CONFIDENTIAL TREATMENT REQUESTED — DRAFT FOR DISCUSSION PURPOSES ONLY
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of common stock, par value $0.01 per share, of Calloway-Briggs Renewables Inc. ("CBR" or the "Company") as of [●], 2022 (the "Determination Date"), and as adjusted to reflect the sale of shares of common stock in this offering, for:
• each person or group of affiliated persons known to the Company to beneficially own more than 5% of the outstanding shares of common stock;
• each of the Company's directors;
• each of the Company's named executive officers;
• all of the Company's directors and executive officers as a group; and
• the selling stockholder.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the "SEC"). Under such rules, a person is deemed to beneficially own shares of common stock over which such person has or shares, directly or indirectly, voting power (which includes the power to vote or direct the voting of such shares) or investment power (which includes the power to dispose of or direct the disposition of such shares), or has the right to acquire such voting or investment power within 60 days of the Determination Date. Shares of common stock subject to stock options or restricted stock units ("RSUs") that are currently exercisable or that become exercisable or vest within 60 days of the Determination Date are deemed to be outstanding and beneficially owned by the person holding such options or RSUs for the purpose of computing the number of shares beneficially owned and the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person. Except as indicated by the footnotes below, and subject to applicable community property laws, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
The information set forth in the table below is based upon information supplied to the Company by each director, executive officer, and the selling stockholder, including information contained in the selling stockholder questionnaire and beneficial ownership certification delivered by the selling stockholder to the Company in connection with this offering. The percentages of shares beneficially owned are based on the following share figures:
• Pre-IPO shares outstanding: 100,000,000 shares of common stock outstanding as of the Determination Date (on a fully diluted basis, after giving effect to the conversion of all outstanding shares of preferred stock and after giving effect to the reclassification of all outstanding equity interests of the Company in connection with the corporate reorganization described under "Corporate Reorganization").
• Post-IPO shares outstanding (base offering, no overallotment exercise): 123,713,636 shares of common stock, consisting of 100,000,000 pre-IPO shares outstanding plus 23,713,636 shares offered in the base offering (comprised of 16,895,455 primary shares offered by the Company and 6,818,182 secondary shares offered by the selling stockholder).
• Post-IPO shares outstanding (full overallotment exercise): 127,272,727 shares of common stock, consisting of 100,000,000 pre-IPO shares outstanding plus 27,272,727 total shares offered in this offering (comprised of the 23,713,636 base offering shares plus 3,559,091 additional primary shares issuable upon full exercise of the underwriters' overallotment option).
• Assumed IPO price: $22.00 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus.
The total base offering consists of 23,713,636 shares of common stock, with aggregate gross proceeds of approximately $521,700,000 at an assumed initial public offering price of $22.00 per share. Of these shares, 16,895,455 shares (representing approximately $371,700,000 in aggregate gross proceeds) are primary shares being offered by the Company, and 6,818,182 shares (representing approximately $150,000,000 in aggregate gross proceeds) are secondary shares being offered by the selling stockholder, Pinnacle Vista Capital Partners III, LP. The underwriters have been granted a 30-day overallotment option to purchase up to 3,559,091 additional shares of common stock from the Company (representing approximately $78,300,000 in aggregate gross proceeds), which represents 15% of the base offering. The total number of shares offered in this offering, assuming full exercise of the overallotment option, is 27,272,727 shares (representing approximately $600,000,000 in aggregate gross proceeds). The Company will not receive any proceeds from the sale of shares by the selling stockholder. See "Use of Proceeds."
Unless otherwise indicated in the footnotes to the table below, the address of each person listed in the table is c/o Calloway-Briggs Renewables Inc., 4200 Ridgeline Parkway, Suite 1100, Austin, TX 78746. The address for Pinnacle Vista Capital Partners III, LP and affiliated persons is c/o Pinnacle Vista Capital Management LLC, 900 Park Avenue, 38th Floor, New York, NY 10021.
Beneficial Ownership Table
\* Represents beneficial ownership of less than 1%.
(1) Mr. Pemberton and Ms. Kovac may be deemed to share beneficial ownership of the 62,000,000 shares held by Pinnacle Vista Capital Partners III, LP by virtue of their respective positions as co-founders and managing partners of Pinnacle Vista Capital Management LLC, the general partner of PVCP III. Each of Mr. Pemberton and Ms. Kovac disclaims beneficial ownership of such shares except to the extent of his or her respective pecuniary interest therein. See footnote (a) below.
Footnotes to Beneficial Ownership Table
(a) Shares shown as beneficially owned by Pinnacle Vista Capital Partners III, LP ("PVCP III") are held directly by PVCP III. Pinnacle Vista Capital Management LLC ("PVCM") is the general partner of PVCP III and, in such capacity, may be deemed to share voting and investment power with respect to all shares of common stock held by PVCP III. Hugh Pemberton and Diane Kovac are the co-founders and managing partners of PVCM and, by virtue of their respective positions with PVCM, may be deemed to share voting and investment power over all shares of common stock held by PVCP III. Each of PVCM, Mr. Pemberton, and Ms. Kovac disclaims beneficial ownership of such shares except to the extent of their respective pecuniary interests therein, and the inclusion of such shares in the table shall not be deemed an admission of beneficial ownership by any such person for any purpose. The address for PVCP III, PVCM, Mr. Pemberton, and Ms. Kovac is 900 Park Avenue, 38th Floor, New York, NY 10021.
(b) Following the completion of this offering, Pinnacle Vista Capital Partners III, LP will be party to the Amended and Restated Stockholders' Agreement described under "Certain Relationships and Related-Party Transactions — Amended and Restated Stockholders' Agreement," which provides PVCP III with the right to designate nominees for election to the Company's board of directors. Pursuant to the Amended and Restated Stockholders' Agreement, Pinnacle Vista will be entitled to designate: (i) three directors for so long as it beneficially owns 40% or more of the outstanding shares of common stock; (ii) two directors for so long as it beneficially owns 20% or more but less than 40% of the outstanding shares of common stock; (iii) one director for so long as it beneficially owns 10% or more but less than 20% of the outstanding shares of common stock; and (iv) no directors once it beneficially owns less than 10% of the outstanding shares of common stock. In addition, Pinnacle Vista Capital Partners III, LP will be party to the Registration Rights Agreement described under "Certain Relationships and Related-Party Transactions — Registration Rights Agreement," which provides PVCP III with demand registration rights, piggyback registration rights, and S-3 shelf registration rights, subject to the terms and conditions set forth therein.
(c) All persons listed in the table above (including all directors, executive officers, PVCP III, and each holder of 1% or more of the outstanding pre-IPO common stock) have entered or, prior to the closing of this offering, will enter into lock-up agreements with Hargrove Keating & Co., as representative of the underwriters. The lock-up agreements restrict, for a period of 180 days following the date of the final prospectus relating to this offering, the ability of such persons to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, establish or increase any "put equivalent position" or liquidate or decrease any "call equivalent position" (in each case within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder), or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into, exercisable for, or exchangeable for shares of common stock, or to enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of common stock, whether any such transaction is to be settled by delivery of shares of common stock, in cash, or otherwise, without the prior written consent of Hargrove Keating & Co. See "Lock-Up Agreements" below and "Underwriting" for additional detail regarding the lock-up agreements, including a description of applicable carve-outs and early-release provisions.
(d) Includes [●] shares of common stock issuable upon the exercise of stock options and/or settlement of RSUs that are currently exercisable or that become exercisable or vest within 60 days of the Determination Date. See "Executive Compensation — Outstanding Equity Awards at Fiscal Year End" for additional information regarding outstanding equity awards held by the Company's named executive officers.
(e) The overallotment option of up to 3,559,091 additional shares of common stock is exercisable by the underwriters solely with respect to additional primary shares to be offered by the Company. The selling stockholder is not granting any overallotment shares, and accordingly the number of shares beneficially owned by the selling stockholder after the offering is the same whether or not the overallotment option is exercised. The exercise of the overallotment option affects the selling stockholder's percentage ownership only by reason of the increase in the total number of shares outstanding.
(f) Pre-IPO percentages are based on 100,000,000 shares of common stock outstanding as of the Determination Date (on a fully diluted, as-converted, and as-reclassified basis). Post-IPO percentages (base offering, no overallotment exercise) are based on 123,713,636 shares of common stock outstanding after giving effect to the issuance by the Company of 16,895,455 primary shares in this offering (and the sale by the selling stockholder of 6,818,182 secondary shares, which does not affect the total number of shares outstanding but does affect the number of shares beneficially owned by the selling stockholder). Post-IPO percentages (full overallotment exercise) are based on 127,272,727 shares of common stock outstanding after giving effect to the issuance by the Company of an additional 3,559,091 shares upon full exercise of the underwriters' overallotment option.
(g) The address for Pinnacle Vista Capital Partners III, LP, Pinnacle Vista Capital Management LLC, Mr. Pemberton, and Ms. Kovac is c/o Pinnacle Vista Capital Management LLC, 900 Park Avenue, 38th Floor, New York, NY 10021. The address for all other persons named in the table is c/o Calloway-Briggs Renewables Inc., 4200 Ridgeline Parkway, Suite 1100, Austin, TX 78746.
(h) The Company will not receive any proceeds from the sale of shares of common stock by the selling stockholder. All net proceeds from the sale of secondary shares will be received by the selling stockholder. See "Use of Proceeds."
Selling Stockholder
Identity and Background
Pinnacle Vista Capital Partners III, LP is the sole selling stockholder in this offering. PVCP III is a Delaware limited partnership with its principal office located at 900 Park Avenue, 38th Floor, New York, NY 10021. PVCP III is a private equity fund managed by its general partner, Pinnacle Vista Capital Management LLC, a Delaware limited liability company. PVCM is responsible for the management and investment decisions of PVCP III and exercises voting and investment power over the shares of common stock held by PVCP III. Hugh Pemberton and Diane Kovac are the co-founders and managing partners of PVCM.
PVCP III is a 2016 vintage private equity fund with approximately $4.8 billion in total capital commitments from its limited partners. The fund focuses primarily on growth-equity and buyout investments in the energy, infrastructure, and industrial technology sectors. Pinnacle Vista initially invested approximately $385 million in CBR in 2017 in connection with the Company's initial growth-equity financing, acquiring a majority equity stake. In 2019, PVCP III made a follow-on investment of approximately $120 million in CBR in connection with the Company's Series B preferred stock financing, bringing PVCP III's total invested capital in CBR to approximately $505 million. As a result of these investments and subsequent equity adjustments, PVCP III currently holds 62,000,000 shares of common stock, representing approximately 62.0% of the outstanding shares of common stock on a fully diluted, as-converted basis as of the Determination Date.
Hugh Pemberton and Diane Kovac each serve as directors of CBR as designees of Pinnacle Vista pursuant to the terms of the existing Stockholders' Agreement, which will be amended and restated in connection with the closing of this offering. Mr. Pemberton has served on the CBR board of directors since 2017 and Ms. Kovac has served on the CBR board of directors since 2019. By virtue of their respective positions as co-founders and managing partners of PVCM, Mr. Pemberton and Ms. Kovac may be deemed to share beneficial ownership of all shares of common stock held by PVCP III. Each of Mr. Pemberton and Ms. Kovac disclaims beneficial ownership of such shares except to the extent of his or her respective pecuniary interest therein.
Whitfield Archer & Doss LLP (Philip Archer, Christine Navarro, and Derek Fong) serves as counsel to Pinnacle Vista Capital Partners III, LP in connection with this offering.
Shares Being Sold
In this offering, PVCP III is selling 6,818,182 shares of common stock at the assumed initial public offering price of $22.00 per share, representing aggregate gross proceeds of approximately $150,000,000 to the selling stockholder (before deducting underwriting discounts and commissions and estimated offering expenses). These shares constitute the secondary component of the base offering. The Company will not receive any proceeds from the sale of shares by the selling stockholder. The selling stockholder will bear its pro rata share of underwriting discounts and commissions applicable to the secondary shares being sold in this offering and will bear certain other expenses incurred in connection with the registration and sale of such shares. See "Use of Proceeds" and "Underwriting."
The selling stockholder is not granting the underwriters any overallotment shares. The underwriters' overallotment option, if exercised, will be satisfied solely through the issuance and sale of additional primary shares by the Company.
Post-Offering Ownership. After giving effect to the sale of 6,818,182 shares by the selling stockholder in this offering, PVCP III will beneficially own approximately 55,181,818 shares of common stock, representing approximately 44.6% of the outstanding shares of common stock following the completion of this offering (assuming no exercise of the underwriters' overallotment option), or approximately 43.4% of the outstanding shares of common stock (assuming full exercise of the underwriters' overallotment option). PVCP III will remain the largest stockholder of CBR following the completion of this offering.
Relationship with the Company
PVCP III and its affiliates have had, and following the completion of this offering will continue to have, certain relationships with the Company. A description of such relationships is set forth under "Certain Relationships and Related-Party Transactions," including a description of the following arrangements:
• Management-Services Agreement. The Company is party to a Management-Services Agreement with Pinnacle Vista Capital Management LLC, pursuant to which PVCM provides certain advisory, consulting, and management services to the Company in exchange for an annual management fee of $2,400,000. The Management-Services Agreement will be terminated upon the closing of this offering, and the Company will pay a termination fee in connection therewith. See "Certain Relationships and Related-Party Transactions — Management-Services Agreement."
• Amended and Restated Stockholders' Agreement. In connection with the closing of this offering, the Company, PVCP III, and certain other stockholders will enter into an Amended and Restated Stockholders' Agreement, which will provide PVCP III with board designation rights that step down based on specified ownership thresholds, as well as certain consent rights and information rights. See "Certain Relationships and Related-Party Transactions — Amended and Restated Stockholders' Agreement."
• Registration Rights Agreement. In connection with the closing of this offering, the Company and PVCP III will enter into a Registration Rights Agreement, which will provide PVCP III with demand registration rights, piggyback registration rights, and S-3 shelf registration rights with respect to the shares of common stock held by PVCP III following the completion of this offering, subject to the terms and conditions set forth therein. See "Certain Relationships and Related-Party Transactions — Registration Rights Agreement."
Based on the selling stockholder questionnaire and representation letter delivered by PVCP III to the Company and the underwriters, PVCP III has represented and warranted that neither it nor any of its affiliates, officers, directors, or general or limited partners is a member of, or affiliated with, a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and that PVCP III has no FINRA-restricted-person affiliations.
Lock-Up Agreements
All directors, executive officers, Pinnacle Vista Capital Partners III, LP, and holders of 1% or more of the outstanding shares of pre-IPO common stock (approximately 18 persons and entities in total) have entered into, or prior to the closing of this offering will enter into, lock-up agreements with Hargrove Keating & Co., as representative of the several underwriters.
Lock-Up Period. Pursuant to the lock-up agreements, each signatory has agreed that, for a period of 180 days following the date of the final prospectus relating to this offering (the "Lock-Up Period"), such signatory will not, without the prior written consent of Hargrove Keating & Co.:
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into, exercisable for, or exchangeable for shares of common stock (including without limitation shares of common stock which may be deemed to be beneficially owned by such signatory in accordance with the rules and regulations of the SEC);
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of common stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of common stock, in cash, or otherwise;
(iii) make any demand for, or exercise any right with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock; or
(iv) publicly disclose the intention to make any offer, sale, pledge, disposition, or filing, or to enter into any transaction, swap, hedge, or other arrangement, relating to any shares of common stock.
Carve-Outs. The lock-up agreements provide for customary exceptions to the foregoing restrictions, including:
• transfers to affiliates, members of the immediate family of the signatory, or trusts, partnerships, limited liability companies, or other entities for the direct or indirect benefit of the signatory or the immediate family of the signatory, provided that the transferee agrees to be bound by the terms of the lock-up agreement;
• transfers by operation of law, including pursuant to a qualified domestic relations order or in connection with a divorce settlement;
• estate-planning transfers, including transfers to a revocable trust, the beneficiaries of which are exclusively the signatory and/or members of the immediate family of the signatory;
• the adoption (but not the execution or implementation of transactions under) a trading plan established in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that no sales or other dispositions of common stock shall be made pursuant to such plan during the Lock-Up Period;
• pledges of shares to lending institutions as collateral for bona fide loans, provided that the pledgee agrees to be bound by the terms of the lock-up agreement; and
• the exercise of stock options or the settlement of RSUs granted under the Company's equity compensation plans, provided that the underlying shares received upon exercise or settlement remain subject to the lock-up restrictions for the remainder of the Lock-Up Period.
Early Release. The lock-up restrictions may be released prior to the expiration of the Lock-Up Period: (i) upon the prior written consent of Hargrove Keating & Co. (as representative of the underwriters); or (ii) upon the occurrence of a "Change of Control" (as defined in the lock-up agreement), which generally means (A) the consummation of any merger, consolidation, or similar business combination transaction involving the Company resulting in the stockholders of the Company immediately prior to such transaction holding less than 50% of the voting power of the surviving entity, or (B) the consummation of a sale or disposition of all or substantially all of the assets of the Company.
Issuer Lock-Up. CBR has also agreed that, during the Lock-Up Period, the Company will not, without the prior written consent of Hargrove Keating & Co., (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, loan, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock, or (ii) file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock, subject to customary exceptions, including: (A) the issuance of shares of common stock upon the exercise of outstanding stock options or the settlement of outstanding RSUs; (B) the issuance of shares of common stock or grants of options, RSUs, or other equity awards pursuant to the 2022 Omnibus Equity Incentive Plan (with a total reserve of 12,727,273 shares of common stock) and the 2022 Employee Stock Purchase Plan (with a total reserve of 2,545,455 shares of common stock); (C) the issuance of shares of common stock in connection with acquisitions, strategic transactions, or joint ventures (provided that the aggregate number of shares so issued does not exceed 5% of the outstanding shares of common stock immediately after the closing of this offering and the recipients thereof agree to be bound by lock-up restrictions for the remainder of the Lock-Up Period); and (D) the filing of registration statements on Form S-8 relating to the Company's equity compensation plans.
Status of Lock-Up Execution. As of June 17, 2022, fifteen (15) of the eighteen (18) identified lock-up signatories had executed and delivered their lock-up agreements. Three (3) lock-up agreements remain outstanding as of such date due to the offering having been in a dormant status. The Company and the underwriters expect that all outstanding lock-up agreements will be executed and delivered prior to the commencement of the roadshow.
For additional information regarding the lock-up agreements and the shares that will become eligible for sale following the expiration of the Lock-Up Period, see "Shares Eligible for Future Sale" and "Underwriting."
Post-IPO Equity Plans and Dilutive Securities
The following equity compensation plans have been approved by the Company's board of directors and, where required, by the Company's stockholders, and will become effective upon or prior to the closing of this offering:
2022 Omnibus Equity Incentive Plan. The Company's 2022 Omnibus Equity Incentive Plan (the "2022 Plan") provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock awards, RSUs, performance awards, dividend equivalent rights, and other stock-based awards to eligible participants, including employees, directors, and consultants of the Company and its subsidiaries. A total of 12,727,273 shares of common stock have been reserved for issuance under the 2022 Plan, representing approximately 10% of the 127,272,727 shares of common stock expected to be outstanding following the completion of this offering (assuming full exercise of the underwriters' overallotment option). The 2022 Plan includes an "evergreen" provision pursuant to which the number of shares reserved for issuance under the 2022 Plan will automatically increase on the first day of each fiscal year during the ten-year term of the plan by an amount equal to the lesser of (i) 4% of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) a number of shares determined by the Company's board of directors (or the Compensation Committee thereof). See "Executive Compensation — 2022 Omnibus Equity Incentive Plan."
2022 Employee Stock Purchase Plan. The Company's 2022 Employee Stock Purchase Plan (the "ESPP") is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended. A total of 2,545,455 shares of common stock have been reserved for issuance under the ESPP, representing approximately 2% of the 127,272,727 shares of common stock expected to be outstanding following the completion of this offering (assuming full exercise of the underwriters' overallotment option). Under the ESPP, eligible employees may purchase shares of common stock at a price equal to 85% of the lower of the fair market value of the common stock on the first day of the applicable offering period or on the applicable purchase date. The ESPP provides for six-month offering periods. See "Executive Compensation — 2022 Employee Stock Purchase Plan."
IPO Equity Grants. In connection with this offering, the Company intends to grant equity awards under the 2022 Plan to its named executive officers as follows:
• Garrett Calloway, Chairman and Chief Executive Officer: 500,000 RSUs;
• Elaine Briggs, President, Development: 400,000 RSUs;
• Marcus Yoon, Chief Financial Officer: 300,000 RSUs;
• Sandra Haverford, General Counsel and Corporate Secretary: 200,000 RSUs;
• Dale Renfroe, Chief Operating Officer: 200,000 RSUs;
• Priya Anand, Senior Vice President, Finance and Treasurer: 150,000 RSUs;
• Tomás Quintero, Senior Vice President, Project Development: 150,000 RSUs; and
• Rachel Whitmore, Chief People Officer: 150,000 RSUs.
Each of the foregoing RSU grants is expected to vest in equal annual installments over a four-year period, subject to the recipient's continued service with the Company through each applicable vesting date. The RSU grants are expected to be made on or about the date of the closing of this offering. See "Executive Compensation — IPO Equity Grants."
Shares of common stock issuable under the 2022 Plan, the ESPP, and the IPO equity grants described above are not reflected in the post-IPO shares outstanding figures set forth in the beneficial ownership table above, except to the extent that any such shares are subject to options or RSUs that are currently exercisable or that vest within 60 days of the Determination Date. The Company intends to file one or more registration statements on Form S-8 under the Securities Act of 1933, as amended (the "Securities Act"), covering the shares of common stock issuable under the 2022 Plan and the ESPP. See "Shares Eligible for Future Sale."
Controlled-Company Status and Voting Power
Following the completion of this offering, Pinnacle Vista Capital Partners III, LP will beneficially own approximately 44.6% of the outstanding shares of common stock (assuming no exercise of the underwriters' overallotment option) or approximately 43.4% of the outstanding shares of common stock (assuming full exercise of the underwriters' overallotment option). Combined with the board designation rights provided to Pinnacle Vista under the Amended and Restated Stockholders' Agreement, Pinnacle Vista will continue to have significant influence over the Company's management and affairs, including the outcome of matters submitted to a vote of the Company's stockholders, such as the election and removal of directors, the approval of significant corporate transactions, and amendments to the Company's amended and restated certificate of incorporation and amended and restated bylaws.
The Company has applied to list its common stock on the New York Stock Exchange (the "NYSE") under the symbol "CBRN." Under the NYSE listing rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirements that (i) a majority of the board of directors consist of independent directors, (ii) the compensation committee be composed entirely of independent directors, and (iii) director nominees be selected or recommended by a nominating committee composed entirely of independent directors or by a majority of independent directors.
Immediately following the completion of this offering, the Company does not expect that Pinnacle Vista will control more than 50% of the voting power for the election of directors (given that Pinnacle Vista's post-IPO ownership is expected to be approximately 44.6% or 43.4%, as described above), and accordingly the Company does not expect to qualify as, or to avail itself of the exemptions available to, a "controlled company" under the NYSE listing rules. However, if Pinnacle Vista were to act in concert with one or more other stockholders with respect to the voting of shares for the election of directors, the combined voting power of such persons could exceed the 50% threshold, in which case the Company could qualify as a "controlled company." The Company's board of directors has determined that, even if the Company were to qualify as a "controlled company," the Company would not elect to avail itself of the controlled-company exemptions, and the Company intends to comply in full with the NYSE corporate governance requirements applicable to non-controlled companies, including with respect to the independence of the board of directors and the composition of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.
Notwithstanding the foregoing, investors should be aware that Pinnacle Vista's significant stockholding, combined with its board designation rights, will provide Pinnacle Vista with substantial influence over the Company. Investors are urged to read the risk factors set forth under "Risk Factors — Risks Related to Our Organizational Structure — Pinnacle Vista will continue to have significant influence over us after this offering, including through its board designation rights, and its interests may conflict with ours or yours" and the analysis set forth in the Controlled-Company Exemption Memorandum prepared by the Company's counsel for additional information regarding the independent-director phase-in schedule and the Company's corporate governance practices.
For a description of the board designation rights, step-down schedule, and other governance arrangements between the Company and Pinnacle Vista, see "Certain Relationships and Related-Party Transactions — Amended and Restated Stockholders' Agreement" and "Management — Board Composition and Director Independence."
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Name of Beneficial Owner
5% Stockholders:
Pinnacle Vista Capital Partners III, LP(a)(b)(c)(e)(g)(h)
Directors:
| Garrett Calloway(c)(d) | 13,000,000 | 13.0% | — | 13,000,000 | 10.5% | 13,000,000 | 10.2% |
| Elaine Briggs(c)(d) | 11,000,000 | 11.0% | — | 11,000,000 | 8.9% | 11,000,000 | 8.6% |
| Hugh Pemberton(a)(c)(g) | (1) | (1) | — | (1) | (1) | (1) | (1) |
| Diane Kovac(a)(c)(g) | (1) | (1) | — | (1) | (1) | (1) | (1) |
| Warren Okoro(c)(d) | [●] | * | — | [●] | * | [●] | * |
| Catherine Liang(c)(d) | [●] | * | — | [●] | * | [●] | * |
| Richard Estavez(c)(d) | [●] | * | — | [●] | * | [●] | * |
Named Executive Officers (Non-Director):
| Marcus Yoon(c)(d) | [●] | [●]% | — | [●] | [●]% | [●] | [●]% |
| Sandra Haverford(c)(d) | [●] | * | — | [●] | * | [●] | * |
| Dale Renfroe(c)(d) | [●] | * | — | [●] | * | [●] | * |
| Priya Anand(c)(d) | [●] | * | — | [●] | * | [●] | * |
| Tomás Quintero(c)(d) | [●] | * | — | [●] | * | [●] | * |
| Rachel Whitmore(c)(d) | [●] | * | — | [●] | * | [●] | * |
| All directors and executive officers as a group (13 persons)(c)(d) | [●] | [●]% | — | [●] | [●]% | [●] | [●]% |
Other Pre-IPO Holders (≥1%):
| [●](c) | [●] | [●]% | — | [●] | [●]% | [●] | [●]% |
| [●](c) | [●] | [●]% | — | [●] | [●]% | [●] | [●]% |
| [●](c) | [●] | [●]% | — | [●] | [●]% | [●] | [●]% |