the year ending December 31, 2017, additional retention payments and certain bonuses relating to the closing of the Brookfield Transaction consistent with the Company’s general employee compensation practices and programs.
Closing of TerraForm Power Merger and Sponsorship Transaction
On October 16, 2017, pursuant to the Merger and Sponsorship Transaction Agreement, dated as of March 6, 2017 (the “TERP Transaction Agreement”), by and among TerraForm Power, Inc., Parent and BRE TERP Holdings Inc., BRE TERP Holdings Inc. merged with and into TerraForm Power, Inc. (the “TERP Merger”), with TerraForm Power, Inc. continuing as the surviving corporation in the TERP Merger. Immediately following the consummation of the TERP Merger, Parent held 51% of the shares of Class A common stock of TerraForm Power, Inc. Pursuant to the TERP Transaction Agreement, at or prior to the effective time of the TERP Merger, TerraForm Power and Parent (or one of its affiliates), among other parties, entered into a suite of agreements providing for sponsorship arrangements. Following the closing of the TERP Merger, the directors and executive officers of the Company who previously also served as directors or executive officers of TerraForm Power now exclusively serve as directors and executive officers of the Company.
The closing of the TERP Merger resulted in the accelerated vesting of TerraForm Power, Inc. RSUs held by employees of the Company and of TerraForm Global, Inc. RSUs held by employees of TerraForm Power. In order to facilitate the payment of shares underlying the respective vested RSUs, TerraForm Power and the Company agreed that they would withhold from such payments a number of shares equal in value to the employee portion of all federal, state and local income and employment taxes to the extent such employees elected to pay such taxes through net share vesting. In order to facilitate the remittance of these taxes to the appropriate authorities, each of TerraForm Power and the Company further agreed to send a cash payment to the other, equal in value to the shares withheld. As a result of this arrangement, the Company received $0.3 million from TerraForm Power to cover applicable withholding taxes for the Company’s employees who held TerraForm Power, Inc. RSUs, and the Company expects to pay $0.8 million to TerraForm Power to cover applicable withholding taxes for TerraForm Power employees who held TerraForm Global, Inc. RSUs, which would result in a net cash payment from the Company to TerraForm Power of $0.5 million. The Company’s treasury received 150,933 shares of TerraForm Global, Inc. Class A common stock in connection with such withholdings.
Employment Agreement with Ms. Rebecca Cranna
On October 16, 2017, effective upon the closing of the TERP Merger, Ms. Rebecca Cranna, our Executive Vice President and Chief Financial Officer, became an employee of the Company pursuant to the terms of an employment agreement, dated October 6, 2017, between Ms. Cranna and the Company (the “Employment Agreement”). Prior to the closing of the TERP Merger, Ms. Cranna was an employee of TerraForm Power and was not directly employed by the Company. The Employment Agreement provides that Ms. Cranna will receive a monthly salary of $25,000 from the date of the closing of the TERP Merger until the termination of the Employment Agreement on December 31, 2017 (the “Termination Date”). Ms. Cranna and the Company may mutually agree to extend the Termination Date until the earlier of March 31, 2018 and the date of the closing of the Brookfield Transaction. The Employment Agreement also provides that Ms. Cranna will be eligible to receive a performance bonus of 60% of her annualized base salary, prorated based on the number of months worked under the Employment Agreement, less applicable withholdings. Payment of the performance bonus is subject to Ms. Cranna maintaining high performance and certain other customary conditions.
17. SEGMENT REPORTING
The Company has two reportable segments: Solar Energy and Wind Energy. These segments include the Company’s entire portfolio of power plants and are determined based on the “management” approach. This approach designates the internal reporting used by management for making decisions and assessing performance as the source of the reportable segments. Corporate expenses include general and administrative expenses, acquisition costs, formation and offering related fees and expenses, interest expense on corporate level indebtedness and stock-based compensation.