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Item 9A. Controls and Procedures

2024-02-21 compared with 2023-02-22 · 73 added, 50 removed, 153 unchanged (45% of the section changed)

3 unchanged sentences

In connection with that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective and designed to provide reasonable assurance that the information required to be disclosed is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms as of December 31, 2023.

The term “disclosure controls and procedures,” as defined in Rules 13a-15I and 15d-15I under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

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Other Information.

Senior Secured Credit Facility

On February 16, 2024, a wholly owned subsidiary of ours entered into an amendment (the “Amendment”) to a syndicated, senior secured credit facility originally entered into with various lenders on April 20, 2021 (the “Initial Credit Facility”) which has previously been amended five times (as amended, the “Credit Facility”).

Prior to the Amendment, the Credit Facility had commitments of $1.8 billion and matured on April 20, 2025.

Prior to and after the Amendment, the Credit Facility is non-recourse to us and is secured by net cash flows from power purchase agreements and leases available to the subsidiary borrower after distributions to tax equity investors and payment of certain operating, maintenance and other expenses.

The Amendment amends certain terms of the Credit Facility, including:

• extending the maturity date to February 16, 2028;

• in the case of each lender (other than certain commercial paper conduit lenders (“CP Lenders”)), increasing the interest rate (i) for the period from the date of the Amendment to February 16, 2027 from the SOFR index + 215 basis points to such index + 265 basis points and (ii) for the period from and after February 16, 2027, from the SOFR index + 315 basis points to such index + 365 basis points;

• in the case of each CP Lender, revising the interest rate (i) for the period from the date of the Amendment to February 16, 2027 from the SOFR index + a margin of 215 basis points to the applicable commercial rate for such CP Lender + 235 basis points and (ii) for the period from and after February 16, 2027 from the applicable SOFR index + a margin of 315 basis points to the applicable commercial paper rate for such CP Lender + 335 basis points;

• increasing total loan commitments available by $550.0 million, bringing the total commitments to $2.35 billion.

The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as an exhibit to this Annual Report on Form 10-K for the year ended December 31, 2023.

Line of Credit

On February 20, 2024, we entered into Amendment No.

3 ( “Amendment No.

3”) to that certain Credit Agreement, dated as of January 24, 2022 (as amended by Amendment No.

3, the “Credit Agreement”), by and among Sunrun and the other parties thereto, to, among other things, (a) reduce the commitments to $447.5 million and provide for an accordion of $30.0 million, (b) permit our issuance of our new convertible notes in aggregate amount not to exceed $600.0 million, (c) extend the stated maturity date to November 1, 2025, (d) allow for the further extension of the maturity date to March 1, 2027 if, as of September 30, 2024, we maintain funds on deposit in a collateral account equal to an amount sufficient to repay at the scheduled maturity all of our 0% Senior Convertible Notes due 2026 (the “2026 Convertible Notes”) that are outstanding on September 30, 2024 and we are otherwise in compliance with our quarter-end liquidity covenant (such extension, the “Maturity Date Extension”), (e) revise the margin that accrues on SOFR loans and base rate loans from 3.25% and 2.25%, respectively to 3.25%, 3.50% and 3.75% for SOFR loans and 2.25%, 2.50% and 2.75% for base rate loans, in each case depending on utilization of the facility, (f) maintain funds on deposit in a collateral account equal to the greater of (i) the excess (if any) of (1) the aggregate principal amount of all convertible debt outstanding as of the relevant date of determination over (2) $700 million and (ii) if the Maturity Date Extension has occurred, the amount necessary to repay in full at scheduled maturity the principal amount of the 2026 Convertible Notes that remain outstanding as of such date of determination, (g) provide for payment of principal based on a percentage of a measure of cash generated by certain activities as specified in the agreement after the second quarter of 2024, and (h) limit utilization of the facility by a multiple of cashflows produced from certain operating assets and available for distribution to us.

In connection with entering into Amendment No.

3, we repaid approximately $152.3 million in outstanding borrowings under the Credit Agreement.

The foregoing description of Amendment No.

3 is qualified in its entirety by reference to the full text of Amendment No.

3, a copy of which is filed as an exhibit to this Annual Report on Form 10-K for the year ended December 31, 2023.

Rule 10b5-1 Disclosure

During our last fiscal quarter, some of our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated the contracts, instructions or written plans for the purchase or sale of our securities as noted below.

On November 3, 2023 , Gerald Risk , a member of our Board , terminated a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c).

The trading plan was set to expire on February 24, 2024 and provided for the sale of up to 135,000 shares of common stock, which was based upon the Company's stock price reaching a certain series of price thresholds.

On November 13, 2023 , Mary Powell , our Chief Executive Officer and a member of our Board, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c).

The trading plan will expire on December 31, 2024 and provides for the sale of up to 6,463 shares of common stock, subject to the Company’s stock price reaching a certain price threshold.

On November 22, 2023 , Jeanna Steele , our Chief Legal & People Officer , adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c).

The trading plan will expire on February 28, 2025 and provides for the following transactions, each of which is based upon the Company's stock price reaching a series of price thresholds:

(i) the exercise of up to 111,398 stock options and the sale of the underlying shares of common stock, (ii) the sale of up to 21,000 shares of common stock, (iii) the sale of up to 81,842 restricted stock unit awards previously granted to Ms.

Steele’s that may vest and be released to her upon satisfaction of the applicable time-based and performance-based vesting conditions, and (iv) the sale of up to 2,157 shares of common stock that Ms.

Steele may purchase under the ESPP, which is based in part on Ms.

Steele’s current salary.

The actual number of shares that may be purchased under the ESPP will be affected by any changes to Ms.

Steele’s base salary and the stock price of the Company as calculated in accordance with the terms of the ESPP.

On November 24, 2023 , Paul Dickson , our Chief Revenue Officer , adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c).

The trading plan will expire on February 20, 2025 and provides for the following transactions, each of which is based upon the Company's stock price reaching a series of price thresholds:

(i) the exercise of up to 55,067 stock options and the sale of the underlying shares of common stock, (ii) the sale of up to 50,376 shares of common stock, and (iii) the sale of up to 55,214 restricted stock unit awards previously granted to Mr.

Dickson that may vest and be released to him upon satisfaction of the applicable time-based and performance-based vesting conditions.

On November 30, 2023 , Lynn Jurich , our Co-Executive Chair and a member of our Board, adopted a trading plan for the sale of the Company’s common stock that is intended to satisfy the affirmative defense of Rule 10b5-1(c).

The trading plan will expire on February 20, 2025 and provides for the following transactions, each of which is based upon the Company's stock price reaching a series of price thresholds:

(i) the exercise of up to 145,988 stock options and the sale of the underlying shares of common stock, and (ii) the sale of up to 850,000 shares of common stock, some of which are subject to the Company’s stock price reaching a certain price threshold.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Directors, Executive Officers and Corporate Governance.

The information required by this Item 10 of Form 10-K will be set forth in our proxy statement to be filed with the SEC in connection with the solicitation of proxies for our 2023 Annual Meeting of Stockholders (“Proxy Statement”) and is incorporated herein by reference.

The information required by this Item 10 of Form 10-K will be set forth in our proxy statement to be filed with the SEC in connection with the solicitation of proxies for our 2024 Annual Meeting of Stockholders (“Proxy Statement”) under the section titled “Directors, Executive Officers and Corporate Governance” and is incorporated herein by reference.

The Proxy Statement will be filed with the SEC within 120 days after the year-end of the fiscal year which this report relates.

Executive Compensation.

The information required by this Item 11 will be set forth in the Proxy Statement and is incorporated herein by reference.

The information required by this Item 11 will be set forth in the Proxy Statement under the section titled “Executive Compensation” and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 will be set forth in the Proxy Statement and is incorporated herein by reference.

The information required by this Item 12 will be set forth in the Proxy Statement under the section titled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 will be set forth in the Proxy Statement and is incorporated herein by reference.

The information required by this Item 13 will be set forth in the Proxy Statement under the section titled “Certain Relationships and Related Transactions, and Director Independence” and is incorporated herein by reference.

Principal Accounting Fees and Services.

The information required by this Item 14 will be set forth in the Proxy Statement and is incorporated herein by reference.

Exhibits, Financial Statement Schedules.

The information required by this Item 14 will be set forth in the Proxy Statement under the section titled “Ratification of Appointment of Independent Registered Public Accounting Firm” and is incorporated herein by reference.

Exhibits and Financial Statement Schedules.

Documents filed as part of this report are as follows:

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Exhibit Filing Date

3.1 Amended and Restated Certificate of Incorporation of the Registrant

10-Q 001-37511 3.1 9/15/2015

3.2 Amended and Restated Bylaws of the Registrant

10-Q 001-37511 3.2 9/15/2015

3.3 Amendment to Amended and Restated Bylaws

8-K 001-37511 3.1 7/10/2020

3.1 Restated Certificate of Incorporation of Sunrun Inc.

001-37511 3.3 6/7/2023

3.2 Bylaws of Sunrun Inc., Amended and Restated as of June 2, 2023

001-37511 3.4 6/7/2023

4.1 Form of common stock certificate of the Registrant

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S-1 333-205217 10.6 6/25/2015

10.8+ Mainstream Energy Corporation 2009 Stock Plan

S-1 333-205217 10.7 6/25/2015

10.9+ Sunrun Inc.

Amended and Restated Executive Incentive Compensation Plan

19 unchanged sentences

8-K 001-37511 10.1 2/22/2023

Amended and Restated Confirmatory Employment Letter by and between Lynn Jurich and Sunrun, Inc., dated February 22, 2023

8-K 001-37511 10.2 2/22/2023

Exhibit Incorporated by Reference Filed Herewith

1 unchanged sentence

Exhibit Filing Date

10.17+ Amended and Restated Confirmatory Employment Letter by and between Lynn Jurich and Sunrun, Inc., dated February 22, 2023

8-K 001-37511 10.2 2/22/2023

10.18+ Offer Letter between Tom vonReichbauer and Sunrun Inc., dated as of April 17, 2020

8-K 001-37511 10.2 4/23/2020

10.19+ Employment Letter between the Registrant and Christopher Dawson, dated as of November 13, 2017

8-K 001-37511 10.1 12/6/2017

10.17+ Executive Employment Agreement between Sunrun Inc.

4 unchanged sentences

10-K 001-37511 10.21 2/17/2022

10.22+ Consulting Agreement by and between Sunrun Inc.

and Tom vonReichbauer, dated May 4, 2022

10-Q 001-37511 10.1 8/3/2022

Employment Agreement by and between Danny Abajian and Sunrun Inc., dated April 28, 2022

8-K 001-37511 10.1 5/4/2022

10.24+ Separation Agreement by and between Christopher Dawson and Sunrun, Inc., dated December 31, 2021

8-K 001-37511 10.1 1/6/2022

Board Services Agreement between the Registrant and Gerald Risk, dated as of February 1, 2014

S-1 333-205217 10.15 6/25/2015

10.26+ Amended and Restated Non-Employee Director Pay Policy, Amended December 23, 2021

10-K 001-37511 10.24 2/17/2022

Amended and Restated Non-Employee Director Pay Policy, Amended July 28, 2023

Subscription Agreement dated July 29, 2020, between Sunrun Inc.

10 unchanged sentences

8-K 001-37511 10.2 8/5/2021

10.31¥ Credit Agreement, dated as of April 20, 2021, among Sunrun Luna Portfolio 2021, LLC, Credit Suisse AG, New York Branch (as administrative agent), Wells Fargo Bank, National Association (as collateral agent and as paying agent) and each of the lenders and funding agents identified on the signature pages thereto

10-Q 001-37511

10.2¥ 8/5/2021

10.32¥ Amendment to the Credit Agreement, dated as of May 5, 2021, among Sunrun Luna Portfolio 2021, LLC, Credit Suisse AG, New York Branch (as administrative agent) and each of the lenders and funding agents identified on the signature pages thereto

10-Q 001-37511

10.3¥ 8/5/2021

Exhibit Incorporated by Reference Filed Herewith

Number Exhibit Description Form File No.

Exhibit Filing Date

10.33¥ Second Amendment to the Credit Agreement, dated as of October 8, 2021, among Sunrun Luna Portfolio 2021, LLC, Credit Suisse AG, New York Branch (as administrative agent) and each of the lenders and funding agents identified on the signature pages thereto

10-Q 001-37511

10.1¥ 11/4/2021

10.34¥ C redit Agreement, dated as of January 24, 2022, by and amo ng the Company, KeyBank National Association, as administrative agent, Sili con Valley Bank, as collateral agent, and each of the guarantors, lenders, and arrangers identified on the signature pages thereto

Credit Agreement, dated as of January 24, 2022, by and among the Company, KeyBank National Association, as administrative agent, Silicon Valley Bank, as collateral agent, and each of the guarantors, lenders, and arrangers identified on the signature pages thereto

8-K 001-37511 10.1 1/26/2022

10.35¥ C redit Agreement, dated as of January 24, 2022, by and among the Company, KeyBank National Association, as administrative agent, Silicon Valley Bank, as collater al agent, and each of the g uar antors , lenders and arrangers id entified on the signature pages thereto, and as amended by Ame ndment No.

1 to the Credit Agree ment, dated as of March 8, 2022

Credit Agreement, dated as of January 24, 2022, by and among the Company, KeyBank National Association, as administrative agent, Silicon Valley Bank, as collateral agent, and each of the guarantors, lenders and arrangers identified on the signature pages thereto, and as amended by Amendment No.

1 to the Credit Agreement, dated as of March 8, 2022

10-Q 001-37511 10.2 5/4/2022

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2 to the Credit Agreement, dated as of November 2, 2022

10.36 2/22/2023

Exhibit Incorporated by Reference Filed Herewith

Number Exhibit Description Form File No.

Exhibit Filing Date

Credit Agreement, dated as of April 20, 2021, by and among Sunrun Luna Portfolio 2021, LLC, as Borrower, Atlas Securitized Products Holdings, L.P., as Administrative Agent, Wells Fargo Bank, National Association, as Collateral Agent and Paying Agent, and the Lenders and Funding Agents party thereto from time to time, as amended by the Amendment to the Credit Agreement, dated as of May 5, 2021, the Second Amendment to Credit Agreement, dated as of October 8, 2021, the Third Amendment to Credit Agreement, dated as of March 23, 2022, Fourth Amendment to Credit Agreement and First Amendment to Amended and Restated Custodial Agreement, dated as of May 10, 2023, the Fifth Amendment to Credit Agreement and First Amendment to Transaction Management Agreement, dated as of December 27, 2023, and the Sixth Amendment to the Credit Agreement, dated as of February 16, 2024.

Credit Agreement, dated as of January 24, 2022, by and among the Company, KeyBank National Association, as administrative agent, Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as collateral agent, and each of the guarantors, lenders and arrangers identified on the signature pages thereto, and as amended by Amendment No.

1 to the Credit Agreement, dated as of March 8, 2022, as further amended by Amendment No.

2 to the Credit Agreement, dated as of November 2, 2022, and as further amended by Amendment No.

3 to the Credit Agreement, dated as of February 20, 2024.

21.1 List of subsidiaries of the Registrant

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Policy for Recoupment of Incentive Compensation

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101.SCH XBRL Taxonomy Schema Linkbase Document

101.CAL XBRL Taxonomy Definition Linkbase Document

101.DEF XBRL Taxonomy Calculation Linkbase Document

Exhibit Incorporated by Reference Filed Herewith

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Exhibit Filing Date

101.CAL XBRL Taxonomy Definition Linkbase Document

101.DEF XBRL Taxonomy Calculation Linkbase Document

101.LAB XBRL Taxonomy Labels Linkbase Document

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/s/ Mary Powell Chief Executive Officer and Director (Principal Executive Officer) February 21, 2024

/s/ Danny Abajian Chief Financial Officer (Principal Financial Officer) February 22, 2023

/s/ Danny Abajian Chief Financial Officer (Principal Financial and Accounting Officer)

February 21, 2024

Danny Abajian

/s/ Michelle Philpot Chief Accounting Officer (Principal Accounting Officer) February 22, 2023

Michelle Philpot

/s/ Lynn Jurich Co-Chair and Director February 21, 2024

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures