of business at the Vivint Solar virtual special meeting.

Abstentions will count for the purpose of determining the presence of a quorum for the transaction of business at the Vivint Solar virtual special meeting.

Required Vote

The required votes to approve the Vivint Solar proposals are as follows:

 

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The Vivint Solar merger proposal requires the affirmative vote of the holders of a majority of the shares of Vivint Solar common stock outstanding as of the close of business on the Vivint Solar record date and entitled to vote on the Vivint Solar merger proposal. The required vote of Vivint Solar stockholders on the Vivint Solar merger proposal is based upon the number of outstanding shares of Vivint Solar common stock entitled to vote thereon and not the number of shares that are actually voted. Brokers, banks and other nominees do not have discretionary authority to vote on this proposal.

 

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The Vivint Solar merger-related compensation proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of Vivint Solar common stock, present or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the Vivint Solar merger-related compensation proposal. The required vote of holders of Vivint Solar common stock to approve the Vivint Solar merger-related compensation proposal is based on the number of shares that are present virtually or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the proposal, not on the number of outstanding shares of Vivint Solar common stock. Brokers, banks and other nominees do not have discretionary authority to vote on this proposal. Because the vote on the Vivint Solar merger-related compensation proposal is advisory only, it will not be binding on either Vivint Solar or Sunrun. Accordingly, if the Vivint Solar merger proposal is approved and the merger is completed, the Vivint Solar merger-related compensation will be payable to Vivint Solar’s named executive officers, subject only to the conditions applicable thereto, regardless of the outcome of the approval of the Vivint Solar merger-related compensation proposal.

 

•

The Vivint Solar adjournment proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of Vivint Solar common stock, present or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the Vivint Solar adjournment proposal. The required vote of holders of Vivint Solar common stock to approve the Vivint Solar adjournment proposal is based on the number of shares that are present virtually or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the proposal, not on the number of outstanding shares of Vivint Solar common stock. Brokers, banks and other nominees do not have discretionary authority to vote on this proposal.

 

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Voting by Holders of Record

If you were the record holder of your shares of Vivint Solar common stock as of the Vivint Solar record date, you may vote your shares of Vivint Solar common stock at the Vivint Solar virtual special meeting via the virtual meeting website. Any Vivint Solar stockholder can attend the Vivint Solar virtual special meeting by visiting [●], where stockholders may vote and submit questions during the Vivint Solar virtual special meeting. Additionally, you may submit your proxy authorizing the voting of your shares of Vivint Solar common stock at the Vivint Solar virtual special meeting by mail, by telephone or via the Internet.

Voting via Proxies Submitted by the Internet or by Telephone

 

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To submit your proxy via the Internet, go to http://www.envisionreports.com/VSLR. Have your Vivint Solar proxy card in hand when you access the website and follow the instructions to vote your shares.

 

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To submit your proxy by telephone, call 1-800-652-VOTE. Have your Vivint Solar proxy card in hand when you call and then follow the instructions to vote your shares.

 

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If you submit a proxy to vote your shares via the Internet or by telephone, you must do so no later than [●] on [●], 2020.

Voting via Proxies Submitted by Mail

As an alternative to submitting your proxy via the Internet or by telephone, you may submit your proxy by mail.

 

•

To submit your proxy by mail, simply mark your Vivint Solar proxy card, date and sign it and return it in the postage-paid envelope. If you do not have the postage-paid envelope, please mail your completed Vivint Solar proxy card to the following address:

Computershare

Vivint Solar, Inc. Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

 

•

If you submit a proxy to vote your shares by mail, your Vivint Solar proxy card must be received no later than [●] on [●], 2020.

Treatment of Abstentions; Failure to Vote

For purposes of the Vivint Solar virtual special meeting, an abstention occurs when a Vivint Solar stockholder attends the Vivint Solar virtual special meeting and does not vote or returns a proxy with an “abstain” instruction.

 

•

For the Vivint Solar merger proposal, if a Vivint Solar stockholder present at the Vivint Solar virtual special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have the effect of a vote cast “AGAINST” such proposal. If a Vivint Solar stockholder is not present at the Vivint Solar virtual special meeting and does not respond by proxy, it will have the effect of a vote cast “AGAINST” such proposal.

 

•

For the Vivint Solar merger-related compensation proposal, if a Vivint Solar stockholder present at the Vivint Solar virtual special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have the same effect as a vote cast “AGAINST” such proposal. If a Vivint Solar stockholder is not present at the Vivint Solar virtual special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal (assuming a quorum is present).

 

•

For the Vivint Solar adjournment proposal, if a Vivint Solar stockholder present at the Vivint Solar virtual special meeting abstains from voting, or responds by proxy with an “abstain” vote, it will have

 

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the same effect as a vote cast “AGAINST” such proposal. If a Vivint Solar stockholder is not present at the Vivint Solar virtual special meeting and does not respond by proxy, it will have no effect on the vote count for such proposal. Vivint Solar does not intend to call a vote on the Vivint Solar adjournment proposal if the Vivint Solar merger proposal has been approved at the Vivint Solar virtual special meeting.

Shares Held in Street Name / Broker Non-Votes

If your shares of Vivint Solar common stock are held in an account at a bank, broker or other nominee holder of record (i.e., in “street name”), you must provide the record holder of your shares with instructions on how to vote the shares. Please follow the voting instructions provided by the bank, broker or other nominee. You may not vote shares held in street name by returning a Vivint Solar proxy card directly to Vivint Solar or by voting virtually at the Vivint Solar virtual special meeting unless you provide a “legal proxy”, which you must obtain from your bank, broker or other nominee. Further, banks, brokers or other nominees who hold shares of Vivint Solar common stock on behalf of their customers may not give a proxy to Vivint Solar to vote those shares with respect to the Vivint Solar merger proposal, the Vivint Solar merger-related compensation proposal and the Vivint Solar adjournment proposal without specific instructions from their customers, as banks, brokers and other nominees do not have discretionary voting power on these “non-routine” matters. Under the current rules of NYSE, each of the proposals to be considered at the Vivint Solar virtual special meeting as described in this joint proxy statement/prospectus are considered non-routine. Therefore banks, brokers and other nominee holders of record do not have discretionary authority to vote on any of the proposals to be considered at the Vivint Solar virtual special meeting. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power. If a beneficial owner of shares of Vivint Solar common stock held in street name does not give voting instructions to the broker, bank or other nominee, then those shares will not be present or represented by proxy at the Vivint Solar virtual special meeting. As a result, broker non-votes would not have any effect on the outcome of the Vivint Solar merger-related compensation proposal or the Vivint Solar adjournment proposal, but would have the same effect as a vote “AGAINST” the Vivint Solar merger proposal.

Attendance at the Vivint Solar Virtual Special Meeting

You or your authorized proxy may attend the Vivint Solar virtual special meeting if you were a registered or beneficial stockholder of Vivint Solar common stock as of the Vivint Solar record date.

To participate in the Vivint Solar virtual special meeting, visit [●] and enter the 15-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. The password for the meeting is VSLR2020. If you wish to submit a question during the Vivint Solar virtual special meeting, log into the virtual meeting platform at [●], click the message icon at the top of the screen, and submit your question. We will respond to as many properly submitted questions during the relevant portion of the Vivint Solar virtual special meeting agenda as time allows.

If we experience technical difficulties during the Vivint Solar virtual special meeting (e.g., a temporary or prolonged power outage), we will determine whether the Vivint Solar virtual special meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the Vivint Solar virtual special meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any situation, we will promptly notify stockholders of the decision via [●].

If you are a registered stockholder (that is, you hold your shares through Vivint Solar’s transfer agent, Computershare), you do not need to register to attend the Vivint Solar virtual special meeting virtually on the Internet. Please follow the instructions on the notice or proxy card that you received. No proof of ownership is necessary because Vivint Solar can verify your ownership.

 

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If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Vivint Solar virtual special meeting virtually on the Internet. To register to attend the Vivint Solar virtual special meeting online by webcast, you must submit proof of your proxy power (legal proxy) reflecting your Vivint Solar holdings, along with your name and email address, to Computershare by email to legalproxy@computershare.com or mail to Computershare, Vivint Solar, Inc. Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001. Requests for registration must be labeled as “Legal Proxy” and be received no later than [●], Eastern Time, on [●], 2020.

Revocability of Proxies

Any Vivint Solar stockholder of record giving a proxy has the power to revoke it. If you are a Vivint Solar stockholder of record, you may revoke your proxy in any of the following ways:

 

•

By delivering to Vivint Solar’s Secretary (at Vivint Solar’s principal executive offices located at 1800 West Ashton Boulevard, Lehi, Utah 84043) a signed written notice of revocation bearing a later date than the proxy, stating that the proxy is revoked, which revocation is received prior to the proxy’s exercise at the Vivint Solar virtual special meeting;

 

•

By duly executing a subsequently dated proxy relating to the same shares of Vivint Solar common stock and returning it in the postage-paid envelope provided, which subsequent proxy is received before the prior proxy is exercised at the Vivint Solar virtual special meeting;

 

•

By duly submitting a subsequently dated proxy vote relating to the same shares of Vivint Solar common stock by telephone or via the Internet (using the original instructions provided to you) before [●] on [●], 2020; or

 

•

By attending the Vivint Solar virtual special meeting and voting such shares during the Vivint Solar virtual special meeting as described above, although attendance at the Vivint Solar virtual special meeting will not, by itself, revoke a proxy.

If your shares are held by a bank, broker or other nominee, you may change your vote by submitting new voting instructions to your bank, broker or other nominee. You must contact your bank, broker or other nominee to find out how to do so.

Solicitation of Proxies; Expenses of Solicitation

The Vivint Solar Board is soliciting proxies for the Vivint Solar virtual special meeting from its stockholders. Vivint Solar will bear a portion of the cost of the solicitation of proxies, including preparation, assembly and delivery, as applicable, of this joint proxy statement/prospectus, the Vivint Solar proxy card and any additional materials furnished to Vivint Solar stockholders. Proxies may be solicited by directors, officers and a small number of Vivint Solar’s regular employees in person or by mail, email, or telephone, but such persons will not receive any additional compensation for these activities. Vivint Solar has retained Innisfree M&A Incorporated, a proxy solicitation firm, to assist in the solicitation of proxies for a fee of approximately $20,000 plus certain additional per-service fees and reasonable out-of-pocket costs and expenses. As appropriate, copies of solicitation material will be furnished to brokerage houses, fiduciaries and custodians that hold shares of Vivint Solar common stock of record for beneficial owners for forwarding to such beneficial owners. Vivint Solar may also reimburse persons representing beneficial owners for their costs of forwarding the solicitation material to such owners.

Tabulation of Votes

Vivint Solar will appoint Computershare, to serve as the Inspector of Election for the Vivint Solar virtual special meeting. Computershare will independently tabulate affirmative and negative votes and abstentions.

 

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Adjournments

Subject to certain restrictions contained in the merger agreement, the Vivint Solar virtual special meeting may be adjourned to allow additional time for obtaining additional proxies. No notice of an adjourned meeting need be given if the time and place thereof are announced at the Vivint Solar virtual special meeting at which the adjournment was taken unless:

 

•

the adjournment is for more than 30 days, in which case a notice of the adjourned meeting will be given to each Vivint Solar stockholder of record entitled to vote at the Vivint Solar virtual special meeting; or

 

•

if, after the adjournment, a new record date for determination of Vivint Solar stockholders entitled to vote is fixed for the adjourned meeting, in which case the Vivint Solar Board will fix as the record date for determining Vivint Solar stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of Vivint Solar stockholders entitled to vote at the adjourned meeting, and will give notice of the adjourned meeting to each Vivint Solar stockholder of record as of such record date.

At any adjourned meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the Vivint Solar virtual special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the adjourned meeting.

Assistance and Additional Information

If you need assistance with submitting a proxy to vote your shares via the Internet, by telephone or by completing your Vivint Solar proxy card, or have questions regarding the Vivint Solar virtual special meeting, please contact Innisfree M&A Incorporated, the proxy solicitor for Vivint Solar at (877) 800-5187 (toll-free for stockholders) or (212) 750-5833 (collect for banks and brokers).

Your vote is very important regardless of the number of shares of Vivint Solar common stock that you own and the matters to be considered at the Vivint Solar virtual special meeting are of great importance to the stockholders of Vivint Solar. Accordingly, you are urged to read and carefully consider the information contained in or incorporated by reference into this joint proxy statement/prospectus and promptly submit your proxy via the Internet or by telephone or, if applicable, complete, date, sign and promptly return the enclosed Vivint Solar proxy card or voting instruction form in the enclosed postage-paid envelope. If you submit your proxy via the Internet or by telephone, you do not need to return the enclosed Vivint Solar proxy card.

Please vote your shares via the Internet or by telephone, or sign, date and return a Vivint Solar proxy card or voting instruction form promptly to ensure that your shares can be represented, even if you otherwise plan to attend the Vivint Solar virtual special meeting.

 

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VIVINT SOLAR PROPOSALS

Vivint Solar Proposal 1: Adoption of the Merger Agreement

Vivint Solar stockholders are asked to consider and vote on the Vivint Solar merger proposal as contemplated by the merger agreement. For a summary and detailed information regarding the Vivint Solar merger proposal, see the information about the merger and the merger agreement throughout this joint proxy statement/prospectus, including the information set forth in sections entitled “The Merger” and “The Merger Agreement”. A copy of the merger agreement is attached as Annex A to this joint proxy statement/ prospectus.

Pursuant to the merger agreement, approval of the Vivint Solar merger proposal is a condition to the consummation of the merger. If the Vivint Solar merger proposal is not approved, the merger will not be completed.

Approval of the Vivint Solar merger proposal requires the affirmative vote of the holders of a majority of the shares of Vivint Solar common stock outstanding as of the close of business on the Vivint Solar record date and entitled to vote on the Vivint Solar merger proposal.

Recommendation of the Vivint Solar Board

The Vivint Solar Board unanimously recommends that Vivint Solar stockholders vote “FOR” the Vivint Solar merger proposal.

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Vivint Solar Proposal 2: Vivint Solar Merger-Related Compensation

In accordance with Section 14A of the Exchange Act, Vivint Solar is providing its stockholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of certain of Vivint Solar’s named executive officers that is based on or otherwise relates to the merger disclosed in “The Merger—Interests of Vivint Solar’s Directors and Executive Officers in the Merger”. The non-binding advisory vote gives Vivint Solar stockholders the opportunity to express their views on the compensation of certain of Vivint Solar’s named executive officers related to the merger. Accordingly, Vivint Solar is requesting its stockholders to approve the following resolution, on a non-binding advisory basis:

“RESOLVED, that the compensation that may be paid or become payable to certain of Vivint Solar’s named executive officers that is based on or otherwise relates to the merger as disclosed pursuant to Item 402(t) of Regulation S-K in the section entitled “The Merger—Interests of Vivint Solar’s Directors and Executive Officers in the Merger—Quantification of Potential Payments and Benefits to Vivint Solar’s Named Executive Officers in Connection with the Merger” in the joint proxy statement/prospectus for the special meeting is hereby APPROVED.”

Approval of the Vivint merger-related compensation proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of Vivint Solar common stock, present or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the Vivint Solar merger-related compensation proposal.

The vote on the Vivint Solar merger-related compensation proposal is a vote separate and apart from the vote to approve the Vivint Solar merger proposal. Accordingly, you may vote in favor of the approval of the Vivint Solar merger proposal and against the Vivint Solar merger-related compensation proposal, or vice versa. Approval of the Vivint Solar merger-related compensation proposal, on a non-binding advisory basis, is not a condition to the consummation of the transactions contemplated by the merger agreement, and it is advisory in nature only, meaning it will not be binding on Vivint Solar or Sunrun. Because there is a contractual obligation to

 

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pay the compensation, if the transactions contemplated by the merger agreement are completed, the compensation may be paid or become payable to certain of Vivint Solar’s named executive officers, subject only to the conditions applicable to such compensation payments, regardless of the outcome of the advisory vote on the Vivint Solar merger-related compensation proposal.

Recommendation of the Vivint Solar Board

The Vivint Solar Board unanimously recommends that Vivint Solar stockholders vote “FOR” the Vivint Solar merger-related compensation proposal.

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Vivint Solar Proposal 3: Adjournment of the Vivint Solar virtual special meeting

The Vivint Solar virtual special meeting may be adjourned to another time and place to permit further solicitation of proxies, if necessary or appropriate, to obtain additional proxies if there are not sufficient votes to approve the Vivint Solar merger proposal.

The Vivint Solar stockholders are being asked to consider and vote on the authorization of the holder of any proxy solicited by the Vivint Solar Board to vote in favor of granting discretionary authority to proxy holders, and each of them individually, to adjourn the Vivint Solar virtual special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Vivint Solar virtual special meeting to approve the Vivint Solar merger proposal. Vivint Solar does not intend to call a vote on the Vivint Solar adjournment proposal if the Vivint Solar merger proposal considered at the Vivint Solar virtual special meeting has been approved at the Vivint Solar virtual special meeting.

Approval of the Vivint Solar adjournment proposal requires the affirmative vote of holders of a majority of the voting power of the shares of Vivint Solar common stock, present or represented by proxy at the Vivint Solar virtual special meeting and entitled to vote on the Vivint Solar adjournment proposal. If the Vivint Solar virtual special meeting is adjourned for the purpose of soliciting additional proxies, Vivint Solar stockholders who have already submitted their proxies will be able to revoke them at any time prior to their use.

The Vivint Solar adjournment proposal relates only to an adjournment of the Vivint Solar virtual special meeting for purposes of soliciting additional votes for approval of the Vivint Solar merger proposal. Vivint Solar retains full authority to the extent set forth in the Vivint Solar bylaws and Delaware law to adjourn the Vivint Solar virtual special meeting for any other purpose, or to postpone the Vivint Solar virtual special meeting before it is convened, without the consent of any Vivint Solar stockholder.

Recommendation of the Vivint Solar Board

The Vivint Solar Board unanimously recommends that Vivint Solar stockholders vote “FOR” the Vivint Solar adjournment proposal.

 

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THE PARTIES TO THE MERGER

Sunrun Inc.

Sunrun is one of the nation’s leading home solar, battery storage, and energy services companies. Sunrun’s mission is to provide our customers with clean, affordable solar energy and storage, and a best-in-class customer experience. Founded in 2007, Sunrun pioneered the residential solar service model, creating a low-cost solution for customers seeking to lower their energy bills. By removing the high initial cost and complexity of cash system sales that used to define the residential solar industry, Sunrun fostered the residential solar industry’s rapid growth and generated enormous consumer value. Sunrun’s innovative home battery solution, Brightbox, brings families affordable, resilient, and reliable energy. Sunrun can also manage and share stored solar energy from the batteries to provide benefits to households, utilities, and the electric grid while reducing our reliance on polluting energy sources. Sunrun’s relentless drive to increase the accessibility and affordability of solar energy is fueled by Sunrun’s enduring vision: to create a planet run by the sun.

Sunrun’s principal executive offices are located at 225 Bush Street, Suite 1400, San Francisco, California 94104, and its telephone number is (415) 580-6900.

Sunrun’s common stock is publicly traded on Nasdaq under the ticker symbol “RUN”. Additional information about Sunrun is included in documents incorporated by reference in this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

Vivint Solar, Inc.

Vivint Solar is a leading full-service residential solar provider in the United States. Founded in 2011, Vivint Solar provides homeowners with simple and affordable clean energy. With the help of Vivint Solar, homeowners can power their homes with clean, renewable energy, typically achieving significant financial savings over time. Vivint Solar designs and installs solar energy systems for homeowners and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, homeowners may benefit from Vivint Solar’s affordable, flexible financing options, including power purchase agreements, or lease agreements, where available. Vivint Solar also offers solar plus storage systems with LG Chem home batteries and electric vehicle chargers with ChargePoint Home.

Vivint Solar’s principal executive offices are located at 1800 West Ashton Boulevard, Lehi, Utah 84043 and its telephone number is (877) 404-4129.

Vivint Solar’s common stock is publicly traded on NYSE under the ticker symbol “VSLR”. Additional information about Vivint Solar is included in documents incorporated by reference in this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

Viking Merger Sub, Inc.

Merger Sub, a direct wholly owned subsidiary of Sunrun, is a Delaware corporation incorporated on July 2, 2020 for the purpose of effecting the merger. Merger Sub has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement. The principal executive offices of Merger Sub are located at 225 Bush Street, Suite 1400, San Francisco, California 94104, and its telephone number is (415) 580-6900.

 

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THE MERGER

The following is a discussion of material aspects of the merger. The description of the merger agreement in this section and elsewhere in this joint proxy statement/prospectus is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Annex A, and is incorporated by reference into this joint proxy statement/prospectus. This summary does not purport to be complete and may not contain all of the information about the merger that is important to you. You are encouraged to read the merger agreement carefully and in its entirety. This section is not intended to provide you with any factual information about Sunrun or Vivint Solar. Such information can be found elsewhere in this joint proxy statement/prospectus and in the public filings Sunrun and Vivint Solar make with the SEC that are incorporated by reference into this joint proxy statement/prospectus, as described in the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

Effect of the Merger

The merger agreement provides that, upon the terms and subject to the conditions set forth in the merger agreement, and in accordance with the DGCL, at the completion of the merger, Merger Sub will be merged with and into Vivint Solar. As a result of the merger, the separate corporate existence of Merger Sub will cease, and Vivint Solar will continue as the surviving corporation and a wholly owned subsidiary of Sunrun.

At the completion of the merger, the Vivint Solar certificate of incorporation and the Vivint Solar bylaws will be amended and restated in their entirety to be in the form of the certificate of incorporation as set forth in Exhibit A of the merger agreement and the bylaws as set forth in Exhibit B of the merger agreement.

Merger Consideration

At the completion of the merger, upon the terms and subject to the conditions set forth in the merger agreement, each share of Vivint Solar common stock issued and outstanding immediately prior to the effective time (other than shares of Vivint Solar common stock owned by Sunrun, Merger Sub, any other wholly owned subsidiary of Sunrun or Vivint Solar immediately prior to the effective time, including shares of Vivint Solar common stock held in treasury by Vivint Solar, and in each case not held on behalf of third parties, which are collectively referred to as the excluded shares) will be converted automatically into the right to receive the merger consideration, which is:

 

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0.55 fully paid and nonassessable shares of Sunrun common stock; plus

 

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if applicable, cash in lieu of fractional shares of Sunrun common stock;

 

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less any applicable withholding taxes.

The 0.55 shares of Sunrun common stock into which each share of Vivint Solar common stock issued and outstanding immediately prior to the effective time, except for the excluded shares, will be converted is referred to as the exchange ratio.

The exchange ratio is fixed, which means that it will not change between now and the date of the completion of the merger, regardless of whether the market price of either Vivint Solar common stock or Sunrun common stock changes. Therefore, the value of the merger consideration will depend on the market price of Sunrun common stock at the completion of the merger.

The market price of Sunrun common stock has fluctuated since the date of the announcement of the merger and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the virtual special meetings, the date the merger is completed and thereafter. The market value of the Sunrun common stock to be issued in exchange for Vivint Solar common stock upon the completion of the merger will not be known at

 

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the time of the Vivint Solar virtual special meeting or the Sunrun virtual special meeting. Therefore, current and historical market prices of Sunrun common stock are not reflective of the value that Vivint Solar stockholders will receive in the merger, and the current stock price quotations for Vivint Solar common stock and Sunrun common stock may not provide meaningful information to Sunrun stockholders in determining whether to approve the Sunrun share issuance proposal or to Vivint Solar stockholders in determining whether to approve the Vivint Solar merger proposal. Sunrun’s common stock is traded on Nasdaq under the symbol “RUN”, and Vivint Solar’s common stock is traded on NYSE under the symbol “VSLR”. Sunrun stockholders and Vivint Solar stockholders are encouraged to review carefully the other information contained in this joint proxy statement/prospectus or incorporated by reference in this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page [●] of this joint proxy statement/prospectus.

No fractional share of Sunrun common stock will be issued upon the conversion or surrender for exchange of certificates or book-entry shares, and such fractional share interests will not entitle the owner thereof to any Sunrun common stock or to vote or to any other rights of a holder of Sunrun common stock. Each holder of shares of Vivint Solar common stock converted pursuant to the merger who would otherwise have been entitled to receive a fraction of a share of Sunrun common stock (after aggregating all certificates and book-entry shares delivered by such holder) will receive, in lieu thereof, cash (rounded to the nearest cent), without interest, in an amount equal to such fractional amount a holder is entitled to receive multiplied by the dollar volume-weighted average price, rounded to four decimal points, of Sunrun common stock on Nasdaq during the period beginning at 9:30:01 am, New York time, and ending at 4:00:00 p.m., New York time (as reported by Bloomberg through its “HP” function (set to weighted average)) for the ten consecutive trading days prior to the date that is two business days prior to the completion of the merger. The payment of cash in lieu of fractional share interests pursuant to the terms and conditions set forth in the merger agreement is not separately bargained-for consideration.

In accordance with Section 262 of the DGCL, no appraisal rights will be available to holders of Vivint Solar common stock or Sunrun common stock in connection with the merger. Sunrun stockholders will continue to own their existing shares of Sunrun common stock, which will not be adjusted or otherwise changed by the merger.

Background of the Merger

Each of Sunrun’s and Vivint Solar’s management and respective board of directors, together with their legal and financial advisors, periodically review and assess various strategies, opportunities and alternatives that may enhance stockholder value. Such reviews and assessments have included, among other things, remaining as a stand-alone entity in light of the then-current business, economic and regulatory environments and entering into acquisitions, dispositions and strategic partnerships with other companies to further the respective company’s strategic objectives.

On July 20, 2015, Vivint Solar executed a definitive agreement (the “Original SunEdison Merger Agreement”) with SunEdison Inc. (“SunEdison”), pursuant to which a wholly owned subsidiary of SunEdison would have merged with and into Vivint Solar (the “SunEdison Merger”), with Vivint Solar continuing as a subsidiary of SunEdison. Pursuant to the SunEdison Merger Agreement, Vivint Solar stockholders were to receive consideration valued at $16.50 per share, consisting of $9.89 per share in cash, $3.31 per share in SunEdison stock and $3.30 per share in SunEdison convertible notes. The Original SunEdison Merger Agreement was subsequently amended on December 9, 2015 (so amended, the “SunEdison Merger Agreement”), pursuant to which Vivint Solar stockholders other than 313 Acquisition would have received cash consideration of approximately $9.97 per share as of the close of business on January 22, 2016 (the business day prior to the date of the proxy statement filed in respect of the SunEdison Merger), and 313 Acquisition, an affiliate of Blackstone which owned 77.3% of Vivint Solar’s shares of common stock as of such date, would have received consideration consisting of cash, convertible notes and common stock of SunEdison that also would have

 

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represented approximately $9.97 per share as of such date. On March 7, 2016, Vivint Solar terminated the SunEdison Merger Agreement for SunEdison’s failure to satisfy its obligations under the SunEdison Merger Agreement. On April 21, 2016, SunEdison filed for Chapter 11 bankruptcy.

Following the termination of the SunEdison Merger Agreement, Vivint Solar’s management and the Vivint Solar Board, together with their legal and financial advisors, continued to periodically review and assess various strategies, opportunities and alternatives that may enhance stockholder value, which reviews and assessments have included meeting with members of the management, board and advisors of other solar companies to discuss industry developments and possible opportunities for transactions.

As part of each company’s regular review and assessment of strategic opportunities, on occasion between December 2016 and mid-2018, Vivint Solar’s management and board and members of Sunrun’s management and board had discussions about potential strategic opportunities. Vivint Solar and Sunrun representatives recognized the potential strategic benefits of a combination between Vivint Solar and Sunrun, but the discussions were high-level with no specific terms discussed.

In mid-2018, a member of Vivint Solar management received a call from a member of management of a strategic party (“Party A”), who expressed interest in exploring potential strategic transactions with Vivint Solar. Vivint Solar and Party A already had a confidentiality agreement in place from past discussions regarding a potential business relationship. This confidentiality agreement did not restrict Party A from making unsolicited proposals to Vivint Solar or contain other standstill restrictions. Over the next few months, members of Vivint Solar management and members of Party A management engaged in preliminary discussions with respect to potential strategic transactions. These discussions were high-level and no specific terms were discussed.

In September 2018, David Bywater, Vivint Solar’s chief executive officer, received a call from a representative of a strategic party (“Party B”), who expressed interest in exploring potential strategic transactions with Vivint Solar. To facilitate additional discussions, Vivint Solar executed a confidentiality agreement with Party B and thereafter provided certain financial and other information to Party B. This confidentiality agreement did not restrict Party B from making unsolicited proposals to Vivint Solar or contain other standstill restrictions. Over the next few months, members of Vivint Solar management and members of Party B management engaged in preliminary discussions with respect to various potential transactions or other business opportunities between the two companies. At the regularly scheduled meeting of the Vivint Solar Board on September 19, 2018, Mr. Bywater advised the board in executive session of the status of discussions with Party B. While the discussions between Vivint Solar and Party B initially explored potential strategic transactions, the conversation shifted to commercial opportunities, and the parties ultimately entered into a commercial agreement. In between the regular meetings of the Vivint Solar Board on September 19, 2018 and January 17, 2019, members of the Vivint Solar Board discussed seeking views from investment banks as to potential strategic opportunities, including, among other opportunities, investments, partnerships and potential strategic transactions. Thereafter, members of Vivint Solar management met with four investment banks to discuss potential strategic opportunities. Morgan Stanley and BofA Securities were among the investment banks contacted. Vivint Solar has had a long-standing relationship with each of Morgan Stanley and BofA Securities. Morgan Stanley was engaged by Vivint Solar in connection with the SunEdison Merger, and BofA Securities, among other things, has led and participated in numerous financings for Vivint Solar, each as discussed in further detail in the section entitled “—Opinions of Vivint Solar’s Financial Advisors” beginning on page [●] of this joint proxy statement/prospectus.

On January 17, 2019, the Vivint Solar Board held a regularly scheduled meeting with members of Vivint Solar’s management in attendance. The board discussed in executive session potential strategic opportunities, including the views that had been provided by the investment banks. Following discussion, the Vivint Solar Board did not determine to take any additional steps with respect to potential strategic opportunities at that time.

During the spring of 2019, a representative of a private equity firm (“Party C”) called Peter Wallace, the chairperson of the Vivint Solar Board and a manager of 313 Acquisition, expressing Party C’s interest in

 

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exploring an acquisition of Vivint Solar. The representative of Party C indicated that Party C was considering a price in the range of $6.50-$7.00 per share of Vivint Solar common stock. Mr. Wallace told the representatives of Party C that any offer would need to be reviewed by the Vivint Solar Board. Mr. Wallace informed other members of the Vivint Solar Board and members of Vivint Solar management of this conversation. In order to determine if Party C would be interested in pursuing a transaction, Vivint Solar executed a confidentiality agreement with Party C on May 9, 2019 and thereafter provided certain financial and other information to Party C. Between March 20, 2019 and May 9, 2019, the closing prices of Vivint Solar’s common stock ranged from $4.78 to $7.24. This confidentiality agreement did not restrict Party C from making unsolicited proposals to Vivint Solar or contain other standstill restrictions. During June 2019, the Vivint Solar stock price traded above the high end of the $6.50-$7.00 range previously expressed by the representative of Party C. The Party C representative called Mr. Wallace and asked if the Vivint Solar Board would be interested in selling the company at a discount to the market price. Mr. Wallace indicated that he did not think the Vivint Solar Board would be interested in such a transaction and that 313 Acquisition, as the majority stockholder of Vivint Solar, would not support such a transaction. The Party C representative subsequently asked Mr. Wallace if 313 Acquisition would be willing to entertain an offer to sell its majority stake in Vivint Solar to Party C at a discount to market, with the other Vivint Solar stockholders having the ability to participate through a tender offer made at the same price. Mr. Wallace subsequently informed the Party C representative that 313 Acquisition was not interested in such a transaction. Mr. Wallace subsequently informed the members of the Vivint Solar Board of his discussions with the Party C representative.

During the spring of 2019, a member of Vivint Solar management received a call from a representative of an investment bank regarding the possibility of a potential strategic transaction with a strategic party (“Party D”). Following an initial meeting between a member of Vivint Solar management and a member of Party D management, to facilitate additional discussions, Vivint Solar executed a confidentiality agreement with Party D on June 28, 2019 and thereafter provided certain financial and other information to Party D. This confidentiality agreement did not restrict Party D from making unsolicited proposals to Vivint Solar or contain other standstill restrictions. On July 15, 2019, three members of Vivint Solar’s management, including Mr. Bywater, met with members of Party D’s management to explore the possibility of a potential strategic transaction. Mr. Bywater had two subsequent calls with Party D’s chief executive officer during the second half of 2019. In these discussions, Party D’s chief executive officer reiterated Party D’s potential interest in a transaction but noted that Party D was not then prepared to explore a transaction at that time given other competing business priorities. These discussions were high-level and no specific terms were discussed and no offers were made at this time with respect to any strategic transaction between Vivint Solar and Party D.

Also during the spring of 2019, the investment bank that had contacted Vivint Solar with respect to Party D introduced members of Vivint Solar management to representatives of a private equity firm (“Party E”). To facilitate additional discussions, Vivint Solar executed a confidentiality agreement with Party E. This confidentiality agreement did not restrict Party E from making unsolicited proposals to Vivint Solar or contain other standstill restrictions. Members of Vivint Solar management shared certain financial and other information with Party E and had preliminary discussions with representatives of Party E. Following these discussions, a representative of Party E spoke with Mr. Wallace and proposed to acquire Vivint Solar at a substantial discount to the market price of Vivint Solar common stock. Mr. Wallace subsequently informed members of the Vivint Solar Board of such proposal, and there were no further discussions with Party E in light of the unattractive valuation proposed.

In June 2019, a member of Vivint Solar management called a representative of a strategic party (“Party F”) to explore potential strategic transactions between the two companies. Over the next several months, members of Vivint Solar management and members of Party F management engaged in preliminary discussions with respect to various potential transactions and other business opportunities. While the discussions initially explored potential strategic transactions, the conversation shifted to commercial opportunities, and the parties ultimately entered into commercial agreements.

 

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On June 27, 2019, the Vivint Solar Board held a regularly scheduled meeting with members of Vivint Solar’s management in attendance, which included a discussion in executive session of Vivint Solar’s strategic opportunities, including the recent interest from Party C, Party D and Party E discussed above. Mr. Wallace described his discussions with Party C and the Vivint Solar Board determined that it did not want to pursue a sale of the company at a discount to the market price. Mr. Bywater informed the Vivint Solar Board that several parties had recently contacted him on an unsolicited basis to express interest in exploring a potential strategic transaction with Vivint Solar, but that it was not clear how serious their interest was. The Vivint Solar Board discussed the possibility of commencing a formal process to explore a potential strategic transaction given the unsolicited indications of interest that Vivint Solar had received but also discussed that it was not yet clear whether there would be sufficient interest in the market to justify such a process. Accordingly, the Vivint Solar Board determined that members of the Vivint Solar Board should contact a few investment banks for their views. Following the meeting, Mr. Wallace informed Party C that the Vivint Solar Board did not intend to pursue further discussions with Party C at such time.

Following the June 27, 2019 meeting of the Vivint Solar Board, members of the Vivint Solar Board and Vivint Solar management discussed with representatives of Morgan Stanley, BofA Securities and another investment bank whether there might be third-party interest in a potential strategic transaction with Vivint Solar. The representatives of Morgan Stanley and BofA Securities each believed there could be interest in a potential strategic transaction with Vivint Solar.

During the second half of 2019, members of Vivint Solar’s management and the Vivint Solar Board conferred with Morgan Stanley and BofA Securities and discussed the possibility of commencing a process to explore a potential strategic transaction. Vivint Solar ultimately selected Morgan Stanley to act as its lead financial advisor and BofA Securities to act as an additional financial advisor in connection with a potential strategic transaction. Vivint Solar selected each of Morgan Stanley and BofA Securities based on its respective experience in transactions similar to the potential strategic transaction, qualifications, expertise and reputation and its knowledge of Vivint Solar and its business and the industries in which Vivint Solar conducts its business. During this time, members of Vivint Solar management, with the assistance of Vivint Solar’s advisors, prepared a “confidential information presentation” and assembled materials for an online data room in anticipation of a potential strategic transaction. Representatives of 313 Acquisition also participated in this process.

On November 6, 2019, consistent with the directive of the Sunrun Board to review and assess various strategic opportunities, Edward Fenster, executive chairman of the Sunrun Board, called Mr. Bywater and, after discussing industry matters, expressed interest in exploring a potential strategic transaction with Vivint Solar. Mr. Fenster did not make a proposal for a potential strategic transaction or discuss any terms. Mr. Bywater informed Mr. Fenster that any such proposal would need to be reviewed by the Vivint Solar Board, but that he would convey Mr. Fenster’s message to the Vivint Solar Board. Mr. Bywater shared Mr. Fenster’s interest with other members of the Vivint Solar Board and representatives of Morgan Stanley.

Beginning in early January 2020, at the direction of members of the Vivint Solar Board, representatives of Morgan Stanley and BofA Securities, on behalf of Vivint Solar, began to contact prospective counterparties in connection with a potential strategic transaction. During the course of the strategic transaction outreach process, 24 prospective bidders were contacted, including 8 strategic parties and 16 financial parties. Of the 24 prospective bidders, 15 executed confidentiality agreements, including (1) Sunrun, (2) Party C, (3) Party D, (4) a private equity firm (“Party G”) and (5) a strategic party (“Party H”). None of the 15 confidentiality agreements with the potential bidders restricted them from making unsolicited proposals to Vivint Solar or contained other standstill restrictions. While Party F was contacted in the course of the strategic transaction process, Party F declined to sign a confidentiality agreement and did not participate in further conversations with Vivint Solar with respect to a potential strategic transaction. Party A, Party B and Party E were not contacted in the course of the strategic transaction process because a potential combination with Party A was not expected to be attractive to the Vivint Solar Board or Vivint Solar’s stockholders, Party B had previously indicated that it was interested in pursuing commercial opportunities with Vivint Solar rather than a potential strategic transaction and Party E

 

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had previously proposed an unattractive valuation for Vivint Solar and was not expected to propose a valuation that would be attractive to the Vivint Solar Board.

On January 23, 2020, the Vivint Solar Board held a regularly scheduled meeting with members of Vivint Solar’s management in attendance, which included a discussion in executive session of Vivint Solar’s strategic opportunities, including a discussion of the commencement of the potential transaction process.

Over the course of January and early February 2020 (or, if earlier, the date on which a potential bidder ceased to pursue a potential transaction), each of the potential bidders that signed a confidentiality agreement conducted due diligence and was provided access to the online data room. The online data room included the confidential information presentation, which contained certain financial forecasts, and a financial model that, along with the financial forecasts in the confidential information presentation, was prepared by Vivint Solar management for the potential transaction process. Sunrun received a subset of such forecasts that excluded certain information relating to Vivint Solar’s “DevCo” (as discussed further in the section entitled “The Merger—Certain Vivint Solar Unaudited Prospective Financial Information” beginning on page [●] of this joint proxy statement/prospectus). We refer to such forecasts together as the “January Forecasts”. The bidders were asked to submit written preliminary indications of interest by February 19, 2020 should they wish to continue exploring a transaction involving Vivint Solar.

On February 14, 2020, at the request of Lynn Jurich, Sunrun’s chief executive officer, Mr. Bywater met with Ms. Jurich in Salt Lake City, Utah. Ms. Jurich conveyed Sunrun’s interest in pursuing a strategic transaction, and expressed that a transaction could present a potentially compelling opportunity for the stockholders of the two companies. Mr. Bywater told Ms. Jurich that he would convey Sunrun’s interest to the Vivint Solar Board.

On behalf of Vivint Solar, representatives of Morgan Stanley and BofA Securities received non-binding indications of interest from five parties. The ten other parties who had signed confidentiality agreements did not submit indications of interest. On February 19, 2020, Sunrun submitted an indication of interest proposing a strategic combination with Vivint Solar in which shares of Vivint Solar common stock would be exchanged for shares of Sunrun common stock at an unspecified exchange ratio that would be between 0 to 5% greater than an at-market exchange ratio. On February 19, 2020, Party C submitted an indication of interest proposing to acquire Vivint Solar for $8.00 to $9.00 per share in cash, and Party H submitted an indication of interest proposing to acquire Vivint Solar for $1.42 billion, or approximately $10.69 per share in cash. On February 21, 2020, Party G submitted an indication of interest proposing to acquire Vivint Solar for $10.50 to $11.00 per share in cash. On February 25, 2020, Party D submitted an indication of interest proposing to acquire Vivint Solar for $12.00 per share in cash or cash and stock. Between February 18, 2020 and February 25, 2020, the closing market price of shares of Vivint Solar common stock ranged from a low of $11.04 per share to a high of $12.85 per share.

On February 23, 2020, Mr. Fenster and Thomas Plagemann, Chief Commercial Officer of Vivint Solar, met at an industry conference in Las Vegas, Nevada. Mr. Fenster conveyed to Mr. Plagemann Sunrun’s interest in pursuing a strategic transaction. Promptly following this discussion, Mr. Plagemann reported his conversation with Mr. Fenster to Mr. Bywater.

On March 2, 2020, the Vivint Solar Board met telephonically with members of Vivint Solar’s management and representatives of Simpson Thacher & Bartlett LLP (“Simpson Thacher”) and Wilson Sonsini Goodrich & Rosati (“Wilson Sonsini”), each outside counsel to Vivint Solar, and Morgan Stanley, in attendance. Representatives of Morgan Stanley reviewed with the Vivint Solar Board the potential transaction process, the potential parties contacted and the indications of interest received from Sunrun, Party C, Party D, Party G and Party H. The representatives of Morgan Stanley and the Vivint Solar Board discussed whether to continue with the potential transaction process and, if so, which bidders should be advanced to the next round. The Vivint Solar Board supported the inclusion of Sunrun, Party D, Party G and Party H in the next round, but determined not to include Party C unless it meaningfully increased its proposed valuation. In addition, the Vivint Solar Board

 

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determined that representatives of Morgan Stanley should tell Sunrun that in order to be competitive, Sunrun would need to offer an exchange ratio with a premium that would exceed the 0 to 5% premium that it had previously proposed so as to share more of the synergy value with Vivint Solar’s stockholders. In addition, the representatives of Morgan Stanley were told to convey to Party D that the Vivint Solar Board was more interested in the all-cash transaction that Party D included in its offer letter (rather than the cash and stock alternative) and that the Vivint Solar Board would need to better understand Party D’s expected sources of third-party capital. Representatives of Wilson Sonsini reviewed with the Vivint Solar Board its fiduciary duties and also reviewed the anticipated regulatory approval process in connection with a potential transaction with Sunrun or Party D.

Between March 3 and 4, 2020, on behalf of Vivint Solar and consistent with the Vivint Solar Board’s directives, representatives of Morgan Stanley informed Sunrun, Party D, Party G and Party H that they would be included in the next round and informed Party C that it would not be included unless it made a meaningful increase to its proposed valuation. To support its proposed valuation, Party D asked Morgan Stanley for introductions to potential funding partners involved in the process.

On March 9, 2020, the Vivint Solar Board met telephonically with members of Vivint Solar’s management and representatives of Morgan Stanley, BofA Securities, Simpson Thacher and Wilson Sonsini in attendance. Representatives of Morgan Stanley reviewed with the Vivint Solar Board the status of the potential transaction process, including a request Morgan Stanley had received from Sunrun that it be provided exclusivity before continuing with its due diligence and Party D’s request for an introduction to potential funding partners involved in the process. Following discussion among the Vivint Solar Board, the Vivint Solar Board determined that no offer received to date was sufficiently attractive to grant exclusivity to any bidder (including Sunrun) and that Party D should be introduced to and be allowed to partner with Party C and continue in the next round of the potential transaction process. The Vivint Solar Board also discussed the possibility of forming a strategic transactions committee of the board to facilitate the efficient and responsive oversight and management of the potential transaction process. Following discussion, the Vivint Solar Board was supportive of forming such a committee, which would consist of David F. D’Alessandro, Joseph S. Tibbetts, Jr. and Peter Wallace, and agreed that a written consent setting forth the powers and responsibilities of the committee would be circulated following the meeting for the board’s approval. Representatives of Wilson Sonsini reviewed with the Vivint Solar Board the anticipated regulatory approval process in connection with a potential transaction with Sunrun or Party D.

On March 10, 2020, on behalf of Vivint Solar and consistent with the Vivint Solar Board’s directives, Morgan Stanley introduced Party D to Party C and indicated that they could partner together on a potential bid for Vivint Solar.

On March 15, 2020, by unanimous written consent, the Vivint Solar Board established a strategic transactions committee consisting of David F. D’Alessandro, Joseph S. Tibbetts, Jr. and Peter Wallace. The Vivint Solar strategic transactions committee was delegated the power and authority to, among other things, evaluate proposals relating to any potential strategic transaction, negotiate the terms of any agreement relating to any potential strategic transaction and make recommendations to the Vivint Solar Board with respect to any potential strategic transaction. Any potential strategic transaction would need to be approved by the Vivint Solar Board.

On March 19, 2020, Party G informed representatives of Morgan Stanley that it was no longer interested in pursuing a potential transaction in light of the recent volatility in the financial markets.

From March 2020 through July 2020 (or, if earlier, the date on which a potential bidder ceased to pursue a potential transaction), each of the potential bidders conducted due diligence, which included virtual presentations from Vivint Solar management, telephonic diligence sessions, review of additional documentary materials and other customary due diligence. During this time, Vivint Solar also conducted limited due diligence on Party D,

 

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which it ceased after Party D and Party C submitted a joint non-binding indication of interest in mid-April 2020 proposing an all-cash transaction. Vivint Solar also conducted due diligence on Sunrun, which included virtual presentations from Sunrun senior management, telephonic diligence sessions, review of additional documentary materials and other customary due diligence. Sunrun opened its virtual data room to Vivint Solar and its advisors on March 27, 2020.

On March 31, 2020, the Vivint Solar Board met telephonically with members of Vivint Solar’s management and representatives of Morgan Stanley, Simpson Thacher and Wilson Sonsini in attendance. Representatives of Morgan Stanley reviewed with the Vivint Solar Board the status of the potential transaction process and the impact of COVID-19 on the stock market and the market price of shares of Vivint Solar’s common stock, which had declined 59.7% between March 3, 2020, and March 27, 2020. Morgan Stanley also noted that the bidders were asked to submit revised indications of interest in order to ascertain whether, in light of the significant decline in the market value of Vivint Solar’s common stock arising out of, among other things, COVID-19, the bidders continued to support the indicative valuations stated in their initial indications of interest. The Vivint Solar Board was supportive of this approach. Representatives of Simpson Thacher and Wilson Sonsini reviewed with the Vivint Solar Board the anticipated regulatory approval process for a potential transaction with Sunrun and the material provisions of the two draft merger agreements that were to be provided to bidders—one for cash bidders and the other for stock bidders—including the merger consideration, the treatment of equity awards and employee matters, restrictions on the ability of Vivint Solar to solicit alternative proposals and the ability to respond to certain unsolicited proposals, the closing conditions, the interim operating covenants, regulatory efforts covenants and the termination provisions and related fees.

On April 1, 2020, the Sunrun Board held a telephonic board meeting, which was attended by Sunrun senior management. Ms. Jurich and Mr. Fenster provided the Sunrun Board with background regarding a potential transaction with Vivint Solar, including an update on their conversations with representatives of Vivint Solar and Morgan Stanley. Ms. Jurich and Mr. Fenster described for the Sunrun Board their views with respect to the strategic rationale and challenges of a potential strategic transaction with Vivint Solar. After discussion, the Sunrun Board expressed support for a strategic transaction with Vivint Solar and authorized Sunrun senior management to continue to negotiate with representatives of Vivint Solar.

On April 15, 2020, the Vivint Solar Board held a regularly scheduled telephonic meeting with members of Vivint Solar’s management and representatives of Morgan Stanley, BofA Securities and Wilson Sonsini in attendance, which was largely focused on ordinary course matters and included an update from representatives of Morgan Stanley on the potential transaction process.

Later on April 15, 2020, Party C and Party D submitted a joint non-binding indication of interest proposing to acquire Vivint Solar for $6.00 per share in cash, of which up to 25% of the equity financing would be provided by Party D. The indication of interest noted that Party C would be willing to provide up to all of the equity financing if Party D did not participate in the transaction. The indication of interest was predicated on the receipt of exclusivity. On that day, the closing market price of shares of Vivint Solar common stock was $5.32 per share.

On April 16, 2020, the Vivint Solar strategic transactions committee met telephonically with members of Vivint Solar’s management and representatives of Morgan Stanley, Simpson Thacher and Wilson Sonsini in attendance. Mr. Bywater reviewed with the Vivint Solar strategic transactions committee the status of the potential transaction process and the progress of bidders in submitting revised indications of interest, noting that: (i) Sunrun had informed Vivint Solar that it would need at least an additional week to submit a revised indication of interest; (ii) Party H had informed Vivint Solar that it would need at least three to four additional weeks; (iii) and Party C and Party D had submitted a non-binding indication of interest the prior day proposing to acquire Vivint Solar for $6.00 per share in cash and requesting exclusivity in order to finalize due diligence and definitive documentation with respect to the potential strategic transaction. Following discussion, the Vivint Solar strategic transactions committee was supportive of continuing to explore a potential transaction with Party C and Party D, but did not believe that Party C and Party D’s offer was sufficiently attractive for a grant of

 

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