Prospectus excerpt: Genie Energy Ltd., a Delaware corporation is offering to exchange up to 8,750,000 of its outstanding shares of its Class B Common Stock, par value $0.01 per share, on a one for one basis, for shares of newly-issued Series 2012-A Preferred Stock, par value $0.01 per share, on the terms and subject to the conditions set forth in this offer to exchange (as it may be amended or supplemented from time to time, this ÙOffer to Exchangeˆ) and in the accompanying letter of transmittal (the ÙLetter of Transmittalˆ). For each share of Class B Common Stock, we are offering to exchange one share of Preferred Stock. We refer to this offer, on the terms and subject to the conditions set forth in this Offer to Exchange, as the ÙExchange Offer.ˆ
The 8,750,000 shares of Class B Common Stock subject to the Offer to Exchange represents approximately 41% of the outstanding shares of Class B Common Stock and approximately 50% of the outstanding shares of Class B Common Stock not beneficially owned by our controlling stockholder, Howard S. Jonas and his affiliates, which include Howard S. Jonas 2009 Annuity Trust I, Howard S. Jonas 2009 Annuity Trust II, and custodial accounts for the benefit of Mr. Jonas? children (of which Mr. Jonas is the custodian) (collectively, the ÙJonas Groupˆ).
Mr. Jonas has indicated that the Jonas Group will not tender any shares of Class B Common Stock beneficially owned by them in the Exchange Offer as further detailed in the section titled ÙAdditional Information Regarding the Exchange Offer ? Background of the Transactions.ˆ
Each share of Preferred Stock will have a liquidation preference of $8.50 per share (the ÙLiquidation Preferenceˆ), will be entitled to receive an annual dividend per share equal to the sum of (i) $0.6375 (the ÙBase Dividendˆ) plus (ii) seven and one-half percent (7.5%) of the quotient obtained by dividing (A) the amount by which the EBITDA for a fiscal year of our retail energy provider (ÙREPˆ) business exceeds $32 million by (B) 8,750,000 (the ÙAdditional Dividendˆ), payable quarterly in cash. The Preferred Stock will be redeemable, in whole or in part, at the option of Genie following the fourth anniversary of issuance at 101% of the Liquidation Preference plus accrued and unpaid dividends, and following the fifth anniversary of issuance, at the Liquidation Preference plus accrued and unpaid dividends. The Base Dividend will be payable (if declared by our Board of Directors, and will be accrued, if not declared) quarterly, on each February 15, May 15, August 15 and November 15, commencing with November 15, 2012 (which will be prorated for the portion of our third fiscal quarter during which the Preferred Stock is outstanding), and to the extent that there is any Additional Dividend payable with respect to a fiscal year, it will be paid to holders of Preferred Stock with the May dividend (prorated for fiscal 2012).