EXECUTIVE COMPENSATION
Compensation Discussion & Analysis
In this Compensation Discussion & Analysis we describe our executive compensation philosophy and programs and compensation decisions
regarding the 2021 compensation of our NEOs listed below in the Summary Compensation Table, who consist of our principal executive officer, principal financial officer, and the three other most highly compensated executive officers. For
fiscal year 2021, our NEOs were Douglas Ostrover, Chief Executive Officer; Alan Kirshenbaum, Chief Financial Officer; Michael Rees, Co-President; Sean Ward, Senior Managing Director; and Marc Zahr, President
of Oak Street Division of Blue Owl.
Compensation Philosophy
Our business as a global alternative asset manager is dependent on the performance of our NEOs and other key employees. Among other things, we
depend on their ability to find, select and execute investments, oversee and improve the operations of our portfolio companies, find and develop relationships with fund investors and other sources of capital and provide other services essential to
our success.
Our compensation philosophy has several primary objectives: (i) attract, motivate and retain talented and experienced
executives in our industry, (ii) reward executives whose knowledge, skills and performance are critical to our success, (iii) align executives interests with our fund investors and stockholders, (iv) foster a shared commitment
among executives by aligning their individual goals with the goals of the executive management team and our company, (v) compensate our executives in a manner that incentivizes them to manage our business to meet our long-term objectives, and
(vi) reinforce our culture and values.
One of our most important values is our
one-firm approach with shared responsibility and success. Therefore, compensation is based on the performance of the Company as a whole, as well as on an individuals contributions to the
Company. For example, we do not compensate people based merely on an individuals accomplishments in relation to the profits and losses of his or her division. In addition, we conduct, at least annually, an evaluation process of each
employees contribution to the firm, including his or her commitment to the firms culture and values.
Base salaries reflect
our NEOs proficiency and experience in their respective roles. In addition to base salary, we utilize a blend of variable and long-term pay vehicles to further incentivize and retain talent and provide an overall compensation package that is
competitive with the market. Performance-based discretionary bonuses are generally paid annually to employees based on our profitability, market analysis and employee performance.
Management equity ownership is a guiding principle for us, and we apply that principle to employees: every professional employee of the firm
is expected to have an equity interest in OWL. This equity ownership serves to align the interests of our employees with those of our stockholders.
Our compensation program is a management tool supporting our mission and values. We believe our program supports, reinforces and aligns our
values, business strategy and operations with the goal of increasing distributable earnings. Compensation arrangements with our NEOs are described below under Elements of Compensation.
We did not engage a compensation consultant with respect to determining our NEOs compensation in 2021. We do not benchmark or set our
NEOs compensation by reference to the compensation of a specific peer group.
Determination of Compensation for NEOs
We do not have a compensation committee. Other than with respect to Messrs. Ostrovers, Zahrs and Reess compensation, our
Board has delegated its authority to approve our NEOs compensation to the
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Management Committee. Messrs. Kirshenbaums and Wards compensation was approved by our Management Committee upon the recommendation of our Chief Executive Officer. Our Management
Committee recommended Messrs. Ostrovers, Zahrs and Reess compensation after considering their experience and contributions to the business, which was approved by the Board at the time of the Business Combination in respect of
Messrs. Ostrover and Rees, and in connection with the Oak Street Acquisition in respect of Mr. Zahr. The Board makes all final determinations regarding equity grants to our NEOs.
Mitigation of Risk
The Company has
determined that any risks arising from its compensation programs and policies are not reasonably likely to have a material adverse effect on the Company. The Companys compensation programs and policies mitigate risk by combining
performance-based, long-term compensation elements with payouts that are highly correlated to the value delivered to stockholders.
Elements of
Compensation
Our current executive compensation program consists of a combination of the following components: (i) base salary,
(ii) cash incentive awards linked to our overall performance, (iii) periodic grants of long-term equity-based compensation, such as Incentive Units and RSUs (each as defined below), and (iv) other executive benefits and perquisites.
We combine these elements in order to formulate competitive compensation packages that provide competitive pay, reward the achievement of financial, operational and strategic objectives and align the interests of our NEOs and other senior personnel
with those of our stockholders.
Base Salary
For 2021, each of our NEOs (other than Mr. Zahr, who did not receive a base salary from Blue Owl in 2021 since the Oak Street Acquisition
closed on December 29, 2021) was paid a salary at an annualized rate of $500,000. Although we believe that the base salaries of our NEOs should not typically be the most significant amount of total compensation, our Management Committee
determined that this amount was sufficient to attract and retain top talent, and to assist with the payment of living costs throughout the year.
Short-Term Cash Bonus Payments
Our Management Committee has authority to award cash bonuses to our NEOs at certain times during the year and at the end of the year. The cash
bonuses are intended to offer incentive compensation by rewarding the achievement of corporate and individual performance objectives. Such cash bonuses are subject to annual review by the Management Committee. We believe that establishing cash bonus
opportunities helps us attract and retain qualified and highly skilled executives. These bonuses are intended to reward executives who have a positive impact on corporate results.
At this time, we are not disclosing the specific performance targets because disclosure of the specific targets would signal areas of
strategic focus and give competitors harmful insight into the direction of our business. We are committed to the long-term success and growth of our enterprise and disclosing short-term objectives would run counter to both our compensation and
business philosophy of focusing on long-term goals and, as a result, could result in confusion for investors. As we gain experience as a public company and expand, we will continue to assess whether the disclosure of specific performance metrics
will cause us competitive harm.
Performance-Based Bonus Payments
With respect to Messrs. Ostrover and Rees, performance-based non-equity compensation is paid quarterly,
in an amount equal to 1.33% of the management fees of Blue Owl (subject to, in certain circumstances, approval rights in each case as set forth in the Investor Rights Agreement) less the NEOs base salary (subject to a 10%
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holdback and an annual true-up following the completion of the Companys annual audit). Prior to the Business Combination, Mr. Ostrover received
2.5% of gross revenues of Owl Rock. With respect to Mr. Zahr, there was no performance-based non-equity compensation paid by Blue Owl in 2021, as the Oak Street Acquisition closed on December 29,
2021. Mr. Zahr has similar performance-based non-equity compensation as Messrs. Ostrover and Rees, which begins at 0.60% of the management fees of Blue Owl and increases to 1.33% of the management fees of
Blue Owl based upon the achievement of the Oak Street Triggering Events.
Discretionary Bonus Payments
Messrs. Kirshenbaum and Ward received discretionary bonus payments for their performance in 2021. The discretionary bonuses awarded to Messrs.
Kirshenbaum and Ward recognize each individuals contributions to our overall goals and performance. We intend the discretionary bonus payments to reward Messrs. Kirshenbaum and Ward for assisting us in achieving our annual goals, both for the
Company as a whole and in each individuals respective area of responsibility. Factors that were included in determining the size of the bonus payments include Messrs. Kirshenbaums and Wards accomplishments in driving our results,
their leadership and management of their respective teams and our overall performance. Comparisons were made to prior-year performance, to our other senior professionals, and compensation that is commensurate within our industry with the intention
to reward, motivate and retain Messrs. Kirshenbaum and Ward.
Long-Term Equity-Based Compensation
We believe that equity-based compensation awards enable us to attract, motivate, retain and adequately compensate executive talent. To that
end, we have awarded equity-based compensation in the form of profits interests (Incentive Units). We believe equity awards provide executives with a significant long-term interest in our success by rewarding the creation of stockholder
value over time.
In 2021, our Chief Executive Officer and Board determined the size of equity granted to our NEOs. Our Chief Executive
Officer and Board considered each NEOs current position with the Company, the size of their total compensation package and the amount of existing vested and unvested equity awards, if any, then held by the NEO when determining the size of
equity granted to our NEOs. No formal benchmarking efforts are made by our Chief Executive Officer or Board with respect to the size of equity grants made to NEOs and, in general, the determination process is informal.
2021 Omnibus Equity Incentive Plan
At the special meeting of the Altimar stockholders held on May 18, 2021, the Altimar stockholders considered and approved the Blue Owl
Capital Inc. 2021 Omnibus Equity Incentive Plan (as amended, the 2021 Omnibus Plan). The 2021 Omnibus Plan was previously approved, subject to stockholder approval, by the board of Altimar on May 17, 2021. The 2021 Omnibus Plan
became effective immediately upon the completion of the Business Combination. The 2021 Omnibus Plan allows for the grant of equity incentives, such as restricted stock units (RSUs), Incentive Units, stock options, stock appreciation
rights, restricted stock.
In 2021, the Company granted Messrs. Kirshenbaum and Ward Incentive Units. Incentive Units entitle the
recipients to receive, through Blue Owl Management Vehicle LP (Blue Owl MV), distributions from Blue Owl Capital Holdings LP (Blue Owl Holdings) and Blue Owl Capital Carry LP (Blue Owl Carry) in accordance with
the terms of, and subject to any restrictions contained in, the applicable limited partnership agreement for each of Blue Owl Carry, Blue Owl Holdings and Blue Owl MV, and will be counted against the share limit under the 2021 Omnibus Plan on a
1.25:1.00 basis.
On October 22, 2021, the Company awarded 1,500,000 Incentive Units to Mr. Ward. Such Incentive Units will vest
in substantially equal installments on August 15 of 2024, 2025 and 2026, subject to Mr. Wards continued employment by, or service to, the Company on each applicable vesting date. If Mr. Wards
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employment or service is terminated by the Company without cause or due to death or disability, the plan administrator has discretion to accelerate and vest any Incentive Units upon such
termination, and, upon any other termination, any unvested profits interests will be immediately terminated and forfeited for no consideration. Upon a Change in Control (as defined in the 2021 Omnibus Plan), the vesting of all or a portion of any
unvested Incentive Units may be accelerated in the discretion of the plan administrator.
On December 15, 2021, the Company awarded
100,000 Incentive Units to Mr. Kirshenbaum, and such Incentive Units were fully vested on grant.
In addition to any awards that it
may grant on an ongoing basis, the Company expects to make grants pursuant to the 2021 Omnibus Plan under annual or year-end incentive programs, including grants of Incentive Units and/or RSUs pursuant to the
2021 Omnibus Plan to certain of its NEOs on an annual basis on or around December or January of each year.
Business Combination Awards
On the date of the Business Combination, Owl Rock merged with Dyal Capital, a former division of Neuberger Berman Group LLC (Neuberger
Berman), to form the Company. Prior to the Business Combination, Neuberger Berman granted profits interest to certain Dyal Capital employees (the Dyal Profits Interests), which were treated as equity-based compensation grants. In
connection with the closing of the Business Combination, the Dyal Profits Interests were replaced with grants of Common Units of the Blue Owl Operating Partnerships, which were immediately vested on grant. Incrementally, the Dyal Capital employees
also received seller earnout units (Seller Earnout Units). The exchange of Dyal Profits Interests for Common Units and Seller Earnout Units was treated as a replacement award under GAAP. Additionally, Mr. Kirshenbaum (and other
related parties of Mr. Kirshenbaum) also received Seller Earnout Units incremental to Mr. Kirshenbaums pre-Business Combination equity. The exchange of Dyal Profits Interests and the issuance
of Seller Earnout Units to Mr. Kirshenbaum in connection with the Business Combination were not as a result of any compensation decisions made by the Management Committee; however, such amounts were required to be accounted for as compensation
under GAAP. As a result, pursuant to SEC rules, the incremental fair value associated with such awards was required to be reflected in the 2021 Summary Compensation Table and the 2021 Grants of Plan-Based Awards table, but
this value was not reflective of any new compensation granted by the Management Committee to Messrs. Rees, Ward and Kirshenbaum.
The
Seller Earnout Units were issued as two series: Series E-1 and Series E-2. Series E-1 and
E-2 vested upon an E-1 and E-2 triggering event (an E-1 Triggering Event and
an E-2 Triggering Event), respectively, which occurred when the volume weighted-average price of our Class A Share exceeded $12.50 and $15.00, respectively, for 20 consecutive trading days.
The Series E-1 Seller Earnout Units experienced an E-1 Triggering Event on July 21, 2021. The Series E-2 Seller Earnout
Units experienced an E-2 Triggering Event on November 3, 2021. Upon the E-1 Triggering Event and E-2 Triggering Event, the
Seller Earnout Units were settled with Common Units.
Oak Street Earnouts
In connection with the Oak Street Acquisition, the Company agreed to make additional payments of Common Units to Mr. Zahr in two tranches
upon the occurrence of certain Oak Street triggering events (such units, Oak Street Earnout Units). Such triggering events (each, an Oak Street Triggering Event) are based on achieving a certain level of quarterly management
fee revenues from existing and future Oak Street products. These Oak Street Earnout Units issued as consideration in the Oak Street Acquisition were not as a result of any compensation decisions made by the Management Committee; however, such
amounts were required to be accounted for as compensation under GAAP. As a result, pursuant to SEC rules, the fair value associated with such award is required to be reflected in the 2021 Summary Compensation Table and the 2021
Grants of Plan-Based Awards table, but this value is not reflective of any new compensation granted by the Management Committee to Mr. Zahr.
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The Oak Street Triggering Events are subject to meeting a minimum level of quarterly
management fees from Oak Street products, and the Oak Street Triggering Event for the second tranche may not occur in the same quarter as the first tranche. The first and second Oak Street Triggering Events will occur when quarterly management fees
from Oak Street products reaches $22.0 million and $28.0 million, respectively. The earliest dates on which the first and second Oak Street Triggering Events can occur are January 1, 2023 and January 1, 2024, respectively.
The Oak Street Earnout Units are also subject to acceleration and will be settled upon the occurrence of: (i) any event where any
person or group (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the voting power of the outstanding voting securities of certain Blue Owl affiliates; (ii) any sale of all or substantially all of the
assets of certain Blue Owl affiliates to another person in one transaction or series of related transactions; (iii) the termination of Mr. Zahrs employment by the Company without Cause or the resignation by Mr. Zahr with Good
Reason (each as defined in Mr. Zahrs Employment Agreement); or (iv) a Change of Control (as defined in the Agreement and Plan of Merger, dated as of October 17, 2021, by and among Blue Owl and the other parties thereto (the
Merger Agreement)) (each, an Oak Street Earnout Unit Acceleration Event).
Other Executive Benefits and Perquisites
We provide the following benefits to our NEOs: (i) health insurance, (ii) life insurance and supplemental life
insurance, (iii) short-term and long-term disability, and (iv) 401(k) plan. We also provide wealth management services to certain of our NEOs. We believe these benefits are generally consistent with those offered by other companies and
specifically with those companies with which we compete for employees.
Termination Payments
We believe that a strong, experienced management team is essential to the best interests of the Company and our stockholders. We have entered
into agreements with some of our NEOs pursuant to which such NEOs are entitled to certain benefits upon certain terminations. These termination benefits are enumerated and quantified in the section captioned Executive Compensation
Potential Payments upon Termination or Change in Control.
Section 280G of the Internal Revenue Code
Section 280G of the Code disallows a tax deduction with respect to excess parachute payments to certain executive officers of
companies that undergo a change in control. In addition, Section 4999 of the Code imposes a 20% excise tax penalty on the individual receiving the excess parachute payment. Parachute payments are compensation that is linked to or
triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans or programs and other equity-based
compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Section 280G of the Internal Revenue Code based on an executive officers prior compensation. In approving compensation
arrangements for our NEOs in the future, we expect that the Board will consider all elements of the cost to us of providing such compensation, including the potential impact of Section 280G of the Code. However, the Board may, in its judgment,
authorize compensation arrangements that could give rise to loss of deductibility of Section 280G of the Code and the imposition of excise taxes under Section 4999 of the Code when it believes that such arrangements are appropriate to
attract and retain executive talent.
Section 162(m) Compliance
Section 162(m) of the Internal Revenue Code limits us to a deduction for federal income tax purposes of no more than $1 million of
compensation paid to certain executive officers in a taxable year. The Management Committee will consider the impact of Section 162(m) when making compensation decisions.
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Section 409A Considerations
Another section of the Code, Section 409A, affects the manner by which deferred compensation opportunities are offered to our employees
because Section 409A requires, among other things, that non-qualified deferred compensation be structured in a manner that limits employees abilities to accelerate or further defer
certain kinds of deferred compensation. We intend to operate our existing compensation arrangements that are covered by Section 409A in accordance with the applicable rules thereunder, and we will continue to review and amend our compensation
arrangements where necessary to comply with Section 409A.
Accounting for Equity-Based Compensation
We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 (ASC 718) for our equity-based
compensation awards. ASC 718 requires companies to calculate the grant date fair value of their equity-based awards using a variety of assumptions. ASC 718 also requires companies to recognize the compensation cost of their equity-based awards in
their income statements over the period that an associate is required to render service in exchange for the award. Future grants of equity- based awards under our equity incentive award plans will be accounted for under ASC 718. We anticipate that
the Management Committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change,
we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
Stockholder Say-on-Pay and
Say-on Frequency Vote
Our stockholders will have their first opportunity to cast an
advisory vote to approve our NEOs compensation at our upcoming annual meeting of stockholders and to determine the frequency of these advisory votes. In the future, we intend to consider the outcome of the say-on-pay and say-on-frequency votes when making compensation decisions regarding our NEOs.
2021 Summary Compensation Table
The
following table summarizes the total compensation paid to or earned by each of our NEOs in 2020 and 2021.
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Name and Principal Position |
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Year |
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Salary ($)(1) |
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Bonus ($)(2) |
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Stock Awards ($)(3) |
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Non-Equity Incentive Plan Compensation ($)(4) |
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All Other Compensation ($)(5) |
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Total ($) |
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Douglas Ostrover |
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2021 |
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500,000 |
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10,898,160 |
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239,018 |
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11,637,178 |
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Chief Executive Officer |
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2020 |
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500,000 |
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5,238,236 |
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72,159 |
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5,810,395 |
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Alan Kirshenbaum |
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2021 |
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500,000 |
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3,233,781 |
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3,662,481 |
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55,046 |
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7,451,308 |
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Chief Financial Officer |
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Michael Rees |
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2021 |
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311,546 |
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693,673,522 |
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6,606,809 |
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75,616 |
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700,667,493 |
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Co-President |
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2020 |
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500,000 |
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99,520,200 |
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41,412,500 |
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11,087,500 |
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152,520,200 |
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Sean Ward |
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2021 |
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311,546 |
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3,829,654 |
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170,614,779 |
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174,755,979 |
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Senior Managing Director |
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2020 |
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500,000 |
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21,461,400 |
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12,712,500 |
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3,337,500 |
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38,011,400 |
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Marc Zahr |
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2021 |
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284,992,422 |
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284,992,422 |
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President of Oak Street Division |
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(1) |
Represents annualized based salaries of $500,000 per NEO. For Messrs. Rees and Ward, salaries paid by the
Company represent amounts earned from the date of the Business Combination. For Mr. Zahr, no amounts are reported, as the Oak Street Acquisition closed on December 29, 2021. |
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(2) |
Represents the discretionary cash bonuses described in further detail above under the section titled
Elements of Compensation Short-Term Cash Bonus Payments. |
(3) |
Represents the grant date fair value of awards computed in accordance with ASC 718. For Messrs. Rees and Ward,
$693,673,522 and $149,589,779, respectively, of these amounts relate to the exchange of Messrs. Reess and Wards pre-merger Dyal Profits Interests for (i) Common Units and (ii) Seller Earnout Units in connection with the
Business Combination and not as a result of any compensation decisions made by the Management Committee; however, such amounts are required to be accounted for as compensation under GAAP. For Mr. Kirshenbaum, $2,206,481 of the amount relates to
the issuance of Seller Earnout Units to Mr. Kirshenbaum (and other related parties of Mr. Kirshenbaum) in connection with the Business Combination. The remaining portion of the amounts presented for Messrs. Kirshenbaum and Ward relate to
Incentive Units. For Mr. Zahr, this amount represents the Oak Street Earnouts issued in connection with the Oak Street Acquisition that were required to be accounted for as compensation rather than consideration under GAAP. See the table below
and Note 13 to our Financial Statements for additional information. |
(4) |
For 2021, with respect to Messrs. Ostrover and Rees, represents quarterly payments in an amount equal to 1.33%
of the management fees of Blue Owl that were earned subsequent to the date of the Business Combination (subject to, in certain circumstances, approval rights in each case as set forth in the Investor Rights Agreement) less the NEOs base
salary. For 2021, with respect to Mr. Ostrover, for periods prior to the date of the Business Combination, represents 2.5% of gross revenues of Owl Rock that Mr. Ostrover received. |
(5) |
For 2021, represents (i) with respect to Mr. Ostrover, $217,397 for wealth management services,
$9,396 for supplemental medical insurance provided to certain executives, and $12,225 for tax gross-ups paid to Mr. Ostrover to cover the costs of the employee portion of the related payroll taxes due in
respect of Mr. Ostrovers compensation prior to the Business Combination; (ii) with respect to Mr. Kirshenbaum, $33,425 for wealth management services, $9,396 for supplemental medical insurance provided to certain executives, and
$12,225 for tax gross-ups paid prior to the Business Combination; and (iii) with respect to Mr. Rees, $75,616 for wealth management services. |
2021 Grants of Plan-Based Awards
The
following table sets forth certain information with respect to grants of plan-based awards for the year ended December 31, 2021, with respect to our NEOs. The amounts presented for the grant date fair value of the awards below were calculated
in accordance with ASC 718.
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Name |
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Grant Date |
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All
Other Stock
Awards: Number
of Shares of Stock
or Units (#) |
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Grant
Date Fair Value of
Stock and Option
Awards ($) |
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Alan Kirshenbaum |
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5/19/2021 |
(1)(2) |
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203,175 |
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1,298,288 |
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5/19/2021 |
(3)(4) |
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203,175 |
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908,192 |
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12/15/2021 |
(5) |
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100,000 |
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1,456,000 |
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Michael Rees |
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5/19/2021 |
(6) |
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73,428,587 |
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660,857,292 |
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5/19/2021 |
(1) |
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3,021,752 |
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19,308,997 |
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5/19/2021 |
(3) |
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3,021,753 |
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13,507,233 |
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Sean Ward |
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5/19/2021 |
(6) |
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15,834,778 |
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142,513,002 |
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5/19/2021 |
(1) |
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651,637 |
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4,163,960 |
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5/19/2021 |
(3) |
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651,637 |
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2,912,817 |
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10/22/2021 |
(7) |
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1,500,000 |
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21,025,000 |
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Marc Zahr |
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12/29/2021 |
(8) |
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11,376,943 |
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144,373,407 |
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12/29/2021 |
(9) |
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11,376,943 |
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140,619,015 |
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(1) |
(Represents Series E-1 Seller Earnout Units issued in connection with
the Business Combination. Such Series E-1 Seller Earnout Units vested upon the occurrence of the E-1 Triggering Event. |
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(2) |
196,403 of these Series E-1 Seller Earnout Units were deposited into
the Alan Kirshenbaum 2015 Family Trust and the Kirshenbaum 2019 Family Trust on the grant date. Additionally, 3,386 of these Series E-1 Seller Earnout Units were transferred to a third party during 2021.
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(3) |
Represents Series E-2 Seller Earnout Units issued in connection with
the Business Combination. Such Series E-2 Seller Earnout Units vested upon the occurrence of the E-2 Triggering Event. |
(4) |
196,403 of these Series E-2 Seller Earnout Units were deposited into
the Alan Kirshenbaum 2015 Family Trust and the Kirshenbaum 2019 Family Trust on the grant date. Additionally, 3,386 of these Series E-2 Seller Earnout Units were transferred to a third party during 2021.
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(5) |
Represents Incentive Units that were fully vested at grant. |
(6) |
Represents Common Units issued in exchange for Messrs. Reess and Wards Dyal Profits Interests in
connection with the Business Combination. Such Common Units were fully vested at grant. |
(7) |
Represents Incentive Units that will vest in three equal installments on August 15, 2024, 2025 and 2026,
subject to continued service of Mr. Ward and in accordance with the applicable Incentive Unit grant certificate. |
(8) |
Represents the grant of the first Oak Street Earnout Units in connection with the Oak Street Acquisition. Such
earnouts will be settled in Common Units upon occurrence of the first Oak Street Earnout Triggering Event. |
(9) |
Represents the grant of the second Oak Street Earnout Units in connection with the Oak Street Acquisition. Such
earnouts will be settled in Common Units upon occurrence of the second Oak Street Earnout Triggering Event. |
Narrative Description to
the Summary Compensation Table and the Grant of Plan-Based Awards Table for 2021
Written Agreements
Blue Owl has entered into an employment and restrictive covenant agreement with each of Messrs. Ostrover, Rees and Zahr (each, an
Employment Agreement), which were amended on February 25, 2022. The term of each Employment Agreement is perpetual until terminated in accordance with its terms. Messrs. Ostrover, Rees and Zahr each have the right to terminate their
employment voluntarily at any time, subject to minimum notice requirements. With respect to Messrs. Ostrover and Rees, Blue Owl may only terminate such NEOs employment for cause (i.e., as required by a final,
non-appealable court order or the conviction of (or plea of no contest to) any felony) or by reason of the NEOs death or disability.
Pursuant to Messrs. Ostrovers and Reess Employment Agreements during 2021, each of Messrs. Ostrover and Rees were entitled during
their employment to a base salary of $500,000, additional compensation, paid quarterly, in an amount equal to 1.33% of the management fees of Blue Owl (subject to downward adjustment and, in certain circumstances, approval rights in each case as set
forth in the Investor Rights Agreement) less the NEOs base salary (subject to a 10% holdback and an annual true-up following the completion of the Companys financial statement audit), and to
participate in Blue Owls employee benefit plans, as in effect from time to time. Pursuant to Mr. Zahrs Employment Agreement during 2021, Mr. Zahr was entitled during his employment to a base salary of $500,000, additional
compensation beginning in 2022, paid quarterly, in an amount equal to a specified percentage of the management fees of Blue Owl (depending on the applicable date and achievement of first and second Oak Street Triggering Events as described above
under the section titled Elements of Compensation Performance-Based Bonus Payments.) less Mr. Zahrs base salary (subject to a 10% holdback and an annual true-up following the
completion of the Companys financial statement audit), and to participate in Blue Owls employee benefit plans, as in effect from time to time.
As amended in February 2022, the Employment Agreements provide that (i) a portion of the NEOs right to receive up to 1.33% (with
respect to Messrs. Ostrover and Rees) or the applicable percentage (with respect to Mr. Zahr) of the Companys annual management fee revenues that exceed such NEOs base compensation (the Additional Amounts) will be paid
in the form of Incentive Units, if offered by the Company and elected by the
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NEO, and (ii) the remainder of any such Additional Amounts will be in the form of cash; provided that (a) for 2022, the amount received in Incentive Units will not be less than 20% of
such Additional Amounts, and (b) for periods subsequent to 2022, the proportional amounts of cash and Incentive Units will be subject to required consent under the Investor Rights Agreement. The number of Incentive Units issued would be
calculated based on the volume weighted average trading price for the ten trading days prior to the payment date. The terms of such Incentive Units are expected to be substantially similar to Incentive Units previously awarded by the Company except
that they would be fully vested upon grant and subject to a one-year lockup period and additional limitations on conversion to Class A or B Shares.
In respect of 2022, the Company offered, and each of Messrs. Ostrover, Rees and Zahr elected to receive, 100% of such Additional Amounts in
Incentive Units.
Each Employment Agreement requires the NEO to protect the confidential information of Blue Owl both during and after
employment. In addition, during the NEOs employment and (i) until two years after the NEOs employment terminates (such NEOs Termination Date, and such period, the Restricted Period), such NEO is
required to refrain from soliciting employees under the circumstances specified therein, (ii) until one year after the NEOs Termination Date (with respect to Messrs. Ostrover and Rees) or during the Restricted Period (with respect to
Mr. Zahr, subject to certain conditions set forth therein), such NEO is required to refrain from soliciting Blue Owls clients under the circumstances specified therein and (iii) until five years after the NEOs Termination Date
(with respect to Messrs. Ostrover and Rees) or the later of (x) the five-year anniversary of the effective date (as defined therein) and (y) the one-year anniversary of the Termination Date (with
respect to Mr. Zahr) (each, the Non-Compete Restricted Period), such NEO is required to refrain from interfering with Blue Owls relationships with investors and from competing with
(a) a business line of Blue Owls as of the NEOs Termination Date or (b) a business line planned (and, with respect to Mr. Zahr, that Mr. Zahr has knowledge of), as of the NEOs Termination Date, to be implemented
within the 12-month period following such Termination Date. Pursuant to Mr. Zahrs Employment Agreement, if his employment is terminated by the Company without cause and without
intermediate cause (each as defined therein) (and not due to his death or disability) or if Mr. Zahr resigns for good reason (as defined therein), the Non-Compete Restricted Period
will terminate and will be deemed to have terminated as of the Termination Date.
Under Messrs. Ostrovers and Reess Employment
Agreements, each NEOs employment may be terminated by Blue Owl solely for cause or by reason of the NEOs death or disability (as such terms are defined in the NEOs Employment Agreement). Furthermore, (i) if Blue Owl terminates
such NEOs employment for cause or such NEOs employment is terminated by reason of death or disability, or if such NEO terminates employment voluntarily, such NEO will be paid accrued but unpaid salary through the date of termination and
(ii) if the NEOs employment is terminated for any reason, such NEO shall be entitled to an annual amount of 1.33% of annual management fee revenues of Blue Owl during the Non-Compete Restricted
Period, but such entitlement does not apply in the case of a termination of such NEOs employment (a) for cause or (b) as a result of voluntary departure by such NEO prior to the fifth anniversary of the date of the Business
Combination. The continued compensation described in clause (ii) in the preceding sentence is subject to the NEOs execution and delivery to Blue Owl of a general release of claims and continued compliance with the NEOs covenants not
to compete with Blue Owl and its affiliates during the Non-Compete Restricted Period.
Under
Mr. Zahrs Employment Agreement, if Mr. Zahrs employment is terminated by Blue Owl without cause or he resigns for good reason (as each such term is defined in the Employment Agreement), Mr. Zahr will be entitled to
receive, depending on his termination date, up to three years of continued base salary and Additional Compensation if his termination occurs prior to January 1, 2026, one year of continued base salary payments and Additional Compensation
through the 2026 year-end if his termination occurs during 2026, or one year of continued base salary payments if his termination occurs after 2026. The continued compensation described in the preceding
sentence is subject to Mr. Zahrs execution and delivery to Blue Owl of a general release of claims and continued compliance with his covenants not to compete with Blue Owl and its affiliates during the applicable restricted period.
Additionally, pursuant to the Merger Agreement, Mr. Zahrs Oak Street
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Earnout Units will accelerate and be settled upon the occurrence of an Oak Street Earnout Unit Acceleration Event. See Long-Term Equity-Based Compensation Oak Street
Earnouts for additional information.
Mr. Kirshenbaum is party to a letter agreement with Owl Rock Capital Partners LP,
dated as of July 22, 2016, which provides for certain termination benefits. Under this letter agreement, in connection with a termination of Mr. Kirshenbaums employment for any reason, he is entitled to (i) continued base salary
and health benefits for the 12-month period following such termination, and (ii) a lump sum cash payment of $1 million to be paid upon the one year anniversary of such termination. The letter
agreement was entered into in exchange for Mr. Kirshenbaums agreement to a 12-month post-employment non-solicitation period and
12-month post-employment period of continued duties of fidelity and good faith.
Outstanding Equity Awards at
2021 Fiscal Year End
The following table sets forth certain information with respect to outstanding equity awards of our NEOs as of
December 31, 2021. The dollar amounts shown in the table below do not reflect the value of compensation actually received by the NEOs, but instead are calculated by multiplying the number of unvested equity awards held by the NEOs by the
closing price of $14.91 per Class A Share on December 31, 2021.
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Stock Awards |
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Name |
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Number of Shares or Units of Stock That Have Not Vested (#) |
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Market Value of Shares or Units of Stock That Have Not Vested ($) |
|
Sean Ward |
|
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1,500,000 |
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|
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22,365,000 |
(1) |
Marc Zahr |
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11,376,943 |
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169,630,220 |
(2) |
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11,376,943 |
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|
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169,630,220 |
(2) |
(1) |
Represents unvested Incentive Units that will vest in three equal installments on August 15, 2024, 2025
and 2026. |
(2) |
Represents unvested first and second Oak Street Earnouts, which will vest when each respective Oak Street
Triggering Event occurs. |
Option Exercises and Stock Vested in the 2021 Fiscal Year
The following table sets forth certain information with respect to the vesting of Blue Owl Operating Group Units during in 2021, with respect to our NEOs.
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Stock Awards |
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Name |
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Number of Shares Acquired on Vesting (#) |
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Value Realized on Vesting ($) |
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Alan Kirshenbaum |
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506,350 |
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7,728,012 |
(1) |
Michael Rees |
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79,472,092 |
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828,301,660 |
(2) |
Sean Ward |
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17,138,052 |
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178,622,159 |
(3) |
(1) |
Represents 203,175 E-1 Earnout Units and 203,175 E-2 Earnout Units settled in Common Units that occurred in connection with the E-1 Triggering Event and E-2 Triggering Event,
respectively, as well as 100,000 Incentive Units that were immediately vested on grant. |
(2) |
Represents the vesting of 3,021,752 E-1 Earnout Units and 3,021,753 E-2 Earnout Units that occurred in connection with the E-1 Triggering Event and E-2 Triggering Event, respectively, as well as
73,428,587 Common Units issued in exchange for Mr. Rees pre-merger Dyal Capital profits interests in connection with the Business Combination. Such Common Units were fully vested at grant.
|
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(3) |
Represents 651,637 E-1 Earnout Units and 651,637 E-2 Earnout Units settled in Common Units that occurred in connection with the E-1 Triggering Event and E-2 Triggering Event,
respectively, as well as 15,834,778 Common Units issued in exchange for Mr. Wards pre-merger Dyal Capital profits interests in connection with the Business Combination. Such Common Units were fully
vested at grant. |
Potential Payments upon Termination or a Change in Control
As described in the section titled Narrative Description to the Summary Compensation Table and the Grant of Plan-Based Awards Table for
the 2021 Fiscal Year Written Agreements, our NEOs have certain entitlements to payment upon termination. Under Messrs. Ostrovers and Reess employment agreements, in the event either of Messrs. Ostrovers or Reess
employment had terminated on December 31, 2021, for any reason other than (a) for cause or (b) as a result of voluntary departure by such NEO prior to the fifth anniversary of the date of the Business Combination, each of Messrs.
Ostrover and Rees would have been entitled to an annual amount of approximately $44,417,678 each (based on total GAAP management fees earned by Blue Owl in 2021), which amount would comprise 1.33% of annual management fee revenues of Blue Owl during
the five-year Non-Compete Restricted Period. Under Mr. Zahrs employment agreement, in the event Mr. Zahrs employment had terminated on December 31, 2021 due to (a) a termination
by the Company without cause or (b) a resignation by Mr. Zahr for good reason, Mr. Zahr would have been entitled to approximately $13,522,830 (based on total GAAP management fees earned by Blue Owl in 2021), which amount would
comprise three years of Mr. Zahrs base salary and 0.60% of annual management fee revenues of Blue Owl. Additionally, under the Merger Agreement, Mr. Zahr is entitled to full acceleration of his unsettled first and second Oak Street
Earnout Units in the event of (a) his termination by the Company without cause, (b) a resignation for good reason, or (c) a change in control (such acceleration valued at approximately $339,260,440 for a termination occurring on
December 31, 2021). In accordance with the terms of Mr. Kirshenbaums letter agreement described above, in the event Mr. Kirshenbaums employment had terminated for any reason on December 31, 2021, he would have been
entitled to approximately $1,555,631, which amount comprises one year of Mr. Kirshenbaums base salary and health benefits and a lump sum cash payment of $1 million to be paid upon the one-year
anniversary of such termination.
Pension Benefits
Our NEOs did not participate in or have account balances in qualified or nonqualified defined benefit plans sponsored by us. Our Board or
Management Committee may elect to adopt qualified or nonqualified benefit plans in the future if it determines that doing so is in our best interest.
Nonqualified Deferred Compensation
Our
NEOs did not participate in or have account balances in nonqualified defined contribution plans or other nonqualified deferred compensation plans maintained by us. The Board or the Management Committee may elect to provide our NEOs and other
employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interest.
Compensation of Our Directors
Each
director who is not an employee of any entity related to Blue Owl (independent directors) receives an annual cash retainer of $150,000 per year for service as a member of the Board, as well as an annual equity grant of restricted stock
units equal to $100,000, which fully vest one year following the date of grant, subject to the Board members continued service on our Board. Members of the audit committee (other than its chair) are entitled to receive an additional cash
retainer of $25,000 per year for committee service, and the chair of the audit committee is entitled to receive an additional cash retainer of $50,000 for Iris or her committee service.
During 2021, each independent director received an equity grant pursuant to the Blue Owl Capital Inc. 2021 Equity Incentive Plan of 10,000
RSUs, each of which represents the right to receive one Class A Share upon vesting. Each of these, with certain limited exceptions, vests on May 19, 2022.
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We also reimburse independent directors for reasonable out-of-pocket expenses incurred in
connection with the performance of their duties as directors, including travel expenses in connection with their attendance in-person at Board and committee meetings. Directors who are employees of or provide services to (other than
as a director) any entity related to Blue Owl Capital Inc. did not receive any compensation for their services as directors.
The Board periodically reviews the compensation of the independent directors in order to ensure the appropriateness of the compensation
program.
Directors Compensation Table
The following table contains information concerning the compensation of the non-employee directors in 2021.
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Name |
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Fees Earned or Paid in Cash ($) |
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Stock Awards ($)(1)(2) |
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All Other Compensation ($) |
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Total ($) |
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Stacy Polley |
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175.000 |
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170.800 |
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345.800 |
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Claudia A. Holz |
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200.000 |
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170.000 |
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370.800 |
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Dana Weeks |
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175.000 |
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170.000 |
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|
|
|
|
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345.800 |
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(1) |
On November 4, 2021, Mmes. Polley, Holz, and Weeks each received equity grants of 10,000 RSUs pursuant to
the Blue Owl, Inc. 2021 Equity Incentive Plan, each of which vests, with certain limited exceptions, on May 19, 2022. Amounts in this column represent the grant date fair value of restricted units in respect of our Class A Shares computed
in accordance with ASC Topic 718. See Note 8 to our Financial Statements. |
(1) |
As of December 31, 2021, the aggregate number of stock awards held by each of our non-employee directors
was as follows: Ms. Polley: 10,000; Ms. Holz: 10,000; Ms. Weeks: 10,000. |
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DESCRIPTION OF SECURITIES
The following summary of certain provisions of Blue Owls securities does not purport to be complete and is subject to our certificate of
incorporation, our bylaws, the Investor Rights Agreement and the provisions of applicable law.
Authorized Capitalization
General
Our certificate of
incorporation authorizes the issuance of 4,906,875,000 shares of capital stock, par value $0.0001 per share, of Blue Owl, consisting of:
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2,500,000,000 Class A Shares, |
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350,000,000 Class B Shares, |
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1,500,000,000 Class C Shares, |
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350,000,000 Class D Shares, |
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100,000,000 Class E Shares, which consists of 50,000,000 Series E-1
Shares and 50,000,000 Series E-2 Shares; and |
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100,000,000 shares of preferred stock. |
On July 21, 2021, all shares of our Class E-1 common stock automatically converted into
Class A Shares and all of our Class E-1 Seller Earnout Units converted into Common Units with the holders thereof receiving an equal number of Class C Shares or Class D Shares, as
applicable, following the occurrence of a Triggering Event.
On November 3, 2021, all shares of our
Class E-2 common stock automatically converted into Class A Shares and all of our Class E-2 Seller Earnout Units converted into Common Units with the
holders thereof receiving an equal number of Class C Shares or Class D Shares, as applicable, following the occurrence of a Triggering Event.
As of April 20, 2022, we had: (i) 407,639,908 Class A Shares outstanding, (ii) zero Class B Shares outstanding,
(iii) 670,147,025 Class C Shares outstanding and (iv) 319,132,127 Class D Shares outstanding.
The following summary
describes all material provisions of our securities. We urge you to read our certificate of incorporation, our bylaws, the Investor Rights Agreement and the provisions of applicable law.
Common Stock
Class A Shares
Voting rights. Each holder of Class A Shares is entitled to one vote for each Class A Share held of record by such holder on
all matters on which stockholders generally are entitled to vote. Holders of Class A Shares vote together with the holders of Class B Shares, Class C Shares and Class D Shares as a single class on all matters presented to the
Companys stockholders for their vote or approval. Generally, subject to the Investor Rights Agreement, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the
votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Given the super-voting rights of the Class B Shares and the Class D Shares, the voting power of the
Class A Shares is less than the voting power typically associated with shares of common stock or that the one vote per share implies.
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Stockholders do not have the ability to cumulate votes for the election of directors. Our
certificate of incorporation provides for a classified board of directors consisting of three classes of approximately equal size, each serving staggered three-year terms. Only one class of directors will be elected at each annual meeting of our
stockholders, with the other classes continuing for the remainder of their respective three-year terms.
Notwithstanding the foregoing, to
the fullest extent permitted by law, holders of common stock, as such, have no voting power with respect to, and are not entitled to vote on, any amendment to the certificate of
incorporation (including any certificate of designations relating to any series of preferred stock) that relates solely to the terms of one or more outstanding
series of preferred stock, if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the certificate of incorporation (including any certificate
of designations relating to any series of preferred stock) or pursuant to the DGCL.
Dividend Rights. Subject to preferences that
may be applicable to any outstanding preferred stock, the holders of Class A Shares are entitled to receive, ratably with other Participating Shares, such dividends, if any, as may be declared from time to time by the Board out of funds legally
available therefor.
Rights upon liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Companys affairs, the holders of Class A Shares are entitled to share ratably with the other Participating Shares in all assets remaining after payment of the Companys debts and other liabilities, subject to prior
distribution rights of preferred stock or any class or series of stock having a preference over the Class A Shares, then outstanding, if any.
Other rights. Except as provided in the Investor Rights Agreement (as applicable), the holders of Class A Shares have no
preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A Shares. The rights, preferences and privileges of holders of the Class A Shares are subject to those
of the holders of any shares of the preferred stock the Company may issue in the future and to the Investor Rights Agreement, as applicable.
Subject to the transfer and exchange restrictions set forth in the Blue Owl Limited Partnership Agreements and the Exchange Agreement, holders
of Common Units may exchange these units for Class A Shares or Class B Shares, depending on the holder, on a one-for-one basis or, at the election of an
exchange committee of Blue Owl GP, for cash. When a Common Unit is exchanged, a corresponding Class C Share or Class D Share, depending on the holder, will automatically be transferred to us and retired for no consideration.
Class B Shares
All
Class B Shares are fully paid and non-assessable. There is no trading market for the Class B Shares.
Voting Rights. Prior to the Sunset Date (as defined below), holders of Class B Shares will be entitled to the B/D Voting Power (as
defined below) for all matters submitted to a vote of stockholders. Holders of Class B Shares vote together with holders of Class A Shares, Class C Shares and Class D Shares as a single class on all matters presented to the
Companys stockholders for their vote or approval, except as otherwise required by our certificate of incorporation and applicable law.
Dividend Rights. Subject to preferences that may be applicable to any outstanding shares of preferred stock, the holders of
Class B Shares are entitled to receive, ratably with other Participating Shares, such dividends, if any, as may be declared from time to time by the Board out of funds legally available therefor.
Rights upon liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Companys
affairs, the holders of Class B Shares will be entitled to share, ratably with the other Participating Shares, in all assets remaining after payment of the Companys debts and other liabilities, subject to prior distribution rights of
preferred stock or any class or series of stock having a preference over the Class B Shares, then outstanding, if any.
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Other rights. The holders of Class B Shares have no preemptive or other
subscription rights. The rights, preferences and privileges of holders of the Class B Shares are subject to those of the holders of any shares of the preferred stock the Company may issue in the future and to the Investor Rights Agreement, as
applicable.
Subject to the transfer and exchange restrictions set forth in the Blue Owl Limited Partnership Agreements and the Exchange
Agreement, holders of Common Units may exchange these units for Class A or Class B Shares, depending on the holder, on a one-for-one basis or, at the election
of an exchange committee of Blue Owl GP, for cash. When a Common Unit is exchanged, a corresponding Class C Share or Class D Share, depending on the holder, will automatically be transferred to us and retired for no consideration.
Issuance and Conversion of Class B Shares. There will be no further issuances of Class B Shares except in
connection with (i) a stock split, stock dividend, reclassification or similar transaction or (ii) an exchange of Common Units by a holder of Class D Shares (as contemplated by the preceding paragraph).
Class C Shares
All
Class C Shares are fully paid and non-assessable. There is no trading market for the Class C Shares.
Voting Rights. Holders of our Class C Shares are entitled to one vote for each share held of record on all matters submitted to a
vote of stockholders. Holders of Class C Shares vote together with holders of Class A Shares, Class B Shares and Class D Shares as a single class on all matters presented to the Companys stockholders for their vote or
approval, except as otherwise required by our certificate of incorporation and applicable law. Given the super-voting rights of the Class B Shares and the Class D Shares, the voting power of the Class C Shares is less than
the voting power typically associated with shares of common stock or that the one vote per share implies.
Dividend
Rights. Holders of the Class C Shares are not entitled to dividends in respect of their Class C Shares.
Rights upon
liquidation. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences,
if any, the holders of our Class C Shares will be entitled to receive out of our remaining assets available for distribution only the par value of the Class C Shares held by them, pro rata with distributions to the other Participating
Shares. Notwithstanding this right, upon liquidation, dissolution or winding up, given the de minimis value to which holders of such shares are entitled, we refer to them as vote-only shares.
Other rights. Except as provided in the Investor Rights Agreement (as applicable), the holders of Class C Shares have no
preemptive or other subscription rights. The rights, preferences and privileges of holders of the Class C Shares are subject to those of the holders of any shares of the preferred stock the Company may issue in the future and to the Investor
Rights Agreement, as applicable.
Issuance and Transfer. There will be no further issuances of Class C Shares except in
connection with (i) a stock split, stock dividend, reclassification or similar transaction, (ii) an issuance of Common Units and (iii) an Oak Street Triggering Event occurring with respect to an Oak Street Earnout Unit. When a Common
Unit is exchanged pursuant to the Exchange Agreement, a corresponding Class C Share or Class D Share, as applicable, will automatically be transferred to us and retired for no consideration. Class C Shares are not transferable unless
a corresponding number of Common Units are simultaneously transferred to the same person.
Class D Shares
All Class D Shares are fully paid and non-assessable. There is no trading market for the
Class D Shares.
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Voting Rights. Prior to the Sunset Date (as defined below), holders of Class D
Shares will be entitled to the B/D Voting Power (as defined below) for all matters submitted to a vote of stockholders. Holders of Class D Shares vote together with holders of Class A Shares, Class B Shares and Class C Shares as
a single class on all matters presented to the Companys stockholders for their vote or approval, except as otherwise required by our certificate of incorporation and applicable law.
Dividend Rights. Holders of the Class D Shares are not entitled to dividends in respect of their Class D Shares.
Rights upon liquidation. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in
full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our Class D Shares will be entitled to receive out of our remaining assets available for
distribution only the par value of the Class D Shares held by them, pro rata with distributions to the other Participating Shares. Notwithstanding this right, upon liquidation, dissolution or winding up, given the de minimis value to which
holders of such shares are entitled, we refer to them as vote-only shares.
Other rights. The holders of Class D
Shares have no preemptive or other subscription rights. The rights, preferences and privileges of holders of the Class D Shares will be subject to those of the holders of any shares of the preferred stock the Company may issue in the future and
to the Investor Rights Agreement, as applicable.
Issuance, Conversion and Transfer. There will be no further issuances of
Class D Shares except in connection with (i) a stock split, stock dividend, reclassification or similar transaction or (ii) an issuance of Common Units. When a Common Unit is exchanged pursuant to the Exchange Agreement, a
corresponding Class C Share or Class D Share, as applicable, will automatically be transferred to us and retired for no consideration. Class D Shares are not transferable unless a corresponding number of Common Units are
simultaneously transferred to the same person.
Preferred Stock
Our certificate of incorporation authorizes the Board to establish one or more series of preferred stock in one or more classes or series and
to fix the rights, preferences, privileges and related restrictions, including dividend rights, dividend rates, conversion rights, voting rights, the right to elect directors, terms of redemption, redemption prices, liquidation preferences and the
number of shares constituting any class or series, or the designation of the class or series, without the approval of our stockholders.
The authority of the Board to issue preferred stock without approval of our stockholders may have the effect of delaying, deferring or
preventing a change in control of our company and may adversely affect the voting and other rights of the holders of our common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the
holders of our common stock, including the loss of voting control to others. As a result of these or other factors, the issuance of preferred stock could have an adverse impact on the market price of the Class A Shares. At present, we have no
plans to issue any preferred stock.
Authorized but Unissued Capital Stock
Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of The New York
Stock Exchange, which would apply so long as the Class A Shares remains listed on the New York Stock Exchange, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding
number of Class A Shares. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.
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One of the effects of the existence of unissued and unreserved common stock or preferred
stock may be to enable the Board to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or
otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices.
Anti-Takeover Effects of Provisions of Delaware Law and our certificate of incorporation and Bylaws
Certain provisions of our certificate of incorporation and bylaws could discourage potential acquisition proposals and could delay or prevent a
change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of the Board and in the policies formulated by the Board and to discourage certain types of transactions that may involve an
actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal or proxy fight. Such provisions could have the effect of discouraging others from making tender offers for our
shares and, as a consequence, they also may inhibit fluctuations in the market price of our Class A Shares that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our
management or delaying or preventing a transaction that might benefit you or other minority stockholders.
These provisions include:
Super Voting Stock. The shares of common stock vote together on all matters on which stockholders are entitled to vote, except
as set forth in our certificate of incorporation or required by applicable law. However, prior to the Sunset Date, the Class B Shares and Class D Shares collectively have 80% of the voting power of the common stock, as calculated pursuant
to the definition of B/D Voting Power above. Consequently, the holders of our Class B Shares and Class D Shares (which will be, directly or indirectly, the Owl Rock Principals and the Dyal Principals), have greater influence
over decisions to be made by our stockholders, including the election of directors.
Action by Written Consent; Special Meetings of
Stockholders. The DGCL permits stockholder action by written consent unless otherwise provided by our certificate of incorporation. Our certificate of incorporation permits stockholder action by written consent so long as any Class B
Shares or Class D Shares are outstanding (and inherently would represent at least a majority of the voting power of our outstanding common stock), and precludes stockholder action by written consent if and when there ceases to be any
Class B Shares or Class D Shares outstanding. If permitted by the applicable certificate of designation, future series of preferred stock may take action by written consent. Our certificate of incorporation and bylaws provide that special
meetings of stockholders may be called only by the Board, the chairman of the Board of the chief executive officer, and only proposals included in our notice may be considered at such special meetings.
Election and Removal of Directors. The DGCL provides that stockholders are not entitled to the right to cumulate votes in the
election of directors unless our certificate of incorporation provides otherwise. Our certificate of incorporation does not expressly provide for cumulative voting. Directors may be removed, but only for cause (and subject to the Investor Rights
Agreement), upon the affirmative vote of holders of a majority of the voting power of the outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class. In addition, the
certificate of designation pursuant to which a particular series of preferred stock is issued may provide holders of that series of preferred stock with the right to elect additional directors. In addition, under our certificate of incorporation,
the Board is divided into three classes of directors, each of which will hold office for a three-year term. The existence of a classified board could delay a successful tender offeror from obtaining majority control of the Board, and the prospect of
that delay might deter a potential offeror.
Authorized but Unissued Shares. The authorized but unissued shares of
common stock and preferred stock are available for future issuance without stockholder approval, subject to any limitations imposed by the listing
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rules of The New York Stock Exchange. The existence of authorized but unissued and unreserved common stock and preferred stock could make more difficult or discourage an attempt to obtain control
of us by means of a proxy contest, tender offer, merger or otherwise. See Description of SecuritiesPreferred Stock and Description of SecuritiesAuthorized but Unissued Capital Stock
above.
Business Combinations with Interested Stockholders. In general, Section 203 of the DGCL, an anti- takeover law,
prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporations voting stock, which person or group is considered an interested stockholder
under the DGCL, for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved
in a prescribed manner.
We elected in our certificate of incorporation not to be subject to Section 203.
Other Limitations on Stockholder Actions. Our bylaws also impose some procedural requirements on stockholders who wish to:
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make nominations in the election of directors; |
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propose that a director be removed; or |
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propose any other business to be brought before an annual or special meeting of stockholders.
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Under these procedural requirements, in order to bring a proposal before a meeting of stockholders, a stockholder must
deliver timely notice of a proposal pertaining to a proper subject for presentation at the meeting to our corporate secretary containing, among other things, the following:
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the stockholders name and address; |
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the number of shares beneficially owned by the stockholder and evidence of such ownership; |
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the names of all persons with whom the stockholder is acting in concert and a description of all arrangements and
understandings with those persons; |
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a description of any agreement, arrangement or understanding reached with respect to shares of our stock, such as
borrowed or loaned shares, short positions, hedging or similar transactions; |
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a description of the business or nomination to be brought before the meeting and the reasons for conducting such
business at the meeting; and |
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any material interest of the stockholder in such business. |
Our bylaws set out the timeliness requirements for delivery of notice.
In order to submit a nomination for the Board, a stockholder must also submit any information with respect to the nominee that we would be
required to include in a proxy statement, as well as some other information. If a stockholder fails to follow the required procedures, the stockholders proposal or nominee will be ineligible and will not be voted on by our stockholders.
Certain provisions of the Blue Owl Limited Partnership Agreements could have the effect of deterring or facilitating a control transaction.
Limitations on Liability and Indemnification of Officers and Directors
Our certificate of incorporation and bylaws provide indemnification for our directors and officers to the fullest extent permitted by the DGCL.
We entered into indemnification agreements with each of our directors and executive officers that may, in some cases, be broader than the specific indemnification provisions contained
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under Delaware law. In addition, as permitted by Delaware law, our certificate of incorporation includes provisions that eliminate the personal liability of our directors for monetary damages
resulting from breaches of certain fiduciary duties as a director. The effect of this provision is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of fiduciary
duties as a director, except that a director will be personally liable for:
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any breach of his duty of loyalty to us or our stockholders; |
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acts or omissions not in good faith, or which involve intentional misconduct or a knowing violation of law;
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unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of
the DGCL; or |
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any transaction from which the director derived an improper personal benefit. |
These provisions may be held not to be enforceable for violations of the federal securities laws of the United States.
Approval of Certain Matters
As long as
Neuberger holds at least (x) 10% of the fully-diluted Class A Shares (assuming an exchange of all Common Units immediately prior to the time of determination) and (y) 50% of such equity interests held by Neuberger as of May 19, 2021,
Neubergers approval is required for the following (subject to agreed-upon carve-outs and exceptions):
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amendment of organizational documents that are disproportionately adverse to Neuberger, as an equityholder;
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creation of new employee equity incentive plans or amendments to existing employee equity incentive plans,
including by expansion of pool sizes; |
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dividends and stock repurchases beyond an approved policy or on a non-pro
rata basis; |
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acquisitions/investments in excess of $2 billion and 20% of the total value of Blue Owls outstanding
Class A Shares (subject to certain walls, conflicts of interest and confidentiality requirements) (assuming an exchange of all Common Units immediately prior to the time of determination); |
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amendments to make less restrictive the restrictive covenant arrangements of any Key Individual;
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material related-party agreements or transactions between Blue Owl and the former Owl Rock or Dyal Principals (or
amendments thereto); |
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entering into a new business line that subjects Neuberger to a new regulatory regime; |
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for three years after May 19, 2021, the merger or sale of all or a majority of Blue Owls common stock
or Common Units or assets at a valuation below $13.50 per Class A Share and Class B Share (assuming an exchange of all Common Units immediately prior to the time of determination); and |
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for five years after May 19, 2021, for any issuance of equity securities that are dilutive to Blue Owl or
its subsidiaries to any Key Individual under any employee equity incentive plan, other than as part of a broad-based compensation program generally applicable to employees of Blue Owl or its subsidiaries (and subject to certain further limitations
under such broad-based program). |
As long as Neuberger holds at least (x) 5% of the fully-diluted Class A Shares
(assuming an exchange of all Common Units immediately prior to the time of determination) and (y) 25% of such equity interests held by Neuberger as of May 19, 2021, Neubergers approval is required for the following (subject to agreed-upon
carve-outs and exceptions):
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annual aggregate cash compensation for the Key Individuals that exceeds 4% of the management fee revenue of Blue
Owl and its subsidiaries; and |
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Blue Owl Carrys aggregate share of carried interest in any private equity-style fund sponsored by Blue Owl
or its subsidiaries to be less than 15% of the total carried interest in such fund (in each case net of certain investor and other third party arrangements). |
Exclusive Forum
Our certificate of
incorporation provides that, unless the Company consents in writing to the selection of an alternative forum, (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a
fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of the Company to the Company or the Companys stockholders, or any claim for aiding and abetting such alleged breach, (iii) any action
asserting a claim against the Company or any current or former director, officer, other employee, agent or stockholder of the Company (a) arising pursuant to any provision of the DGCL, our certificate of incorporation (as it may be amended or
restated) or our bylaws or (b) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery or (iv) any action asserting a claim against the Company or any current or former director, officer, other employee, agent or
stockholder of the Company governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (i) through (iv), to the fullest extent permitted by law, be solely and exclusively
brought in the Delaware Court of Chancery; provided, however, that the foregoing shall not apply to any claim (a) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the
Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (b) which is vested in the exclusive jurisdiction of a court or forum other
than the Delaware Court of Chancery, or (c) arising under federal securities laws, including the Securities Act of 1933, as amended, as to which the federal district courts of the United States of America shall, to the fullest extent permitted
by law, be the sole and exclusive forum. Notwithstanding the foregoing, the provisions of Article XIII of our certificate of incorporation will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other
claim for which the federal district courts of the United States of America shall be the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any shares of the Companys capital stock shall be deemed
to have notice of and to have consented to the forum provisions in our certificate of incorporation. If any action the subject matter of which is within the scope of the forum provisions is filed in a court other than a court located within the
State of Delaware (a foreign action) in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in
connection with any action brought in any such court to enforce the forum provisions (an enforcement action); and (y) having service of process made upon such stockholder in any such enforcement action by service upon such
stockholders counsel in the foreign action as agent for such stockholder. However, it is possible that a court could find the Companys forum selection provisions to be inapplicable or unenforceable. Although the Company believes this
provision benefits it by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against the Companys directors, officers and
other employees.
Stockholder Registration Rights
The Investor Rights Agreement provides the former Owl Rock Equityholders and the former Dyal Equityholders with certain registration rights
whereby, at any time, subject to certain lockup restrictions and the other terms and conditions of the Investor Rights Agreement, they have the right to require us to register under the Securities Act certain Registrable Securities (as defined in
the Investor Rights Agreement). The Investor Rights Agreement also provides for piggyback registration rights for certain other parties thereto, subject to certain conditions and exceptions. See Certain Relationships and Related Party
TransactionsBlue Owl Related Person TransactionsInvestor Rights Agreement.
125
Warrants
Public Warrants. Each whole warrant entitles the registered holder to purchase one Class A Share at a price of $11.50
per share, subject to adjustment as discussed below, at any time commencing on the later of one year from the closing of the IPO and 30 days after the completion of the Business Combination, which occurred on May 19, 2021, except as discussed
in the immediately succeeding paragraph. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of Class A Shares. This means only a whole warrant may be exercised at a given time by a warrant
holder. The warrants will expire five years after the completion of the Business Combination, at 5:00 p.m., New York City time, which occurred on May 19, 2021, or earlier upon redemption or liquidation.
We will not be obligated to issue any Class A Shares pursuant to the exercise of a warrant and will have no obligation to settle such
warrant exercise unless the registration statement under the Securities Act with respect to the Class A Shares underlying the warrants is then effective and a prospectus relating thereto is current or a valid exemption from registration is
available. In the event that the conditions in the immediately preceding sentence are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire
worthless.
We have filed with the SEC a registration statement for the registration, under the Securities Act, of the warrants and the
Class A Shares issuable upon exercise of the warrants. We will use our commercially reasonable efforts to maintain the effectiveness of such registration statement and a current prospectus relating to those warrants and underlying shares of
Class A Shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if our shares of Class A Shares are not listed on a national securities exchange at the time of any exercise of a warrant such
that they satisfy the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in
accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonably efforts to register or qualify the
shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A Shares issuable upon exercise of the warrants is not effective by the 60th day after the Closing, warrant
holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with
Section 3(a)(9) of the Securities Act or another exemption, but we will use our commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each
holder would pay the exercise price by surrendering the warrants for that number of Class A Shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A Shares underlying the
warrants, multiplied by the excess of the fair market value (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361 per warrant. The fair market value as used in this paragraph
shall mean the volume weighted average price of the Class A Shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when the price per Class A Share equals or exceeds $18.00.
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement
warrants):
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in whole and not in part; |
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at a price of $0.01 per warrant; |
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upon a minimum of 30 days prior written notice of redemption to each warrant holder; and
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if, and only if, the reported last sale price of the Class A Shares equals or exceeds $18.00 per share (as
adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a |
126
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warrant as described under the heading WarrantsPublic Stockholders Warrants-Anti-Dilution Adjustments) on the trading day prior to the date on which we send
the notice of redemption to the warrant holders. |
We will not redeem the warrants as described above unless a
registration statement under the Securities Act covering the issuance of the Class A Shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A Shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable
state securities laws.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there
is a significant premium to the warrant exercise price at the time of the call. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise such holders
warrants prior to the scheduled redemption date. Any such exercise would not be done on a cashless basis and would require the exercising warrant holder to pay the exercise price for each warrant being exercised. However, the price of
the Class A Shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading
WarrantsPublic Stockholders WarrantsAnti-dilution Adjustments) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption of warrants when the price per Class A Share equals or exceeds $10.00.
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement
warrants):
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in whole and not in part; |
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at $0.10 per warrant upon a minimum of 30 days prior written notice of redemption provided that
holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the fair market value of our
Class A Shares except as otherwise described below; and |
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if, and only if, the last sale price of our Class A Shares equals or exceeds $10.00 per public share (as
adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Warrants-Public Stockholders Warrants-Anti-Dilution Adjustments) on the trading
day prior to the date on which we send the notice of redemption to the warrant holders. |
Beginning on the date the
notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of Class A Shares that a warrant holder will
receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based on the fair market value of our Class A Shares on the corresponding redemption date (assuming holders elect to
exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of our Class A Shares for the 10 trading days ending on the third trading day prior to the
date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our
warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
Pursuant to the warrant agreement, references above to Class A Shares shall include a security other than Class A Shares into which
the Class A Shares have been converted or exchanged for in the event of a merger or consolidation of the Company with or into another corporation in which the Company is not the surviving
127
company. The numbers in the table below will not be adjusted when determining the number of Class A Shares to be issued upon exercise of the warrants if we are not the surviving entity
following any such transaction.
The share prices set forth in the column headings of the table below will be adjusted as of any date on
which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading Anti-dilution Adjustments below. If the number of shares issuable upon exercise of
a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the exercise price of the warrant after such adjustment and
the denominator of which is the price of the warrant immediately prior to such adjustment. In such an event, the number of shares in the table below shall be adjusted by multiplying such share amounts by a fraction, the numerator of which is the
number of shares issuable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares issuable upon exercise of a warrant as so adjusted. If the exercise price of a warrant is adjusted,
(a) in the case of an adjustment pursuant to the fifth paragraph under the heading Anti-dilution Adjustments below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a
fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading Anti-dilution Adjustments and the denominator of which is $10.00 and (b) in the case of an
adjustment pursuant to the second paragraph under the heading Anti-dilution Adjustments below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price
of a warrant pursuant to such exercise price adjustment.
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Redemption Date |
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Fair Market Value of Class A Shares |
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(period to expiration of warrants) |
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≤$10.00 |
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$11.00 |
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$12.00 |
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$13.00 |
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$14.00 |
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$15.00 |
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$16.00 |
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$17.00 |
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≥$18.00 |
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60 months |
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0.261 |
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0.281 |
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0.297 |
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0.311 |
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0.324 |
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0.337 |
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0.348 |
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0.358 |
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0.361 |
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57 months |
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0.257 |
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0.277 |
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0.294 |
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0.310 |
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0.324 |
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0.337 |
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0.348 |
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0.358 |
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0.361 |
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54 months |
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0.252 |
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0.272 |
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0.291 |
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0.307 |
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0.322 |
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0.335 |
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0.347 |
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0.357 |
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0.361 |
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51 months |
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|
0.246 |
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0.268 |
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|
0.287 |
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0.304 |
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0.320 |
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0.333 |
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0.346 |
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0.357 |
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0.361 |
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48 months |
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|
0.241 |
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0.263 |
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|
0.283 |
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|
0.301 |
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|
|
0.317 |
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|
0.332 |
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|
|
0.344 |
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0.356 |
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0.361 |
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45 months |
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|
0.235 |
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|
0.258 |
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|
0.279 |
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|
0.298 |
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|
0.315 |
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0.330 |
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|
0.343 |
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0.356 |
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0.361 |
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42 months |
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|
0.228 |
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|
0.252 |
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|
|
0.274 |
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|
0.294 |
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|
0.312 |
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0.328 |
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|
0.342 |
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|
0.355 |
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0.361 |
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39 months |
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|
0.221 |
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|
0.246 |
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|
0.269 |
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0.290 |
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|
|
0.309 |
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0.325 |
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|
|
0.340 |
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|
0.354 |
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0.361 |
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36 months |
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|
0.213 |
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|
0.239 |
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|
0.263 |
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|
|
0.285 |
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|
|
0.305 |
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|
0.323 |
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|
|
0.339 |
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|
0.353 |
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0.361 |
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33 months |
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|
0.205 |
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|
0.232 |
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|
|
0.257 |
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|
|
0.280 |
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|
|
0.301 |
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|
|
0.320 |
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|
|
0.337 |
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|
|
0.352 |
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|
|
0.361 |
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30 months |
|
|
0.196 |
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|
|
0.224 |
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|
|
0.250 |
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|
|
0.274 |
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|
|
0.297 |
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|
|
0.316 |
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|
|
0.335 |
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|
|
0.351 |
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|
|
0.361 |
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27 months |
|
|
0.185 |
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|
|
0.214 |
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|
|
0.242 |
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|
|
0.268 |
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|
|
0.291 |
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|
|
0.313 |
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|
|
0.332 |
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|
|
0.350 |
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|
|
0.361 |
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24 months |
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|
0.173 |
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|
|
0.204 |
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|
|
0.233 |
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|
|
0.260 |
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|
|
0.285 |
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|
|
0.308 |
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|
|
0.329 |
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|
|
0.348 |
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|
0.361 |
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21 months |
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|
0.161 |
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|
|
0.193 |
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|
|
0.223 |
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|
|
0.252 |
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|
|
0.279 |
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|
|
0.304 |
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|
|
0.326 |
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|
|
0.347 |
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|
|
0.361 |
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18 months |
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|
0.146 |
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|
|
0.179 |
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|
|
0.211 |
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|
|
0.242 |
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|
|
0.271 |
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|
|
0.298 |
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|
|
0.322 |
|
|
|
0.345 |
|
|
|
0.361 |
|
15 months |
|
|
0.130 |
|
|
|
0.164 |
|
|
|
0.197 |
|
|
|
0.230 |
|
|
|
0.262 |
|
|
|
0.291 |
|
|
|
0.317 |
|
|
|
0.342 |
|
|
|
0.361 |
|
12 months |
|
|
0.111 |
|
|
|
0.146 |
|
|
|
0.181 |
|
|
|
0.216 |
|
|
|
0.250 |
|
|
|
0.282 |
|
|
|
0.312 |
|
|
|
0.339 |
|
|
|
0.361 |
|
9 months |
|
|
0.090 |
|
|
|
0.125 |
|
|
|
0.162 |
|
|
|
0.199 |
|
|
|
0.237 |
|
|
|
0.272 |
|
|
|
0.305 |
|
|
|
0.336 |
|
|
|
0.361 |
|
6 months |
|
|
0.065 |
|
|
|
0.099 |
|
|
|
0.137 |
|
|
|
0.178 |
|
|
|
0.219 |
|
|
|
0.259 |
|
|
|
0.296 |
|
|
|
0.331 |
|
|
|
0.361 |
|
3 months |
|
|
0.034 |
|
|
|
0.065 |
|
|
|
0.104 |
|
|
|
0.150 |
|
|
|
0.197 |
|
|
|
0.243 |
|
|
|
0.286 |
|
|
|
0.326 |
|
|
|
0.361 |
|
0 months |
|
|
|
|
|
|
|
|
|
|
0.042 |
|
|
|
0.115 |
|
|
|
0.179 |
|
|
|
0.233 |
|
|
|
0.281 |
|
|
|
0.323 |
|
|
|
0.361 |
|
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the
fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of Class A Shares to be issued for each warrant exercised will be determined by a straight-line interpolation
between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the
volume weighted average price of our Class A Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, and
128
at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 Class A Shares for
each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of our Class A Shares for the 10 trading days ending on the third trading day
prior to the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption
feature, exercise their warrants for 0.298 Class A Shares for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Class A Shares per warrant
(subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature,
since they will not be exercisable for any Class A Shares.
This redemption feature differs from the typical warrant redemption
features used in many other blank check offerings, which typically only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Class A Shares exceeds $18.00 per share for a
specified period of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the Class A Shares are trading at or above $10.00 per public share, which may be at a time when the trading price
of our Class A Shares is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set
forth above under Redemption of warrants when the price per Class A Share equals or exceeds $18.00. Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature
will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of this prospectus. This redemption right provides us with an additional mechanism by which to redeem all of the
outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed. We will be required to pay the applicable redemption price to warrant holders if
we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would redeem the warrants in this manner when we believe it is in
our best interest to update our capital structure to remove the warrants and pay the redemption price to the warrant holders.
As stated
above, we can redeem the warrants when the Class A Shares are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while
providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If we choose to redeem the warrants when the Class A Shares are trading at a price below the exercise price of
the warrants, this could result in the warrant holders receiving fewer Class A Shares than they would have received if they had chosen to wait to exercise their warrants if and when our Class A Shares were trading at a price higher than
the exercise price of $11.50.
No fractional Class A Shares will be issued upon exercise. If, upon exercise, a holder would be
entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of Class A Shares to be issued to the holder.
Redemption procedures.
A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right
to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such persons affiliates), to the warrant agents actual knowledge, would beneficially own in excess of 9.8% (or such other
amount as a holder may specify) of the total number of Class A Shares issued and outstanding immediately after giving effect to such exercise.
129
Anti-dilution Adjustments.
If the number of outstanding Class A Shares is increased by a capitalization or share dividend payable in Class A Shares, or stock
split or other similar event, then, on the effective date of such capitalization or share dividend, split-up or similar event, the number of Class A Shares issuable on exercise of each warrant will be
increased in proportion to such increase in the outstanding Class A Shares. A rights offering made to all or substantially all holders of Class A Shares entitling holders to purchase Class A Shares at a price less than the
historical fair market value (as defined below) will be deemed a share dividend of a number of Class A Shares equal to the product of (i) the number of Class A Shares actually sold in such rights offering (or issuable
under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A Shares) and (ii) one minus the quotient of (x) the price per Class A Share paid in such rights offering and
(y) the historical fair market value. For these purposes, (i) if the rights offering is for securities convertible into or exercisable for Class A Shares, in determining the price payable for Class A Shares, there will be taken
into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) historical fair market value means the volume weighted average price of Class A Shares as
reported during the 10 trading day period ending on the trading day prior to the first date on which the Class A Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or
other assets to all or substantially all of the holders of Class A Shares on account of such Class A Shares, other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share
basis with all other cash dividends and cash distributions paid on the Class A Shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as
adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Class A Shares issuable on exercise of each warrant) but only
with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of Class A Shares, or (d) in connection with the distribution
of the Companys assets upon its liquidation, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets
paid on each Class A Share in respect of such event.
If the number of outstanding Class A Shares is decreased by a
consolidation, combination, reverse share sub-division or reclassification of Class A Shares or other similar event, then, on the effective date of such consolidation, combination, reverse share sub-division, reclassification or similar event, the number of Class A Shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding Class A Shares.
Whenever the number of Class A Shares purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise
price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Class A Shares purchasable upon the exercise of the warrants immediately
prior to such adjustment and (y) the denominator of which will be the number of Class A Shares so purchasable immediately thereafter.
In case of any reclassification or reorganization of the outstanding Class A Shares (other than those described above or that solely
affects the par value of such Class A Shares), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any
reclassification or reorganization of our outstanding Class A Shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection
with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and
130
conditions specified in the warrants and in lieu of the Class A Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and
amount of of Class A Shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the
warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable
upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in
such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the Company if provided for in
the Companys organizational documents) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2
under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50%
of the issued and outstanding Class A Shares, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant
holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A Shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment
(from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. If less than 70% of the consideration receivable by the holders of Class A Shares in
such a transaction is payable in the form of Class A Shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established
over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the
warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant. The
purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not
receive the full potential value of the warrants.
The warrants are issued in registered form under a warrant agreement with Computershare
Trust Company, N.A. and Computershare, Inc. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of: (i) curing any ambiguity or correcting any mistake, including to
conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in the proxy statement/prospectus, or defective provision (ii) amending the provisions relating to cash
dividends on Class A Shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant
agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants is
required to make any change that adversely affects the interests of the registered holders.
The warrant holders do not have the rights or
privileges of holders of Class A Shares or any voting rights until they exercise their warrants and receive Class A Shares. After the issuance of Class A Shares upon exercise of the warrants, each holder will be entitled to one vote
for each share held of record on all matters to be voted on by stockholders.
We have agreed that, subject to applicable law, any action,
proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we
irrevocably submit to such
131
jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to claims under
the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Private Placement Warrants
Except as described below, the private placement warrants have terms and provisions that are identical to those of the warrants sold as part of
the units in Altimars IPO. The private placement warrants (including the Class A Shares issuable upon exercise of the private placement warrants) are not redeemable by us so long as they are held by Altimar Sponsor or its permitted
transferees. Altimar Sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. If the private placement warrants are held by holders other than Altimar Sponsor or its permitted transferees,
the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units sold in connection with Altimars IPO. Any amendment to the terms of the
private placement warrants or any provision of the warrant agreement with respect to the private placement warrants will require a vote of holders of at least 50% of the number of the then outstanding private placement warrants.
If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering
their warrants for that number of Class A Shares equal to the quotient obtained by dividing (x) the product of the number of Class A Shares underlying the warrants, multiplied by the excess of the Sponsor fair market value
(defined below) over the exercise price of the warrants by (y) Altimar Sponsor fair market value. For these purposes, the Sponsor fair market value shall mean the average reported last sale price of the Class A Shares for the
10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
We have adopted policies that restrict insiders from selling our securities except during specific periods of time. Even during such periods
of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public
stockholders who could exercise their warrants and sell the Class A Shares received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders are significantly restricted from selling such
securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
Transfer Agent, Warrant
Agent and Registrar
The transfer agent and registrar for the Blue Owl common stock and the warrant agent for the warrants is
Computershare Trust Company, N.A and Computershare, Inc.
Listing
Our Class A Shares and our warrants to purchase Class A Shares are listed on The New York Stock Exchange under the symbols
OWL and OWL.WS, respectively.
132
BENEFICIAL OWNERSHIP
The following table sets forth certain information regarding the beneficial ownership of our Class A Shares, Class C Shares and
Class D Shares as of the date hereof based on their reported ownership as of April 20, 2022 with respect to
(i)
each person known by us to beneficially own 5% or more of our outstanding Class A Shares, Class C Shares or our Class D Shares;
(ii) each member of the Board and each NEO; and
(iii) the members of the Board and our NEOs as a group.
Beneficial ownership is determined according to the rules of the Securities and Exchange Commission, which generally provide that a person has
beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Company stock issuable upon
exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof. On May 3, 2022, the aggregate voting power of
the Class B Shares and Class D Shares will change from 90% to 80%, pursuant to the Charter Amendment. See Summary Recent Developments as well as our Current Report on Form 8-K filed with the SEC
on April 11, 2022 and our Information Statement on Schedule 14C filed with the SEC on April 11, 2022. The percentage of total voting power set forth in the table is calculated based on this change.
The following beneficial ownership percentages are based on 407,639,908 Class A Shares, 670,147,025 Class C Shares and 319,132,127
Class D Shares issued and outstanding as of April 20, 2022.
Unless otherwise indicated, the Company believes that each person
named in the table below has sole voting and investment power with respect to all shares of Company common stock beneficially owned by them.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Beneficial Owner(1) |
|
Class A Shares Beneficially Owned(2) |
|
|
Class C Shares Beneficially Owned |
|
|
Class D Shares Beneficially Owned |
|
|
Combined Total Voting Power |
|
|
Shares |
|
|
Percent |
|
|
Shares |
|
|
Percent |
|
|
Shares |
|
|
Percent |
|
Directors and Executive Officers of Blue Owl |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas I. Ostrover(3), |
|
|
|
|
|
|
|
|
|
|
116,540,000 |
|
|
|
17.4 |
% |
|
|
175,392,700 |
|
|
|
55.0 |
% |
|
|
46.1 |
% |
Marc S. Lipschultz(4), |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
* |
|
|
|
* |
|
Michael Rees(5), |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,739,427 |
|
|
|
45.0 |
% |
|
|
36.0 |
% |
Alan J. Kirshenbaum(6), |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
* |
|
|
|
* |
|
Craig W. Packer(7), |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
* |
|
|
|
* |
|
Sean Ward(8), |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
* |
|
|
|
* |
|
Marc Zahr(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dana Weeks(10) |
|
|
10,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Claudia Holz(11) |
|
|
40,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Andrew S. Komaroff |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Laurino(12), |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
* |
|
|
|
* |
|
Andrew Polland(13) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
* |
|
|
|
* |
|
Neena A. Reddy(14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stacy Polley(15) |
|
|
10,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
All Directors and Executive Officers of Blue Owl as a Group (14 Individuals) |
|
|
60,000 |
|
|
|
* |
|
|
|
116,540,000 |
|
|
|
17.4 |
% |
|
|
319,132,127 |
|
|
|
100.0 |
% |
|
|
82.2 |
% |
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Beneficial Owner(1) |
|
Class A Shares Beneficially Owned(2) |
|
|
Class C Shares Beneficially Owned |
|
|
Class D Shares Beneficially Owned |
|
|
Combined Total Voting Power |
|
|
Shares |
|
|
Percent |
|
|
Shares |
|
|
Percent |
|
|
Shares |
|
|
Percent |
|
Five Percent Holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owl Rock Capital Feeder LLC(3)(16), |
|
|
|
|
|
|
|
|
|
|
116,540,000 |
|
|
|
17.4 |
% |
|
|
175,392,700 |
|
|
|
55.0 |
% |
|
|
46.1 |
% |
BB Holdings AA LP and Affiliates(17) |
|
|
50,000,000 |
|
|
|
12.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Dyal Capital SLP LP(18), |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,739,427 |
|
|
|
45.0 |
% |
|
|
36.0 |
% |
NBSH Blue Investments, LLC(19) |
|
|
|
|
|
|
|
|
|
|
444,328,208 |
|
|
|
66.3 |
% |
|
|
|
|
|
|
|
|
|
|
8.2 |
% |
PSPE II Limited(20) |
|
|
49,005,191 |
|
|
|
12.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Quantum Strategic Partners Ltd.(21) |
|
|
19,220,989 |
|
|
|
4.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
MSD Owl Rock Investments, LLC(22) |
|
|
|
|
|
|
|
|
|
|
41,721,673 |
|
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
* |
|
Koch Industries, Inc.(23) |
|
|
35,967,671 |
|
|
|
8.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Capital International Investors(24) |
|
|
22,936,362 |
|
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
The Vanguard Group(25) |
|
|
33,800,460 |
|
|
|
8.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Capital World Investors(26) |
|
|
39,418,038 |
|
|
|
9.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
|
The Principals, Owl Rock Feeder and Dyal Capital SLP LP have agreed to vote the securities reported as
beneficially owned by Owl Rock Feeder and Dyal Capital SLP LP in favor of each others director designees. Such agreement may be deemed to create a group that beneficially owns all of the securities by each of Owl Rock Feeder and Dyal Capital
SLP LP, which holdings would represent 82.2% of the Issuers aggregate voting power. |
(1) |
Unless otherwise noted, the addresses of each of Blue Owls directors, officers and five percent holders
is 399 Park Avenue, 38th Floor, New York, NY 10019. |
(2) |
Does not include (a) 41,453 RSUs granted to Neena Reddy under the Blue Owl Capital Inc. 2021 Omnibus Plan or
(b) Incentive Units issued under the Blue Owl Capital Inc. 2021 Omnibus Plan as follows: (i) Alan Kirshenbaum 1,100,000, (ii) Andrew Polland 818,648, (iii) Neena Reddy 314,263, (iv) Andrew Laurino 1,250,000, (v)
Sean Ward 1,500,000. Each RSU represents the contingent right to receive one Class A Share upon vesting and each Incentive Unit, upon vesting and when settled, will be issued in an equal number of Common Units and either Class C or
Class D Shares as applicable. |
(3) |
Owl Rock Capital Partners LP, as the managing member of Owl Rock Capital Feeder LLC, exercises voting control
over 38,534,736 Class D Shares and an equal number of Common Units on behalf of Mr. Ostrover; 15,727,292 Class D Shares and an equal number of Common Units on behalf of Mr. Ostrovers spouse, Julie J. Ostrover; and
18,087,459 Class D Shares and an equal number of Common Units on behalf of The Douglas I. Ostrover 2016 Descendants Trust over which Mr. Ostrover has sole investment and voting power. Due to certain provisions in the organizational
documents of Owl Rock Capital Partners LP, Mr. Ostrover may be deemed to beneficially own the Class C Shares and Class D Shares and the Common Units held by Owl Rock Capital Feeder LLC. Mr. Ostrover expressly disclaims beneficial
ownership of the shares and units held by Owl Rock Capital Feeder LLC, including any of our Class A Shares or Class B Shares that may be acquired upon exchange of Common Units and Class C Shares or Class D Shares, as applicable,
in each case, except to the extent of his pecuniary interest therein. |
(4) |
Owl Rock Capital Partners LP, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting
control over 23,412,440 Class D Shares and an equal number of Common Units on behalf of Mr. Lipschultz; 24,231,887 Class D Shares and an equal number of Common Units on behalf of Mr. Lipschultzs spouse, Jennifer Lipschultz,
and 11,550,711 Class D Shares and an equal number of Common Units on behalf of the Lipschultz Family OR Trust over which Mr. Lipschultz has sole investment and voting power. Mr. Lipschultz expressly disclaims beneficial ownership of
the Class C Shares and Class D Shares and the Common Units held by Owl Rock Capital Feeder LLC, and any of our Class A Shares or Class B Shares that may be acquired upon exchange of Common Units and Class C Shares or
|
134
|
Class D Shares, as applicable, held by Owl Rock Capital Feeder LLC, in each case, except to the extent of his pecuniary interest therein. |
(5) |
Dyal Capital SLP LP holds 79,472,092 Class D Shares and an equal number of Common Units on behalf of
Mr. Rees, his spouse, or one or more entities controlled by him. The foregoing amounts reflect an estimate and are subject to change. By virtue of Mr. Reess indirect control of the general partner of and his indirect interests in
Dyal Capital SLP LP, Mr. Rees may be deemed to beneficially own the Class D Shares beneficially owned by Dyal Capital SLP LP. Mr. Rees disclaims beneficial ownership of the Class D Shares held by Dyal Capital SLP LP, except to
the extent of his pecuniary interest therein. The business address for each of Mr. Rees and Dyal Capital SLP LP is 1290 Avenue of the Americas, New York, NY 10104. |
(6) |
Owl Rock Capital Partners LP, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting
control over 87,696 Class D Shares and an equal number of Common Units on behalf of Mr. Kirshenbaum; 2,630,891 Class D Shares and an equal number of Common Units on behalf of the Alan Kirshenbaum 2015 Family Trust and 2,455,498
Class D Shares and an equal number of Common Units on behalf of Kirshenbaum 2019 Family Trust, in each case, over which Mr. Kirshenbaum has sole investment and voting power. In addition, Blue Owl MV holds 1,100,000 Incentive Units on
behalf of Mr. Kirshenbaum. Mr. Kirshenbaum expressly disclaims beneficial ownership of the Class C Shares and Class D Shares and the Common Units held by or issuable to Owl Rock Capital Feeder LLC and Blue Owl MV, as applicable,
and any of our Class A Shares or Class B Shares that may be acquired upon exchange of Common Units and Class C Shares or Class D Shares, as applicable, held by or issuable to Owl Rock Capital Feeder LLC and Blue Owl MV, in each
case, except to the extent of his pecuniary interest therein. |
(7) |
Owl Rock Capital Partners LP, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting
control over 25,598,731 Class D Shares and an equal number of Common Units on behalf of Mr. Packer; 4,393,421 Class D Shares and an equal number of Common Units on behalf of Packer Family Trust 2017, over which Mr. Packer has
sole investment and voting power; and 5,086,388 Class D Shares and an equal number of Common Units on behalf of Mr. Packers spouse, Suzanne Packer. Mr. Packer expressly disclaims beneficial ownership of the Class C Shares
and Class D Shares and the Common Units held by Owl Rock Capital Feeder LLC, and any of our Class A Shares or Class B Shares that may be acquired upon exchange of Common Units and Class C Shares or Class D Shares, as
applicable, held by Owl Rock Capital Feeder LLC, in each case, except to the extent of his pecuniary interest therein. |
(8) |
The number of shares and class ownership percentages reported for Sean Ward excludes 17,138,152 Class D
Shares and an equal number of Common Units, in each case, held by Dyal Capital SLP LP and 1,500,000 Incentive Units held by Blue Owl MV; in each case, on behalf of Mr. Ward, his spouse or one or more entities controlled by him. Mr. Ward expressly
disclaims beneficial ownership of Class C Shares and Class D Shares and the Common Units held by or issuable to Dyal Capital SLP LP and Blue Owl MV, as applicable, and any of our Class A Shares or Class B Shares that may be acquired upon exchange of
Common Units and Class C Shares or Class D Shares, as applicable, held by or issuable to Dyal Capital SLP LP and Blue Owl MV, in each case, except to the extent of his pecuniary interest therein. |
(9) |
Augustus, LLC, an Illinois limited liability company (Augustus), holds 22,753,886 Class C
Shares, 22,753,886 Common Units and 22,753,886 Earnout Units, as defined in the Amendment to the Agreement and Plan of Merger, dated as of December 23, 2021, by and among the Company, Blue Owl Capital GP LLC, Blue Owl Capital Holdings LP, Blue
Owl Capital Carry LP, Flyer Merger Sub I, LLC, Flyer Merger Sub II, LP, OSREC GP Holdings, LP, Oak Street Real Estate Capital, LLC, SASC Feeder, LP and Augustus (the Oak Street Acquisition Agreement), on behalf of Mr. Zahr, his
spouse and one or more vehicles controlled by him. |
(10) |
Includes 10,000 RSUs granted under the Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan, each of which
represents the right to receive one Class A Share upon vesting. Each of these, with certain limited exceptions, vests on May 19, 2022. |
(11) |
Includes 10,000 RSUs granted under the Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan, each of which
represents the right to receive one Class A Share upon vesting. Each of these, with certain limited exceptions, vests on May 19, 2022. Additionally, includes 30,000 Class A Shares indirectly beneficially owned by Ms. Holz through
her spouse. |
135
(12) |
The number of shares and class ownership percentages reported for Andrew Laurino excludes 11,056,437 Class D
Shares and an equal number of Common Units, in each case, held by Dyal Capital SLP LP and 1,250,000 Incentive Units held by Blue Owl MV; in each case, on behalf of Mr. Laurino, his spouse or one or more entities controlled by him. Mr. Laurino
expressly disclaims beneficial ownership of Class C Shares and Class D Shares and the Common Units held by or issuable to Dyal Capital SLP LP and Blue Owl MV, as applicable, and any of our Class A Shares or Class B Shares that may be acquired upon
exchange of Common Units and Class C Shares or Class D Shares, as applicable, held by or issuable to Dyal Capital SLP LP and Blue Owl MV, in each case, except to the extent of his pecuniary interest therein. |
(13) |
The number of shares and class ownership percentages reported for Andrew Polland excludes 248,669 Class D
Shares, and an equal number of Common Units, in each case, held by Dyal Capital SLP LP and 818,648 Incentive Units held by Blue Owl MV; in each case, on behalf of Mr. Polland, his spouse or one or more vehicles controlled by him.
Mr. Polland expressly disclaims beneficial ownership of the Class C Shares and Class D Shares and the Common Units held by or issuable to Dyal Capital SLP LP and Blue Owl MV, as applicable, and any of our Class A Shares or
Class B Shares that may be acquired upon exchange of Common Units and Class C Shares or Class D Shares, as applicable, held by or issuable to Dyal Capital SLP LP and Blue Owl MV, in each case, except to the extent of his pecuniary
interest therein. |
(14) |
The number of shares and class ownership percentages reported for Ms. Reddy excludes 314,263 Incentive
Units on behalf of Ms. Reddy. Ms. Reddy expressly disclaims beneficial ownership of the Class C Shares and Class D Shares and the Common Units held by or issuable to Blue Owl MV, as applicable, and any of our Class A Shares
or Class B Shares that may be acquired upon exchange of Common Units and Class C Shares or Class D Shares, as applicable, held by or issuable to Blue Owl MV, in each case, except to the extent of her pecuniary interest therein.
|
(15) |
Includes 10,000 RSUs granted under the Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan, each of which
represents the right to receive one Class A Share upon vesting. Each of these, with certain limited exceptions, vests on May 19, 2022. |
(16) |
Owl Rock Capital Partners LP, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting
control over 175,392,700 Class D Shares on behalf of the Owl Rock Principals and 116,540,000 Class C Shares, each of which represents the right to receive one Common Unit and one Class C Share, subject to certain vesting conditions,
on behalf of Dyal Capital Partners IV Holdings (A) LP. Owl Rock Capital Partners LP is managed by Owl Rock Capital Partners (GP) LLC, which is governed by an executive committee comprised of Messrs. Ostrover, Lipschultz and Packer with
decisions over certain matters requiring the vote of Mr. Ostrover. As such, Mr. Ostrover may be deemed to beneficially own all such shares and units. Each of these individuals and entities disclaims any beneficial ownership of these shares
and units, except to the extent of their pecuniary interest therein. |
(17) |
Based solely upon information contained in the Schedule 13G filed with the SEC on June 1, 2021. Includes
3,500,000 Class A Shares held by BB Holdings AC LP, a Delaware limited partnership (BB Holdings AC), 2,000,000 Class A Shares held by Glide Path Solutions 2021 LP, a Delaware limited partnership (Glide Path Solutions
2021), 4,500,000 Class A Shares held by Glide Path Solutions 2020 LP, a Delaware limited partnership (Glide Path Solutions 2020), 20,000,000 Class A Shares held by BB Holdings AA LP, a Delaware limited partnership
(BB Holdings AA and, together with BB Holdings AC, Glide Path Solutions 2021 and Glide Path Solutions 2020, the ICQ Limited Partnerships), 10,000,000 Class A Shares held by
Co-Investment Portfolio 2021 LP, a Delaware limited partnership (Co-Investment Portfolio 2021) and 10,000,000 Class A Shares held by Tactical
Opportunities Portfolio 2020 LP, a Delaware limited partnership (Tactical Opportunities 2020 and, together with Co-Investment Portfolio 2021 and the ICQ Limited Partnerships, the Limited
Partnerships). ICQ BB GP, LLC, a Delaware limited liability company (ICQ BB), is the general partner of the ICQ Limited Partnerships, Co-Investment Portfolio GP II LP, a Delaware limited
partnership (Co-Investment Portfolio GP), is the general partner of Co-Investment Portfolio 2021, ICQ Co-Investment
II TT GP LLC, a Delaware limited liability company (ICQ Co-Investment), is the general partner of Co-Investment Portfolio GP, Tactical Opportunities
Portfolio GP, LP, a Delaware limited partnership (Tactical Opportunities Portfolio GP), is a the general partner of Tactical Opportunities 2020 and ICQ Tactical Opportunities TT GP, LLC, a Delaware limited liability company (ICQ
Tactical Opportunities and, together with ICQ BB and ICQ Co-Investment, the General |
136
|
Partners) is the general partner of Tactical Opportunities Portfolio GP. Divesh Makan, a citizen of the United States, is the managing member of each of the General Partners and may be
deemed to have voting, investment, and dispositive power with respect to the shares held by the Limited Partnerships. The address of the foregoing entities and person is c/o ICONIQ Capital, 394 Pacific Avenue, 2nd Floor, San Francisco, CA 94111.
|
(18) |
By virtue of his indirect control of the general partner of, and his indirect interest in, Dyal Capital SLP LP,
Mr. Rees may be deemed to beneficially own the Class D Shares and the Common Units beneficially owned by Dyal Capital SLP LP. Mr. Rees disclaims beneficial ownership of the shares and units held by Dyal Capital SLP LP, including and
any of our Class B Shares that may be acquired upon exchange of Common Units and Class D Shares, and any Common Units and Class C Shares and Class D Shares, in each case, except to the extent of his pecuniary interest therein.
The business address for each of Mr. Rees and Dyal Capital SLP LP is 1290 Avenue of the Americas, New York, NY 10104. |
(19) |
NBSH Blue Investments, LLC is the beneficial owner of 444,328,208 Class C Shares and an equal number of
Common Units. By virtue of the control of NBSH Blue Investments, LLC by affiliates of NBSH Acquisition, LLC, NBSH Acquisition, LLC may be deemed to beneficially own the Class C Shares beneficially owned by NBSH Blue Investments, LLC. Three or
more individuals are expected to have decision making authority with respect to the Class C Shares held indirectly by NBSH Acquisition, LLC, and therefore no individual is a beneficial holder of the shares held by NBSH Acquisition, LLC. The
business address for each of NBSH Acquisition, LLC and NBSH Blue Investments, LLC is 1290 Avenue of the Americas, New York, NY 10104. |
(20) |
Based solely upon information contained in the Schedule 13G filed with the SEC on February 14, 2022, by
Blue Pool Capital Limited, a company incorporated in Hong Kong (BPCL), Blue Pool Management Ltd., a Cayman Islands exempted company (BPM) and Oliver Paul Weisberg, a citizen of the Hong Kong Special Administrative Region of
the Peoples Republic of China (Mr. Weisberg). PSPE II Limited is an exempted company organized under the laws of the Cayman Islands. BPCL is the investment manager of PSPE II Limited and, in such capacity, exercises voting and
investment power over the Shares held for the account of PSPE II Limited. BPM is the sole shareholder of BPCL. Mr. Weisberg is the sole shareholder and a director of BPM. Mr. Weisberg is also a director of BPCL. The principal business
address of each of the Reporting Persons is 25/F Hysan Place, 500 Hennessy Road, Causeway Bay, Hong Kong. |
(21) |
Soros Fund Management LLC (SFM LLC) serves as principal investment manager to Quantum Strategic
Partners Ltd. As such, SFM LLC has been granted investment advisory discretion over all portfolio investments held for the account of such entities. George Soros serves as Chairman of SFM LLC and may be deemed to beneficially own all of the shares
held by Quantum Strategic Partners Ltd. The address of Quantum Strategic Partners Ltd. is c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman
Islands. |
(22) |
The common stock owned by MSD Owl Rock Investments, LLC (MSD Owl Rock) is comprised of 41,721,673
Class C Shares. The shares are held of record by MSD Owl Rock. MSD Private Capital Investments, L.P., a Delaware limited partnership, is the sole owner of MSD Owl Rock and may be deemed to beneficially own the securities beneficially owned by
MSD Owl Rock. MSD Capital, L. P. (MSD Capital) is the investment manager of MSD Owl Rock and the general partner of MSD Private Capital Investments, L.P., and may be deemed to beneficially own the securities beneficially owned by MSD Owl
Rock. MSD Capital Management, LLC (MSD Capital Management), is the general partner of MSD Capital, and may be deemed to beneficially own the securities beneficially owned by MSD Capital. Each of John C. Phelan and Marc R. Lisker is a
manager of, and may be deemed to beneficially own the securities beneficially owned by MSD Capital Management. Michael S. Dell is the controlling member of MSD Capital Management and may be deemed to beneficially own securities beneficially owned by
MSD Capital Management. Each of Messrs. Dell, Phelan and Lisker disclaims beneficial ownership of such securities except to the extent of any pecuniary interest therein. The address of the principal business office of MSD Capital, L.P. is 645 Fifth
Avenue, 21st Floor, New York, NY 10022. |
(23) |
Based solely upon information contained in the Schedule 13G jointly filed with the SEC on September 30,
2021 by Koch Industries, Inc. (Koch Industries) with respect to (i) 7,167,817 Class A Shares of Issuer held by Koch Financial Assets III, LLC (KFA) and (ii) 28,799,854 Class A Shares of Issuer held by Koch
|
137
|
Companies Defined Benefit Master Trust (Koch Pension). Koch Industries may be deemed to beneficially own the Issuer securities beneficially owned by (i) KFA as a result of its
100% ownership of KFA and (ii) the Koch Pension because of the involvement of certain of Koch Industries employees on Koch Pensions investment committee. |
(24) |
Based solely upon information contained in the Schedule 13G jointly filed with the SEC on February 11,
2022, by and on behalf of Capital International Investors (CII), a division of Capital Research and Management Company (CRMC), as well as its investment management subsidiaries and affiliates Capital Bank and Trust Company,
Capital International, Inc., Capital International Limited, Capital International Sarl, Capital International K.K., and Capital Group Private Client Services, Inc. (together with CRMC, the investment management entities). CIIs
divisions of each of the investment management entities collectively provide investment management services under the name Capital International Investors. The address of the principal business office of CII is 333 South Hope Street,
55th Floor, Los Angeles, CA 90071. |
(25) |
Based solely upon information contained in the Schedule 13G jointly filed with the SEC on February 9,
2022, by and on behalf of The Vanguard Group. The address of the principal business office of The Vanguard Group is 100 Vanguard Blvd. Malvern, PA 19355. |
(26) |
Based solely upon information contained in the Schedule 13G jointly filed with the SEC on January 10,
2022, by and on behalf of Capital World Investors (CWI), a division of CRMC, as well as its investment management entities. CWIs divisions of each of the investment management entities collectively provide investment management
services under the name Capital World Investors. The address of the principal business office of CWI is 333 South Hope Street, 55th Floor, Los Angeles, CA 90071. |
138
SELLING HOLDERS
This prospectus relates to the resale by the Selling Holders from time to time of Class A Shares. The Selling Holders may from time to
time offer and sell any or all of the Class A Shares set forth below pursuant to this prospectus and any accompanying prospectus supplement. When we refer to the Selling Holders in this prospectus, we mean the persons listed in the
table below, and the pledgees, donees, transferees, assignees, successors, designees and others who later come to hold any of the Selling Holders interest in the Class A Shares other than through a public sale.
The following table and the accompanying footnotes, based primarily on information initially provided to us by the Selling Holders, sets
forth, as of August 2, 2021, the Class A Shares they wished to be covered by this registration statement and eligible for sale under this prospectus. A Selling Holder may have sold or transferred some or all of the securities indicated
below with respect to such SElling Holder, and may in the future sell or transfer some or all of the securities indicated below in transactions exempt from the registration requirements of the SEcurities Act rather than under this prospectus.
We cannot advise you as to whether the Selling Holders will in fact sell any or all of such
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares Beneficially Owned Prior to Offering |
|
|
Class A Shares Offered |
|
|
Class A Shares Beneficially Owned After the Offered Shares are Sold |
|
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
Alyeska Master Fund, L.P.(2) |
|
|
4,068,427 |
|
|
|
* |
|
|
|
3,000,000 |
|
|
|
* |
|
|
|
1,068,427 |
|
|
|
* |
|
Blue Investors, L.L.C.(3) |
|
|
3,254,000 |
|
|
|
* |
|
|
|
3,254,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Blue Warehouse, L.L.C.(4) |
|
|
11,746,000 |
|
|
|
* |
|
|
|
11,746,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Chescaplq LLC(5) |
|
|
750,000 |
|
|
|
* |
|
|
|
750,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
CIBC Mellon Trust Company, Trustee of the CN Canadian Master Trust Fund(6) |
|
|
3,500,000 |
|
|
|
* |
|
|
|
3,500,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Citadel Multi-Strategy Equities Master Fund Ltd.(7) |
|
|
3,000,000 |
|
|
|
* |
|
|
|
3,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
CVI Investments, Inc.(8) |
|
|
2,810,961 |
|
|
|
* |
|
|
|
2,250,000 |
|
|
|
* |
|
|
|
560,961 |
|
|
|
* |
|
Affiliates of DSAM Partners (London) Ltd.(9) |
|
|
1,360,000 |
|
|
|
* |
|
|
|
1,360,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Vazirani Family Trust(10) |
|
|
250,000 |
|
|
|
* |
|
|
|
250,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Federated Funds(11) |
|
|
10,000,000 |
|
|
|
* |
|
|
|
10,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
XN Exponent Master Fund LP(12) |
|
|
3,250,000 |
|
|
|
* |
|
|
|
3,250,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Ghisallo Master Fund LP (13) |
|
|
3,000,000 |
|
|
|
* |
|
|
|
2,000,000 |
|
|
|
* |
|
|
|
1,000,000 |
|
|
|
* |
|
Hedosophia Public Investments Limited(14) |
|
|
8,000,000 |
|
|
|
* |
|
|
|
8,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Highbridge Tactical Credit Master Fund, L.P.(15) |
|
|
1,500,000 |
|
|
|
* |
|
|
|
1,500,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
BB Holdings AA LP and Affiliates(16) |
|
|
50,000,000 |
|
|
|
3.72 |
% |
|
|
50,000,000 |
|
|
|
3.72 |
% |
|
|
|
|
|
|
|
|
Illiquid Markets 1888 Fund, LLC(17) |
|
|
2,000,000 |
|
|
|
* |
|
|
|
2,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Entities affiliated with Millennium Management LLC(18) |
|
|
2,712,284 |
|
|
|
* |
|
|
|
2,640,000 |
|
|
|
* |
|
|
|
72,284 |
|
|
|
* |
|
Jane Street Global Trading, LLC(19) |
|
|
639,249 |
|
|
|
* |
|
|
|
500,000 |
|
|
|
* |
|
|
|
139,249 |
|
|
|
* |
|
Koch Companies Defined Benefit Master Trust(20) |
|
|
10,000,000 |
|
|
|
* |
|
|
|
10,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares Beneficially Owned Prior to Offering |
|
|
Class A Shares Offered |
|
|
Class A Shares Beneficially Owned After the Offered Shares are Sold |
|
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
Liberty Mutual Investment Holdings LLC(21) |
|
|
10,000,000 |
|
|
|
* |
|
|
|
10,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Linden Capital L.P.(22) |
|
|
250,000 |
|
|
|
* |
|
|
|
250,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Funds managed by Luxor Capital Group, LP(23) |
|
|
6,002,020 |
|
|
|
* |
|
|
|
6,000,000 |
|
|
|
* |
|
|
|
2,020 |
|
|
|
* |
|
Tech Opportunities LLC(24) |
|
|
500,000 |
|
|
|
* |
|
|
|
500,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
The Phoenix Insurance Ltd.(25) |
|
|
680,931 |
|
|
|
* |
|
|
|
650,000 |
|
|
|
* |
|
|
|
30,931 |
|
|
|
|
|
Affiliates of MSD Capital, L.P.(26) |
|
|
3,375,000 |
|
|
|
* |
|
|
|
3,375,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Affiliates of MSD Partners, L.P.(27) |
|
|
4,125,000 |
|
|
|
* |
|
|
|
4,125,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
PFMO4 LLC(28) |
|
|
500,000 |
|
|
|
* |
|
|
|
500,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Shotfut Menayot Chool Phoenix Amitim(29) |
|
|
3,600,088 |
|
|
|
* |
|
|
|
2,600,000 |
|
|
|
* |
|
|
|
1,000,088 |
|
|
|
* |
|
Suvretta Master Fund, Ltd. and Suvretta Long Master Fund, Ltd.(30) |
|
|
1,000,000 |
|
|
|
* |
|
|
|
1,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
TOMS Capital Investment Management LP(31) |
|
|
2,000,000 |
|
|
|
* |
|
|
|
2,000,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Aaron Kim(32) |
|
|
192,208 |
|
|
|
* |
|
|
|
192,208 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Anne Ray Foundation(33) |
|
|
768,839 |
|
|
|
* |
|
|
|
768,839 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Moore Management Trust(34) |
|
|
384,419 |
|
|
|
* |
|
|
|
384,419 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Co-Investment Fund (Parallel) L.P.CF IV
Series(35) |
|
|
592,774 |
|
|
|
* |
|
|
|
592,774 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Project Owl Rock LLC(36) |
|
|
392,005 |
|
|
|
* |
|
|
|
392,005 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
PSPE II Limited(37) |
|
|
63,673,188 |
|
|
|
4.74 |
% |
|
|
63,673,188 |
|
|
|
4.74 |
% |
|
|
|
|
|
|
|
|
Brown University(38) |
|
|
38,792,761 |
|
|
|
2.89 |
% |
|
|
38,792,761 |
|
|
|
2.89 |
% |
|
|
|
|
|
|
|
|
Carl Daikeler Living Trust(39) |
|
|
51,255 |
|
|
|
* |
|
|
|
51,255 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
CHCP Direct Investors (Owl Rock), L.P.(40) |
|
|
3,844,197 |
|
|
|
* |
|
|
|
3,844,197 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
The Cox-Vadakan 2015 Irrevocable Trust(41) |
|
|
25,627 |
|
|
|
* |
|
|
|
25,627 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Co-Investment Fund IV, L.P US Tax Exempt
Series(42) |
|
|
140,388 |
|
|
|
* |
|
|
|
140,388 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Common Pension Fund E(43) |
|
|
12,813,992 |
|
|
|
* |
|
|
|
12,813,992 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Donald and Catherine Marron Charitable Trust(44) |
|
|
256,279 |
|
|
|
* |
|
|
|
256,279 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Fexos Owl Rock, Inc.(45) |
|
|
1,281,399 |
|
|
|
* |
|
|
|
1,281,399 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
JMC Investments, LLC(46) |
|
|
384,419 |
|
|
|
* |
|
|
|
384,419 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
John J. Mack(47) |
|
|
128,139 |
|
|
|
* |
|
|
|
128,139 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Katherine M. Gehl 2005 Trust(48) |
|
|
96,103 |
|
|
|
* |
|
|
|
96,103 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Quantum Strategic Partners Ltd.(49) |
|
|
19,220,989 |
|
|
|
1.43 |
% |
|
|
19,220,989 |
|
|
|
1.43 |
% |
|
|
|
|
|
|
|
|
Leesa Gidaro Living Trust(50) |
|
|
128,139 |
|
|
|
* |
|
|
|
128,139 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Margaret A. Cargill Foundation(51) |
|
|
512,559 |
|
|
|
* |
|
|
|
512,559 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
ORC Partners, L.P.(52) |
|
|
3,075,358 |
|
|
|
* |
|
|
|
3,075,358 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
ORCH Partners, L.P.(53) |
|
|
768,839 |
|
|
|
* |
|
|
|
768,839 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares Beneficially Owned Prior to Offering |
|
|
Class A Shares Offered |
|
|
Class A Shares Beneficially Owned After the Offered Shares are Sold |
|
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
Owl Capital, LLC(54) |
|
|
1,922,098 |
|
|
|
* |
|
|
|
1,922,098 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Rural India Supporting Trust(55) |
|
|
3,203,498 |
|
|
|
* |
|
|
|
3,203,498 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
The Dalton School, Inc.(56) |
|
|
256,279 |
|
|
|
* |
|
|
|
256,279 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
The Regents of the University of California(57) |
|
|
16,017,491 |
|
|
|
1.19 |
% |
|
|
16,017,491 |
|
|
|
1.19 |
% |
|
|
|
|
|
|
|
|
W2M2H LLC(58) |
|
|
128,139 |
|
|
|
* |
|
|
|
128,139 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
WVP Insurance Fund I Series Interests of the SALI Multi-Series Fund IV, LP(59) |
|
|
1,281,399 |
|
|
|
* |
|
|
|
1,281,399 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
2006 Popowitz Family Trust(60) |
|
|
79,628 |
|
|
|
* |
|
|
|
79,628 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
BCF IV (OS), Inc.(61) |
|
|
565,762 |
|
|
|
* |
|
|
|
565,762 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
BRHF Custom, LLC(62) |
|
|
512,559 |
|
|
|
* |
|
|
|
512,559 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Brian Kwait(63) |
|
|
129,139 |
|
|
|
* |
|
|
|
128,139 |
|
|
|
* |
|
|
|
1,000 |
|
|
|
|
|
Bryan White(64) |
|
|
1,116,646 |
|
|
|
* |
|
|
|
1,116,646 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Chinn Bai Revocable Trust(65) |
|
|
32,034 |
|
|
|
* |
|
|
|
32,034 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Co-Investment Fund IV, L.P. US Taxable Series(66) |
|
|
695,696 |
|
|
|
* |
|
|
|
695,696 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Co-Investment Fund IV, L.P.Z US Taxable
Series(67) |
|
|
176,166 |
|
|
|
* |
|
|
|
176,166 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Crescent Holdings, LLC(68) |
|
|
1,281,399 |
|
|
|
* |
|
|
|
1,281,399 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
David R. Salomon(69) |
|
|
227,905 |
|
|
|
* |
|
|
|
227,905 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Dawn Creek Investments LLC(70) |
|
|
1,018,710 |
|
|
|
* |
|
|
|
1,018,710 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Effem Private Credit Fund Ltd.(71) |
|
|
922,607 |
|
|
|
* |
|
|
|
922,607 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
GAC Diversified IDF OR, LLC(72) |
|
|
256,279 |
|
|
|
* |
|
|
|
256,279 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
GAC Long OR, LLC(73) |
|
|
384,419 |
|
|
|
* |
|
|
|
384,419 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Glate, LLC(74) |
|
|
51,255 |
|
|
|
* |
|
|
|
51,255 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Good Ventures Foundation(75) |
|
|
2,405,003 |
|
|
|
* |
|
|
|
2,405,003 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Gracie Partners, LLC(76) |
|
|
1,848,874 |
|
|
|
* |
|
|
|
1,848,874 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Halper Irrevocable Trust(77) |
|
|
128,139 |
|
|
|
* |
|
|
|
128,139 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Halper Living Trust(78) |
|
|
128,139 |
|
|
|
* |
|
|
|
128,139 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Marlene Hess(79) |
|
|
192,208 |
|
|
|
* |
|
|
|
192,208 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Marron Direct Investments, LLC(80) |
|
|
704,768 |
|
|
|
* |
|
|
|
704,768 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Merrick R. Kleeman 2016 Irrevocable Trust(81) |
|
|
256,279 |
|
|
|
* |
|
|
|
256,279 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Michael S. Baldock(82) |
|
|
128,139 |
|
|
|
* |
|
|
|
128,139 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Miriam and Peter Haas Investments LP(83) |
|
|
192,208 |
|
|
|
* |
|
|
|
192,208 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
MLH Trust(84) |
|
|
384,419 |
|
|
|
* |
|
|
|
384,419 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
MPM Investments LLC(85) |
|
|
256,279 |
|
|
|
* |
|
|
|
256,279 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
MSD Owl Rock Investments, LLC(86) |
|
|
41,721,673 |
|
|
|
3.11 |
% |
|
|
41,721,673 |
|
|
|
3.11 |
% |
|
|
|
|
|
|
|
|
Naomi Gleit Living Trust(87) |
|
|
203,740 |
|
|
|
* |
|
|
|
203,740 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
OCA Investment Partners LLC(88) |
|
|
3,587,918 |
|
|
|
* |
|
|
|
3,587,918 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
RE Salomon Family LLC(89) |
|
|
805,450 |
|
|
|
* |
|
|
|
805,450 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares Beneficially Owned Prior to Offering |
|
|
Class A Shares Offered |
|
|
Class A Shares Beneficially Owned After the Offered Shares are Sold |
|
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
|
Number of Shares |
|
|
%(1) |
|
RES Revocable Trust(90) |
|
|
659,004 |
|
|
|
* |
|
|
|
659,004 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Schrage Family Trust Agreement(91) |
|
|
265,431 |
|
|
|
* |
|
|
|
265,431 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Stuart Investment Partners, LLC(92) |
|
|
384,419 |
* |
|
|
* |
|
|
|
384,419 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
The Bruce and Elizabeth Dunlevie Living Trust(93) |
|
|
203,740 |
|
|
|
* |
|
|
|
203,740 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
The Richard Salomon Family Foundation Inc.(94) |
|
|
137,291 |
|
|
|
* |
|
|
|
137,291 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
The State of Oregon, by and through the Oregon Investment Council on behalf of the Oregon Public
Employees Retirement Fund(95) |
|
|
4,805,246 |
|
|
|
* |
|
|
|
4,805,246 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Kevin Beebe(96) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Payne Brown(97) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Rick Jelinek(98) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Roma Khanna(99) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
John Kim(100) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Michael Rubenstein(101) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Vijay Sondhi(102) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Michael Vorhaus(103) |
|
|
25,000 |
|
|
|
* |
|
|
|
25,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Altimar Sponsor LLC(104) |
|
|
4,385,625 |
|
|
|
* |
|
|
|
4,385,625 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
NBSH Blue Investments, LLC(105) |
|
|
487,356,098 |
|
|
|
36.29% |
|
|
|
487,356,098 |
|
|
|
36.29 |
% |
|
|
|
|
|
|
|
|
Owl Rock Capital Feeder LLC(106) |
|
|
291,932,700 |
|
|
|
21.74% |
|
|
|
291,932,700 |
|
|
|
21.74 |
% |
|
|
|
|
|
|
|
|
Dyal Capital SLP LP(107) |
|
|
143,739,427 |
|
|
|
10.70% |
|
|
|
143,739,427 |
|
|
|
10.70 |
% |
|
|
|
|
|
|
|
|
Workplay Ventures LLC(108) |
|
|
1,990,744 |
|
|
|
* |
|
|
|
1,990,744 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Dustin A. Moskovitz Trust dated December 27, 2005(109) |
|
|
3,806,395 |
|
|
|
* |
|
|
|
3,806,395 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
(1) |
Based upon 1,343,042,262 Class A Shares (including 320,005,528 Class A Shares outstanding as of
June 14, 2021 and 1,023,036,734 Class A Shares that were issued in respect of Common Units and Seller Earnout Securities that vested upon the occurrence of certain Triggering Events). Ownership percentages do not include Class A
Shares issued or issuable upon the exercise of warrants or pursuant to the 2021 Omnibus Incentive Plan. Class A Shares offered and beneficially owned are based primarily on information initially provided to us by the Selling Holders indicating
the Class A Shares they wished to be covered by this registration statement and eligible for sale under this prospectus. A Selling Holder may have sold or transferred some or all of the securities set forth in the table and accompanying
footnotes, and consequently the securities indicated to be offered may exceed the number of seucriites to be sold by the Selling Holder or the number of securities outstanding. |
(2) |
Consists of 4,068,427 Class A Shares (3,000,000 of which are being offered by this prospectus) held by
Alyeska Master Fund, L.P., a Cayman Islands limited partnership (Alyeska). Alyeska Investment Group, L.P., the investment manager of Alyeska, has voting and investment control of the shares held by Alyeska. Mr. Anand Parekh is the
Chief Executive Officer of Alyeska Investment Group, L.P. and may be deemed to be the beneficial owner of such shares. Mr. Parekh, however, disclaims any beneficial ownership of the
|
142
|
shares held by Alyeska Master Fund, L.P. The address of Alyeska is 77 West Wacker Drive, Suite 700, Chicago, Illinois 60601. |
(3) |
Consists of 3,254,000 Class A Shares held by Blue Investors, L.L.C. (Blue Investors). Blue
Investors is a Delaware limited liability company. While Oak Lawn Direct Investors GP, L.L.C. (Oak Lawn) is the managing member of Blue Investors, CH Investment Partners, L.L.C. (CHIP) serves as the investment manager to Blue
Investors. As investment manager, CHIP has been granted exclusive investment discretion and investment management authority with respect to Blue Investors and its investments, including the common stock of Altimar held by Blue Investors. Michael
Silverman and Kirk Rimer serve as Co-Presidents of CHIP and ultimately control both CHIP and Oak Lawn. The business address for each of Blue Investors, CHIP, Oak Lawn, Mr. Silverman and Mr. Rimer is
c/o CH Investment Partners, L.L.C., 3953 Maple Avenue, Suite 250, Dallas, Texas 75219. |
(4) |
Consists of 11,746,000 Class A Shares held by Blue Warehouse, L.L.C. (Blue Warehouse). Blue
Warehouse is a Delaware limited liability company. While Oak Lawn Direct Investors GP, L.L.C. (Oak Lawn) is the managing member of Blue Warehouse. CH Investment Partners, L.L.C. (CHIP) serves as the investment manager to Blue
Warehouse. As investment manager, CHIP has been granted exclusive investment discretion and investment management authority with respect to Blue Warehouse and its investments, including the common stock of Blue Owl held by Blue Warehouse. Michael
Silverman and Kirk Rimer serve as Co-Presidents of CHIP and ultimately control both CHIP and Oak Lawn. The business address for each of Blue Warehouse, CHIP, Oak Lawn, Mr. Silverman and Mr. Rimer is
c/o CH Investment Partners, L.L.C., 3953 Maple Avenue, Suite 250, Dallas, Texas 75219. |
(5) |
Consists of 750,000 Class A Shares held by Chescaplq LLC, a Delaware limited liability company. Traci
Lerner has the power to vote or dispose of the shares held by Chescaplq LLC. The address of Chescaplq LLC is 2800 Quarry Lake Drive, Suite 300 Baltimore, MD 21209. |
(6) |
Consists of 3,500,000 Class A Shares held by the CN Canadian Master Trust Fund, a Canadian pension fund.
CIBC Mellon Trust Company is the trustee of the CN Canadian Master Trust Fund. Marlene Kaye Puffer is the President and Chief Executive Officer of CN Investment Division. CIBC Mellon Trust Company is the trustee and may be deemed to beneficially
own, the shares held by CN Canadian Master Trust Fund. The business address of the foregoing entities is 5 Place Ville Marie, Suite 1100, Montreal, Quebec H3C 4T2. |
(7) |
Consists of 3,000,000 Class A Shares held by Citadel Multi-Strategy Equities Master Fund Ltd., a Cayman
Islands limited company. Pursuant to a portfolio management agreement, Citadel Advisors LLC, an investment advisor registered under the U.S. Investment Advisers Act of 1940 (CAL), holds the voting and dispositive power with respect to
the shares held by Citadel Multi-Strategy Equities Master Fund Ltd. Citadel Advisors Holdings LP (CAH) is the sole member of CAL. Citadel GP LLC is the general partner of CAH. Kenneth Griffin (Griffin) is the President and
Chief Executive Officer of and sole member of Citadel GP LLC. Citadel GP LLC and Griffin may be deemed to be the beneficial owners of the Class A Shares through their control of CAL and/or certain other affiliated entities. The address of
Citadel Multi-Strategy Equities Master Fund Ltd. is c/o Citadel Americas LLC, 131 South Dearborn Street, Chicago, IL 60603. |
(8) |
Consists of 2,810,961 Class A Shares (2,250,000 of which are being offered by this prospectus) held by CVI
Investments, Inc., a Cayman Islands exempted corporation (CVI). Heights Capital Management, Inc., the authorized agent of CVI, has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the
beneficial owner of these shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims
any such beneficial ownership of the shares. The principal business address of CVI is c/o Heights Capital Management, Inc., 101 California Street, Suite 3250, San Francisco, California 94111. |
(9) |
Consists of 280,000 Class A Shares held by DSAM Alpha+ Master Fund, a Cayman Islands limited liability
company, and 1,080,000 Class A Shares held by DSAM+ Master Fund, a Cayman Islands limited liability company (collectively, the DSAM Funds). DSAM Partners (London) Ltd. (the Investment Advisor) is the investment advisor
to the DSAM Funds and as such may be deemed to have voting and investment power over the securities held by the DSAM Funds. The Investment Advisor is ultimately |
143
|
controlled by Mr. Guy Shahar. The DSAM Funds and Mr. Shahar disclaim beneficial ownership of the securities listed above. The address of each of the DSAM Funds is c/o Maples Corporate
Services Limited, PO Box 309, Ugland House, Grand Cayman KY1-1104. |
(10) |
Consists of 250,000 Class A Shares held by Vazirani Family Trust, a California trust. Pravin Vazirani is
the Trustee of Vazirani Family Trust. The address of Pravin Vazirani is 1940 Camino a los Cerros, Menlo Park, CA 94025. |
(11) |
Consists of 9,725,000 Class A Shares held by Federated Hermes Kaufmann Fund, a Massachusetts business
trust (FHK I), a portfolio of Federated Hermes Equity Funds (FH Equity) and 275,000 Class A Shares held by Federated Hermes Kaufmann Fund II, a Massachusetts business trust (FHK II), a portfolio of Federated
Hermes Insurance Series (FH Insurance). Both FH Equity and FH Insurance are managed by Federated Equity Management Company of Pennsylvania and subadvised by Federated Global Investment Management Corp., which are wholly owned
subsidiaries of FII Holdings, Inc., which is a wholly owned subsidiary of Federated Hermes, Inc. (the Parent). All of the Parents outstanding voting stock is held in the Voting Shares Irrevocable Trust (the Trust), for
which Thomas R. Donahue, Rhodora J. Donahue and J. Christopher Donahue, who are collectively referred to as the Trustees, act as trustees. The Parents subsidiaries have the power to direct the vote and disposition of the securities
held by the Fund. Each of the Parent, its subsidiaries, the Trust, and each of the Trustees expressly disclaim beneficial ownership of such securities. The address of FHK Fund I and FHK Fund II is 4000 Ericsson Drive, Warrendale, Pennsylvania
15086-7561. |
(12) |
Consists of 3,250,000 Class A Shares held by XN Exponent Master Fund LP, a Cayman Islands limited
partnership. XN Exponent Advisors LLC serves as investment manager to XN Exponent Master Fund LP (the Fund) and has discretionary authority to make investment decisions and determine how to vote any securities held by the Fund. XN
Exponent Advisors LLC is wholly owned by XN LP, a registered investment advisor. The general partner of XN LP is XN Management GP LLC, which is indirectly controlled by Gaurav Kapadia. The principal business address of the entities referenced herein
is 412 West 15th Street, 13th Floor, New York, New York 10011. |
(13) |
Consists of 3,000,000 Class A Shares (2,000,000 of which are being offered by this prospectus) held by
Ghisallo Capital Management LLC, a Cayman Islands limited partnership. Michael Germino is the authorized signatory of Ghisallo Capital Management LLC. The address of Michael Germino is 27 Hospital Road, Grand Cayman
KYI-9008. |
(14) |
Consists of 8,000,000 Class A Shares held by Hedosophia Public Investments Limited, a Guernsey limited
company. The address of Hedosophia Public Investments Limited is PO Box 255, Trafalgar Court, Les Banques, St. Peter Port, Guernsey, GY1 3QL. |
(15) |
Consists of 1,500,000 Class A Shares held by Highbridge Tactical Credit Master Fund, L.P., a Cayman
Islands limited partnership (the Highbridge Fund). Excludes 161,445 Class A Shares underlying warrants held by the Highbridge Fund that are not exercisable within 60 days. Highbridge Capital Management, LLC (HCM), the
trading manager of the Highbridge Fund, may be deemed to be the beneficial owner of the shares held by the Highbridge Fund. Jonathan Segal and Jason Hempel are responsible for the investment and voting decisions made by HCM with respect to the
shares held by the Highbridge Fund. The Highbridge Fund and the foregoing individuals disclaim any beneficial ownership of the shares held by the Highbridge Fund. The business address of HCM and the Highbridge Fund is 277 Park Avenue, 23rd Floor,
New York, NY 10172. |
(16) |
Consists of (i) 3,500,000 Class A Shares held by BB Holdings AC LP, a Delaware limited partnership
(BB Holdings AC), (ii) 2,000,000 Class A Shares held by Glide Path Solutions 2021 LP, a Delaware limited partnership (Glide Path Solutions 2021), (iii) 4,500,000 Class A Shares held by Glide Path Solutions 2020 LP,
a Delaware limited partnership (Glide Path Solutions 2020), (iv) 20,000,000 Class A Shares held by BB Holdings AA LP, a Delaware limited partnership (BB Holdings AA and, together with BB Holdings AC, Glide Path Solutions
2021 and Glide Path Solutions 2020, the ICQ Limited Partnerships), (v) 10,000,000 Class A Shares held by Co-Investment Portfolio 2021 LP, a Delaware limited partnership (Co-Investment Portfolio 2021) and (vi) 10,000,000 Class A Shares held by Tactical Opportunities Portfolio 2020 LP, a Delaware limited partnership (Tactical Opportunities 2020 and,
together with Co-Investment Portfolio 2021 and the ICQ Limited Partnerships, the Limited |
144
|
Partnerships). ICQ BB GP, LLC, a Delaware limited liability company (ICQ BB), is the general partner of the ICQ Limited Partnerships,
Co-Investment Portfolio GP II LP, a Delaware limited partnership (Co-Investment Portfolio GP), is the general partner of
Co-Investment Portfolio 2021, ICQ Co-Investment II TT GP LLC, a Delaware limited liability company (ICQ
Co-Investment), is the general partner of Co-Investment Portfolio GP, Tactical Opportunities Portfolio GP, LP, a Delaware limited partnership (Tactical
Opportunities Portfolio GP), is a the general partner of Tactical Opportunities 2020 and ICQ Tactical Opportunities TT GP, LLC, a Delaware limited liability company (ICQ Tactical Opportunities and, together with ICQ BB and ICQ Co-Investment, the General Partners) is the general partner of Tactical Opportunities Portfolio GP. Divesh Makan is the managing member of each of the General Partners and may be deemed to have voting,
investment, and dispositive power with respect to the shares held by the Limited Partnerships. Tactical Opportunities Portfolio 2020 LP and BB Holdings OR LP, an affiliate of the Limited Partnerships, entered into revenue share agreements across the
Owl Rock Opportunistic Platform on or around July 2020. The address of the foregoing entities and person is c/o ICONIQ Capital, 394 Pacific Avenue, 2nd Floor, San Francisco, CA 94111. |
(17) |
Consists of 2,000,000 Class A Shares held by Illiquid Markets 1888 Fund, LLC, a Delaware limited liability
company. Christopher Dries and Jeffrey Straayer have the power to vote or dispose of, and may be deemed to beneficially own, the securities held by the Selling Holder. The address of Illiquid Markets 1888 Fund, LLC is 1401 Lawrence St, Suite 1920,
Denver, CO 80202. |
(18) |
Consists of 2,712,284 Class A Shares (2,640,000 of which are being offered by this prospectus) held by
Integrated Core Strategies (US) LLC, a Delaware limited liability company (Integrated Core Strategies). Millennium Management LLC, a Delaware limited liability company (Millennium Management), is the general partner of the
managing member of Integrated Core Strategies and may be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies. The number of shares and class ownership percentages reported for Integrated
Core Strategies do not include the Class A Share and 311,263 Class A Shares issuable upon exercise of warrants held by ICS Opportunities, Ltd., an exempted company organized under the laws of the Cayman Islands (ICS
Opportunities), an affiliate of Integrated Core Strategies. Millennium Management is also the general partner of the 100% owner of ICS Opportunities and may also be deemed to have shared voting control and investment discretion over securities
owned by ICS Opportunities. Millennium Group Management LLC, a Delaware limited liability company (Millennium Group Management), is the managing member of Millennium Management and may also be deemed to have shared voting control and
investment discretion over securities owned by Integrated Core Strategies and ICS Opportunities. The managing member of Millennium Group Management is a trust of which Israel A. Englander, a United States citizen (Mr. Englander),
currently serves as the sole voting trustee. Therefore, Mr. Englander may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies and ICS Opportunities. The foregoing should not
be construed in and of itself as an admission by Millennium International Management, Millennium Management, Millennium Group Management or Mr. Englander as to beneficial ownership of the securities owned by Integrated Core Strategies or ICS
Opportunities. The address of Integrated Core Strategies (US) LLC is c/o Millenium Management LLC, 399 Park Avenue, New York, NY 10022. |
(19) |
Consists of 639,249 Class A Shares (500,000 of which are being offered by this prospectus) held by Jane
Street Global Trading, LLC, a Delaware limited liability company. Jane Street Global Trading, LLC is a wholly owned subsidiary of Jane Street Group, LLC. Michael A. Jenkins and Robert. A. Granieri are the members of the Operating Committee of Jane
Street Group, LLC. The address of Jane Street Global Trading, LLC is 250 Vesey Street, 3rd Floor, New York, NY 10281. |
(20) |
Consists of 10,000,000 Class A Shares held by Koch Companies Defined Benefit Master Trust, a New York
trust. The Koch Companies Pension Investment Committee has voting and investment power relating to the shares. The Committee has delegated to its member, Randall A. Bushman, decision making rights with respect to the shares. The address of Koch
Companies Defined Benefit Master Trust is 500 Grant Street, Room 151-1065, Pittsburgh, PA 15258-0001. |
(21) |
Consists of 10,000,000 Class A Shares held by Liberty Mutual Investment Holdings LLC, a Delaware limited
liability company (LMIH). LMIHs six insurance company managing members are each |
145
|
ultimately controlled by Liberty Mutual Holding Company Inc., a mutual holding company. The Chief Investment Officer of each of the managing members of LMIH exercises dispositive power over the
Class A Shares being registered for resale in this prospectus. The address of LMIH is 175 Berkeley Street, Boston, MA 02116. |
(22) |
Consists of 250,000 Class A Shares held by Linden Capital L.P., a Bermuda limited partnership. The
securities directly held by Linden Capital L.P. are indirectly held by Linden Advisors LP (the investment manager of Linden Capital L.P.), Linden GP LLC (the general partner of Linden Capital L.P.), and Mr. Siu Min (Joe) Wong (the principal
owner and the controlling person of Linden Advisors LP and Linden GP LLC). Linden Capital L.P., Linden Advisors LP, Linden GP LLC and Mr. Wong share voting and dispositive power with respect to the securities held by Linden Capital L.P. The
addresses of Linden Capital L.P. are Victoria Place, 31 Victoria Street, Hamilton HM10, Bermuda and c/o Linden Advisors LP, 590 Madison Avenue, 15th Fl, New York, NY 10022. |
(23) |
Consists of 862,223 Class A Shares held by Luxor Capital Partners, LP., a Delaware limited partnership
(861,132 of which are being offered by this prospectus), 523,536 Class A Shares held by Luxor Capital Partners Offshore Master Fund, LP., a Cayman Islands limited partnership (522,871 of which are being offered by this prospectus) and 399,585
Class A Shares (399,321 of which are being offered by this prospectus) held by Luxor Wavefront, LP, a Delaware limited partnership, (collectively, the Luxor Funds) and 4,216,676 Class A Shares held by Lugard Road Capital Master
Fund, LP., a Cayman Islands limited partnership. Christian Leone is acting on behalf of Luxor Capital Group, LP, the investment manager of each of the Luxor Funds. Jonathan Green, on behalf of Lugard Road Capital GP, LLC, the general partner of
Lugard Road Capital Master Fund, LP, has the power to vote or dispose of, and may be deemed to beneficially own, the shares held by Lugard Road Capital Master Fund, LP. The address of each of the Luxor Funds and Lugard Road Capital Master Fund, LP
is 1114 Avenue of the Americas, 28th Fl, New York, NY 10036. |
(24) |
Consists of 500,000 Class A Shares held by Tech Opportunities LLC, a Delaware limited liability company.
Hudson Bay Capital Management LP, the investment manager of Tech Opportunities LLC, has voting and investment power over the securities held by the Selling Holder. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the
general partner of Hudson Bay Capital Management LP. Each of Tech Opportunities LLC and Sander Gerber disclaims beneficial ownership over the securities held by the Selling Holder. The address of Tech Opportunities LLC is C/o Hudson Bay Capital
Management LP, 777 Third Avenue, 30th Floor, New York, NY 10017. |
(25) |
Consists of 680,931 Class A Shares (650,000 of which are being offered by this prospectus) held by The
Phoenix Insurance Company Ltd.. The address of The Phoenix Insurance Company Ltd. is 53 Derech HaShalom St, Givatayim, Israel. 5345433. |
(26) |
Consists of 3,187,500 shares held by MSD Value Investments, L.P., a Delaware limited partnership
(MSDVI), and 187,500 shares held by Black Marlin Investments, LLC, a Delaware limited liability company (Black Marlin). MSD Capital, LP., a Delaware limited partnership (MSD Capital), is the general partner of
MSDVI and the manager of Black Marlin and may be deemed to beneficially own securities beneficially owned by each of them. MSD Capital Management, LLC, a Delaware limited liability company (MSD Capital Management), is the general partner
of MSD Capital, and may be deemed to beneficially own securities beneficially owned by MSD Capital. John Phelan and Marc Lisker are managers of, and Michael S. Dell is the controlling member of, MSD Capital Management, and may be deemed to
beneficially own securities beneficially owned by MSD Capital Management. The address of MSDVI and Black Marlin is c/o MSD Capital, LP. 645 Fifth Ave, 21st Fl, NY, NY 10022. |
(27) |
Consists of 629,208 shares held by MSD Credit Opportunity Master Fund, L.P., a Cayman Islands limited
partnership (MSDC), 1,978,331 shares held by MSD Special Investments Fund, L.P., a Delaware limited partnership (MSDS), 892,461 shares held by MSD SIF Holdings, L.P., a Cayman Islands limited partnership (MSDSIF),
and 625,000 shares held by MSD EIV Private, LLC, a Delaware limited liability company (MSDEIV and, together with MSDC, MSDS and MSDSIF, the MSD Funds). MSD Partners, L.P. (MSD Partners) is the investment manager
of the MSD Funds and may be deemed to beneficially own securities beneficially owned by MSD Partners. MSD Partners (GP), LLC, a Delaware limited liability company (MSD GP), is the general partner of MSD Partners, and may be deemed to
beneficially |
146
|
own securities beneficially owned by MSD Partners. Each of John C. Phelan, Marc R. Lisker and Brendan P. Rogers is a manager of, and may be deemed to beneficially own securities beneficially
owned by MSD GP. MSDC, MSDS, MSDSIF and MSDEIV (collectively, the MSD Partners Affiliates) are the record and direct beneficial owners of the PIPE Securities. MSD Partners is the investment manager of the MSD Partners Affiliates. MSD GP
is the general partner of MSD Partners and may be deemed to beneficially owned securities beneficially owned by MSD Partners. Each of John C. Phelan, Marc R. Lisker and Brendan Rodgers is a manager of, and may be deemed to beneficially own
securities beneficially owned by, MSD GP. The address of MSDC and MSDSIF is c/o Maples and Calder, PO Box 309, Ugland House KY1-1104, Cayman Islands. The address of MSDS and MSDEIV is c/o MSD Partners, L.P.,
645 Fifth Avenue, 21st Floor, New York, NY 10022. |
(28) |
Consists of 500,000 Class A Shares held by PFMO4 LLC, a Delaware limited liability company. Richard Perry,
as manager of PFM04 LLC, may be deemed to have voting and investment power over the PIPE Securities and thus may be deemed to indirectly beneficially own the shares held by PFM04 LLC. The address of PFMO4 LLC is c/o 2912 Advisors LP, 405 Lexington
Avenue, 34th Fl, New York, New York 10174. |
(29) |
Consists of 3,600,088 Class A Shares (2,600,000 of which are being offered by this prospectus) held by
Shotfut Menayot Chool Phoenix Amitim. The address of Shotfut Menayot Chool Phoenix Amitim is 53 Derech HaShalom St, Givatayim, Israel. 5345433. |
(30) |
Consists of 995,000 shares held by Suvretta Master Fund, Ltd., a Cayman Islands exempted company, and 5,000
shares held by Suvretta Long Master Fund, Ltd., a Cayman Islands exempted company. Aaron Cowen as control person of Suvretta Capital Management, LLC, the investment manager of Suvretta Master Fund, Ltd. and Suvretta Long Master Fund, Ltd. may be
deemed to beneficially own the shares held by them. The address of the foregoing entities is 540 Madison Ave, 7th Floor New York, NY 10022. |
(31) |
Consists of 1,333,333 Class A Shares held by TOMS Capital Investments LLC, a Delaware limited liability
company (TOMS), and 666,667 Class A Shares held by TCIM Opportunities I Ltd., a Cayman Islands exempted company (TCIM). Benjamin Pass is the CIO of TOMS Capital Investment Management LP, the investment manager of the
TOMS and TCIM. The address of TOMS Capital Investment Management LP is c/o TOMS Capital Investment Management LP, 450 West 14th Street, 13th Floor, New York, NY 10014. |
(32) |
Consists of 192,208 Class A Shares (including 16,874 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(33) |
Consists of 768,839 Class A Shares (including 67,500 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(34) |
Consists of 384,419 Class A Shares (including 33,750 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). The Trustee of Moore Management Trust is Ardon E. Moore. The address of the Selling Holder is 201 Main Street Suite 3200, Fort Worth, TX 76102. |
(35) |
Consists of 592,774 Class A Shares (including 52,042 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(36) |
Consists of 392,005 Class A Shares (including 34,416 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(37) |
Consists of 63,673,188 Class A Shares (including 5,590,164 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). The address of the Selling Holder is 25/F Hysan Place, 500 Hennessy Cause Way Bay, HKG. |
(38) |
Consists of 38,792,761 Class A Shares (including 3,405,796 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). The address of the Selling Holder is 121 South Main Street, 9th Floor, Providence, RI 02903. |
(39) |
Consists of 51,255 Class A Shares (including 4,500 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(40) |
Consists of 3,844,197 Class A Shares (including 337,500 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). |
(41) |
Consists of 25,627 Class A Shares (including 2,250 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
147
(42) |
Consists of 140,388 Class A Shares (including 12,324 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(43) |
Consists of 12,813,992 Class A Shares (including 1,125,000 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). |
(44) |
Consists of 256,279 Class A Shares (including 22,500 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). The Trustee of the Donald and Catherine Marron Charitable Trust is Catherine C. Marron. The address of the Selling Holder is 595 Madison Ave, 24th Floor, New York, NY 10022.
|
(45) |
Consists of 1,281,399 Class A Shares (including 112,500 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). |
(46) |
Consists of 384,419 Class A Shares (including 33,750 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(47) |
Consists of 128,139 Class A Shares (including 11,250 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(48) |
Consists of 96,103 Class A Shares (including 8,436 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(49) |
Consists of 19,220,989 Class A Shares (including 1,687,500 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). The address of the Selling Holder is c/o Newlight Partners LP, 320 Park Avenue, New York, NY 10022. |
(50) |
Consists of 128,139 Class A Shares (including 11,250 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(51) |
Consists of 512,559 Class A Shares (including 45,000 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(52) |
Consists of 3,075,358 Class A Shares (including 270,000 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). The address of the Selling Holder is 201 Main Street Suite 3200 6102. |
(53) |
Consists of 768,839 Class A Shares (including 67,500 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). The address of the Selling Holder is 201 Main Street Suite 3200, Fort Worth, TX 76102. |
(54) |
Consists of 1,922,098 Class A Shares (including 168,750 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). |
(55) |
Consists of 3,203,498 Class A Shares (including 281,250 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). The address of the Selling Holder is 38955 Hills Tech Drive, Farmington, MI 48331. |
(56) |
Consists of 256,279 Class A Shares (including 22,500 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions). |
(57) |
Consists of 16,017,491 Class A Shares (including 1,406,250 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). |
(58) |
Consists of 128,139 Class A Shares (including 11,250 Class A Shares issued upon conversion of Seller
Earnout Shares subject to certain vesting conditions) held by W2M2H, LLC. Joseph S. Monaco is the manager of W2M2H, LLC. The address of the Selling Holder is 321 South Main Street, Suite 550, Providence, RI 02903. |
(59) |
Consists of 1,281,399 Class A Shares (including 112,500 Class A Shares issued upon conversion of
Seller Earnout Shares subject to certain vesting conditions). |
(60) |
Consists of 79,628 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 6,990 Common Units and an equal number of Class C Shares issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting conditions).
|
(61) |
Consists of 565,762 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 49,670 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
148
(62) |
Consists of 512,559 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 45,000 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(63) |
Consists of 128,139 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 11,250 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(64) |
Consists of 1,116,646 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 98,034 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is 600 University Street, Suite 3247, Seattle, WA 98101. |
(65) |
Consists of 32,034 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 2,812 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(66) |
Consists of 695,696 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 61,078 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(67) |
Consists of 176,166 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 15,466 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(68) |
Consists of 1,281,399 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 112,500 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is 6810 South Minnesota Avenue Suite 103 Sioux Falls, SD 57108. |
(69) |
Consists of 227,905 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 20,008 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is c/o East End Advisors LLC, 610 Fifth Avenue 5th Floor, New York, NY 10020. |
(70) |
Consists of 1,018,710 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 89,436 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(71) |
Consists of 922,607 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 81,000 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(72) |
Consists of 256,279 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 22,500 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(73) |
Consists of 384,419 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 33,750 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
149
(74) |
Consists of 51,255 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 4,500 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(75) |
Consists of 2,405,003 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 211,146 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(76) |
Consists of 1,848,874 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 162,320 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is c/o East End Advisors LLC, Attn: David R. Salomon, 610 Fifth Avenue 5th Floor, New York, NY 10020. |
(77) |
Consists of 128,139 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 11,250 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(78) |
Consists of 128,139 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares. (including 11,250 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(79) |
Consists of 192,208 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 16,874 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is TAG Associates LLC 810 7th Avenue 7th Floor, New York, NY 10019. |
(80) |
Consists of 704,768 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 61,874 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is 595 Madison Ave., 24th Floor, New York, NY 10022. |
(81) |
Consists of 256,279 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 22,500 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). Merrick R. Kleeman is the Trustee of the Merrick R. Kleeman 2016 Irrevocable Trust. The address of the Selling Holder is 18 Rocky Point Road Rowayton, CT 06853. |
(82) |
Consists of 128,139 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 11,250 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(83) |
Consists of 192,208 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 16,874 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(84) |
Consists of 384,419 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 33,750 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(85) |
Consists of 256,279 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 22,500 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units
|
150
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subject to certain vesting conditions). The address of the Selling Holder is c/o TAG Associates, LLC, 810 Seventh Avenue 7th Floor, New York, NY 10019. |
(86) |
Consists of 41,721,673 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 3,662,938 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(87) |
Consists of 203,740 Class A Shares issued or issuable up upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 17,886 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(88) |
Consists of 3,587,918 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 315,000 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(89) |
Consists of 805,450 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 70,714 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is c/o East End Advisors LLC 610 Fifth Avenue 5th Floor, Attn: Richard E. Salomon, New York, NY 10020. |
(90) |
Consists of 659,004 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 57,856 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The Trustee of RES Revocable Trust is Richard E. Salomon. The address of the Selling Holder is c/o East End Advisors LLC, 610 Fifth Avenue 5th Floor, Attn: Richard E. Salomon, New York, NY 10020. |
(91) |
Consists of 265,431 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 23,302 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(92) |
Consists of 384,419 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 33,750 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(93) |
Consists of 203,740 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 17,886 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(94) |
Consists of 137,291 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 12,052 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). The address of the Selling Holder is c/o East End Advisors LLC, 610 Fifth Avenue 5th Floor, Attn: Richard E. Salomon, New York, NY 10020. |
(95) |
Consists of 4,805,246 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 421,874 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(96) |
Consists of 25,000 Class A Shares held directly by Kevin Beebe, a U.S. citizen. The address of the Selling
Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(97) |
Consists of 25,000 Class A Shares held directly by Payne Brown, a U.S. citizen. The address of the Selling
Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(98) |
Consists of 25,000 Class A Shares held directly by Rick Jelinek, a U.S. citizen. The address of the
Selling Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
151
(99) |
Consists of 25,000 Class A Shares held directly by Roma Khanna, a U.S. citizen. The address of the Selling
Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(100) |
Consists of 25,000 Class A Shares held directly by John Kim, a U.S. citizen. The address of the Selling
Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(101) |
Consists of 25,000 Class A Shares held directly by Michael Rubenstein, a U.S. citizen. The address of the
Selling Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(102) |
Consists of 25,000 Class A Shares held directly by Vijay Sondhi, a U.S. citizen. The address of the
Selling Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(103) |
Consists of 25,000 Class A Shares held directly by Michael Vorhaus, a U.S. citizen. The address of the
Selling Holder is 40 West 57th Street, 33rd Floor, New York, NY 10019. |
(104) |
Consists of 4,385,625 Class A Shares held directly by Altimar Sponsor LLC. These 4,835,625 Class A
Shares do not include the 5,000,000 shares that were issued or will be issuable upon exercise of the Private Placement Warrants held by Altimar Sponsor LLC. Altimar Sponsor is controlled by HPS Partners LLC. The address of the Selling Holder is 40
West 57th Street, 33rd Floor, New York, NY 10019. |
(105) |
Consists of (i) 443,286,854 Class A Shares issued or issuable upon the sale of Class C Shares issued
or issuable upon the exchange of Common Units and cancellation of an equal number of Class D Shares currently outstanding and (ii) 44,069,244 Class A Shares issued or issuable upon the conversion of Seller Earnout Units subject to certain
vesting conditions. The address of the Selling Holder is 1290 Avenue of the Americas, New York, NY 10104. |
(106) |
Consists of (i) 161,847,700 Class A Shares issued or issuable upon the sale of Class B Shares
issuable to Owl Rock Feeder on behalf of Owl Rock Capital Partners LP upon the exchange of Common Units and cancellation of an equal number of Class D Shares currently outstanding, (ii) 13,545,000 Class A Shares issued or issuable upon the
sale of Class B Shares issuable to Owl Rock Feeder on behalf of Owl Rock Capital Partners LP upon the exchange of Common Units and cancellation of an equal number of Class D Shares issued or issuable in respect of Seller Earnout Units upon
the satisfaction of certain vesting conditions, (iii) 107,540,000 Class A Shares issued or issuable to Owl Rock Feeder on behalf of Dyal Fund IV upon the exchange of Common Units and cancellation of an equal number of Class C Shares
currently outstanding and (iv) 9,000,000 Class A Shares issued or issuable to Owl Rock Feeder on behalf of Dyal Fund IV upon the exchange of Common Units and cancellation of an equal number of Class C Shares issued or issuable in respect
of Seller Earnout Units upon the satisfaction of certain vesting conditions. The address of the Selling Holder is 399 Park Avenue, 38th Floor, New York, NY 10022. |
(107) |
Consists of (i) 132,808,673 Class A Shares issued or issuable upon the sale of Class B Shares
issuable to Dyal Capital SLP LP on behalf of the Dyal Principals upon the exchange of Common Units and cancellation of an equal number of Class D Shares currently outstanding and (ii) 10,930,754 Class A Shares issued or issuable upon the
sale of Class B Shares issuable to Dyal Capital SLP LP on behalf of the Dyal Principals upon the exchange of Common Units and cancellation of an equal number of Class D Shares issued or issuable in respect of Seller Earnout Units upon the
satisfaction of certain vesting conditions. The address of the Selling Holder is 399 Park Avenue, 38th Floor, New York, NY 10022. |
(108) |
Consists of 1,990,744 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 174,776 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
(109) |
Consists of 3,806,395 Class A Shares issued or issuable upon the exchange of Common Units and the
cancellation of an equal number of Class C Shares (including 334,180 Common Units and an equal number of Class C Shares issued or issuable to the Selling Holder upon the conversion of Seller Earnout Units subject to certain vesting
conditions). |
152
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Blue Owl Related Person Transactions
Investor
Rights Agreement
At the Closing of the Business Combination, Blue Owl, Altimar Sponsor, the Altimar Founders, certain of the Owl
Rock Equityholders and the Dyal Equityholders and certain other parties thereto entered into the Investor Rights Agreement.
The Investor
Rights Agreement provided for an initial nine-person board of directors, consisting of (i) three individuals to be designated by the Owl Rock Principals, which initially include Doug Ostrover, Marc Lipschultz and one other individual to be
designated by the Owl Rock Principals, (ii) two individuals designated by the Dyal Principals, which initially include Michael Rees and Sean Ward, (iii) one individual designated by Neuberger and (iv) three independent directors
selected by a majority of the Key Individuals. The Oak Street Investor Rights Agreement (discussed below) expanded the board of directors to 10 members upon consummation of the Oak Street Acquisition. Neuberger has certain continued nomination
rights for one director while they maintain in excess of certain ownership percentages, as determined in accordance with the Investor Rights Agreement, and the Owl Rock Principals and Dyal Principals have severally agreed on an individual basis with
Blue Owl to take actions to approve such nominations. Blue Owl has qualified as, and has elected to be treated as, a controlled company within the meaning of the NYSE rules at the Closing, and has agreed to certain covenants in accordance therewith.
Pursuant to the Investor Rights Agreement, the Board has delegated
day-to-day management of Blue Owl and its subsidiaries, subject to certain limitations (including as noted below), to an Executive Committee consisting
initially of the Owl Rock Principals and Dyal Principals. Certain actions of the Executive Committee require the unanimous consent of the Key Individuals.
The Investor Rights Agreement provides that certain material actions of Blue Owl and/or its subsidiaries require approval of its Board, the
Executive Committee and/or, until certain ownership thresholds are no longer maintained or (in some cases) an applicable time period has not expired, Neuberger.
The Investor Rights Agreement also provides Neuberger with certain preemptive rights with respect to future equity offerings by Blue Owl, Blue
Owl Holdings, Blue Owl Carry and their subsidiaries, subject to certain exceptions, such as for equity issued as part of an underwritten public offering for cash or as acquisition consideration to unrelated third parties. Neuberger also has certain
information rights and confidentiality obligations under the Investor Rights Agreement.
The parties to the Investor Rights Agreement have
agreed (subject to exceptions for permitted transfers) to the following Lock-Up Periods: (i) in the case of Owl Rock Principals and Dyal Principals, 24 months from Closing; (ii) in the case of
Altimar Sponsor and the Altimar Founders, 12 months from Closing; and (iii) in the case of all other parties thereto, six months from the Closing. Notwithstanding the foregoing, 40% of the equity issued to Owl Rock Feeder, which is attributable
to a person other than the Owl Rock Principals, will be released from the lock-up six months from Closing. The Seller Earnout Shares and the Seller Earnout Units received by the parties thereto are
also subject to lock-up until the later of the date the holder thereof is otherwise subject to a lock-up with respect to its other equity securities
and the date such shares or units have vested, as described above.
Under the terms of the Investor Rights Agreement, Blue Owl, Blue Owl
Holdings and Blue Owl Carry grant the Owl Rock Equityholders and the Dyal Equityholders certain customary demand, shelf and piggyback registration rights. Blue Owl also grants the Altimar Founders certain customary shelf and piggyback registration
rights.
153
Oak Street Investor Rights Agreement
Effective upon the consummation of the Oak Street Acquisition pursuant to the terms of the Oak Street Acquisition Agreement, Blue Owl, Blue Owl
GP, Blue Owl Holdings LP, Blue Owl Carry LP, each of Douglas Ostrover, Marc Lipschultz and Michael Rees (the Key Individuals) and Marc Zahr entered into an Investor Rights Agreement (the Oak Street Investor Rights Agreement).
The Oak Street Investor Rights Agreement provides, among other things, that Blue Owl, each of the Key Individuals and Marc Zahr shall take all Necessary Action (as defined under the Oak Street Investor Rights Agreement) to elect Marc Zahr as a
member of the Board and executive committee of Blue Owl, and Mr. Zahr will enter into a contractual lock-up with respect to Blue Owl common stock or Common Units held by Mr. Zahr and his affiliated
entities.
Oak Street Registration Rights Agreement
Upon consummation of the Oak Street Acquisition, pursuant to the Oak Street Acquisition Agreement, Blue Owl, the holders party thereto,
including Mr. Zahr and Augustus, entered into a Registration Rights Agreement (the Oak Street Registration Rights Agreement), that provides each of the holder parties, including Mr. Zahr and Augustus, with certain registration
rights. The Oak Street Registration Rights Agreement will, among other things, require Blue Owl to use its reasonable best efforts to file a resale shelf registration statement in the future registering each Holders (as defined under
Registration Rights Agreement) resale of the shares of Blue Owls common stock and will provide each Holder with certain customary piggyback registration rights with respect to such shares of common stock, subject to the limitations set forth
therein.
Exchange Agreement
At the Closing of the Business Combination, Blue Owl GP, Blue Owl Holdings, Blue Owl Carry, Blue Owl and the holders of Common Units entered
into the Exchange Agreement. The Exchange Agreement provides that such holders, subject to any applicable transfer restrictions (including restrictions on Seller Earnout Securities and applicable Lock-Up
Periods), may (subject to the terms of the Exchange Agreement) exchange an equal number of Common Units and cancel an equal number of Class C Shares or Class D Shares, as applicable, for an equal number of Class A Shares or
Class B Shares, as applicable, or cash. Under certain circumstances, an exchange committee to be established by Blue Owl GP may elect on behalf of Blue Owl Holdings and Blue Owl Carry to pay holders of Common Units a cash payment in lieu of
delivery of Class A Shares or Class B Shares described in the foregoing sentence, with such cash payment equal to the five-day volume weighted average price of Class A Shares immediately prior
to the applicable exchange date. A holder must exchange at least 10,000 Common Units in each Exchange, unless such holder owns a lesser amount of such units and is exchanging all of the Common Units held by them at such time.
The Exchange Agreement contains restrictions on the timing and amount of Exchanges of the Common Units that are intended to prevent either of
the Blue Owl Operating Partnerships from being treated as a publicly traded partnership for U.S. federal income tax purposes; such restrictions are modeled on certain safe harbors provided for under applicable U.S. federal income tax
law. Blue Owl GP may also impose additional restrictions on exchanges that Blue Owl or Blue Owl GP determines to be necessary or advisable so that neither of the Blue Owl Operating Partnerships is treated as a publicly traded partnership
for U.S. federal income tax purposes.
Tax Receivable Agreement
The Blue Owl Operating Partnerships have made an election under Section 754 of the Code for the taxable year in which the Business
Combination occurs, and such election will remain in effect for any future taxable year in which an exchange of Common Units for Class A and Class B Shares (or cash) under the Exchange Agreement occurs. Such elections have resulted in
increases to the tax basis of the assets of the Blue Owl Operating Partnerships at the time of the Business Combination transactions and are expected to result in such increases for any future exchange of Common Units for Class A and
Class B Shares (or cash) under the
154
Exchange Agreement. Additionally, we have acquired from certain of the Owl Rock Equityholders certain corporations formed to hold interests in Owl Rock and are therefore entitled to utilize
certain tax attributes of such corporations and are also entitled to utilize other tax attributes of the Blue Owl Operating Partnerships as a result of the Business Combination. Such increases in the tax basis of the tangible and intangible assets
of the Blue Owl Operating Partnerships, as well as these other tax attributes, have reduced the amount of tax that Blue Owl or Blue Owl GP would otherwise be required to pay in the future. Such increases in tax basis and other tax attributes have
also decreased gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The IRS may challenge all or part of the tax basis increase, other tax attributes, and
associated increased deductions, and a court could sustain such a challenge.
At the Closing of the Business Combination, we entered into
the Tax Receivable Agreement with the Owl Rock Equityholders and Dyal Equityholders (the TRA Recipients) that provides for the payment by Blue Owl GP to the TRA Recipients of 85% of the amount of cash tax savings, if any, in U.S.
federal, state, local and non-U.S. income tax that we actually realize (or are deemed to realize in the case of an early termination payment by us or a change in control, as discussed below) as a result of the
increases in tax basis, existing tax attributes, and certain other tax benefits related to our entering into the Tax Receivable Agreement, as described above. This payment obligation is the obligation of Blue Owl GP and not the obligation of the
Blue Owl Operating Partnerships. We will benefit from the remaining 15% of cash tax savings, if any, that we realize as a result of such tax attributes. For purposes of the Tax Receivable Agreement, the cash tax savings have been computed by
comparing our actual income tax liability to the amount of such taxes that we would have been required to pay had there been no increase to the tax basis of our assets as a result of the Business Combination or the exchanges and no other existing
tax attributes (as described above) and had we not entered into the Tax Receivable Agreement (calculated by making certain assumptions).
The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired, unless we exercise our right
to terminate the Tax Receivable Agreement for an amount based on the present value of the agreed payments remaining to be made under the agreement (as described in more detail below), there is a change of control (as described in more detail below)
or we breach any of our material obligations under the Tax Receivable Agreement, in which case all obligations will generally be accelerated and due as if we had exercised our right to terminate the Tax Receivable Agreement. Estimating the amount of
payments that may be made under the Tax Receivable Agreement is by its nature imprecise, as the calculation depends on a variety of factors. The actual increase in tax basis of the assets of the Blue Owl Operating Partnerships, as well as the amount
and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including:
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the timing of exchanges of Common Units for our Class A and Class B Shares (or cash) under the Exchange
Agreementfor instance, the increase in any tax deductions will vary depending on the fair value, which may fluctuate over time, of the relevant Common Units at the time of each exchange; |
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the price of our Class A Shares and Class B Shares at the time of the exchangethe increase in any
tax deductions, as well as the tax basis increase in other assets or other tax attributes, is proportional to the price of our Class A Shares and Class B Shares at the time of the exchange; |
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the extent to which such exchanges are taxableif an exchange is not taxable for any reason, an increase in
the tax basis of the assets of the Blue Owl Operating Partnerships (and thus increased deductions) may not be available as a result of such exchange; and |
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the amount and timing of our incomewe will be required to pay 85% of the cash tax savings, if any, as and
when realized. |
If we do not have taxable income (determined without regard to the tax basis and other tax attributes
that are subject to the Tax Receivable Agreement), we will generally not be required (absent a change of control or other circumstances requiring an early termination payment) to make payments under the Tax Receivable Agreement for that taxable year
because no cash tax savings will have been actually realized. However, any cash tax savings
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that do not result in realized benefits in a given tax year may generate tax attributes that may be utilized to generate benefits in future tax years (with possibly some carry back potential to
prior tax years for certain tax purposes). The utilization of such tax attributes will result in payments under the Tax Receivable Agreement.
Future payments under the Tax Receivable Agreement in respect of subsequent exchanges of Common Units for our Class A and Class B
Shares (or cash) under the Exchange Agreement are expected to be substantial. It is possible that future transactions or events could increase or decrease the actual cash tax savings realized and the corresponding payments under the Tax Receivable
Agreement. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the Tax Receivable Agreement exceed the actual cash tax savings we realize in respect of the tax attributes
subject to the Tax Receivable Agreement and/or distributions to us by the Blue Owl Operating Partnerships are not sufficient to permit the Blue Owl GP to make payments under the Tax Receivable Agreement after it has paid taxes. The payments under
the Tax Receivable Agreement are not conditioned upon the TRA Recipients continued ownership of us or the Blue Owl Operating Partnerships.
In addition, the Tax Receivable Agreement provides that upon a change of control, our obligations under the Tax Receivable Agreement would be
accelerated as if we had exercised our early termination right based on certain assumptions, (as described below) including that we would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and
tax basis and other benefits related to entering into the Tax Receivable Agreement.
Furthermore, we may elect to terminate the Tax
Receivable Agreement early by making an immediate payment equal to the present value of the anticipated future cash tax savings. In determining such anticipated future cash tax savings, the Tax Receivable Agreement includes several assumptions,
including (1) that any Common Units that have not been exchanged are deemed exchanged for the market value of our Class A and Class B Shares and the amount of cash that would have been transferred if the exchange had occurred at the
time of termination, (2) we will have sufficient taxable income in each future taxable year to fully utilize all relevant tax attributes subject to the Tax Receivable Agreement, (3) the tax rates for future years will be those specified in
the law as in effect at the time of termination, and (4) certain non-amortizable, non-deductible assets are deemed disposed of within specified time periods. In
addition, the present value of such anticipated future cash tax savings are discounted at a rate equal to the lesser of (i) 6.5% and (ii) LIBOR plus 100 basis points.
As a result of the change in control provisions and the early termination right, we could be required to make payments under the Tax
Receivable Agreement that are greater than or less than 85% of the actual cash tax savings that we realize in respect of the tax attributes subject to the Tax Receivable Agreement. In these situations, our obligations under the Tax Receivable
Agreement could have a substantial negative impact on our liquidity.
Decisions made in the course of running our businesses may influence
the timing and amount of payments that are received by the TRA Recipients under the Tax Receivable Agreement. For example, the earlier disposition of assets following an exchange or acquisition transaction will generally accelerate payments under
the Tax Receivable Agreement and increase the present value of such payments, and the disposition of assets before an exchange or acquisition transaction will increase the tax liability of an exchanging holder without giving rise to any rights to
payments under the Tax Receivable Agreement.
Payments under the Tax Receivable Agreement are based on the tax reporting positions that we
will determine. Although we are not aware of any issue that would cause the IRS to challenge an increase in the tax basis of the assets of the Blue Owl Operating Partnerships that would otherwise be subject to the Tax Receivable Agreement, we will
not be reimbursed for any payments previously made under the Tax Receivable Agreement with respect to a tax basis increase that is successfully challenged. As a result, in certain circumstances, payments could be made under the Tax Receivable
Agreement in excess of our cash tax savings.
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Blue Owl Limited Partnership Agreements
In connection with the Closing of the Business Combination, Blue Owl Holdings and Blue Owl Carry each entered into their respective Blue Owl
Limited Partnership Agreements, which, among other things, permit the issuance and ownership of Blue Owl Holdings Common Units and Blue Owl Carry Common Units as contemplated to be issued and owned upon the consummation of the Business Combination,
admit Blue Owl GP as the general partner of Blue Owl Holdings and Blue Owl Carry, and otherwise amend and restate the rights and preferences of the Blue Owl Holdings Common Units and the Blue Owl Carry Common Units set forth therein. A portion of
the Common Units consist of Seller Earnout Units, as further described herein.
Subject to certain limitations, Blue Owl GP, as the
general partner of each of the Blue Owl Operating Partnerships, will have the sole authority to manage the Blue Owl Operating Partnerships in accordance with the Blue Owl Limited Partnership Agreements and applicable law, provided that (i) such
authority is subject to the consent rights of Neuberger described below and (ii) Blue Owl GP is not permitted to override the rights or protections of Blue Owl, its governing bodies and its stockholders pursuant to our certificate of
incorporation, the Investor Rights Agreement or any agreement binding on Blue Owl.
Each of the Blue Owl Operating Partnerships has an
identical number of Common Units outstanding which are held, in each such entity and in the same proportion, by the same persons. Further, subject to certain exceptions and limitations, the Blue Owl Limited Partnership Agreements permit the
applicable Blue Owl Operating Partnership, Blue Owl GP and Blue Owl to undertake all actions necessary to maintain the one-to-one ratios between (i) the number of
units in each of the applicable Blue Owl Operating Partnerships held by Blue Owl GP and the number of Class A Shares and Class B Shares issued and outstanding and (ii) the number of Blue Owl Holdings Common Units, the number of Blue
Owl Carry Common Units and the number of Class C Shares or Class D Shares, as applicable, held by any person.
Pursuant to the
Blue Owl Limited Partnership Agreements, except with respect to tax distributions described below, Blue Owl GP has the right to determine when distributions will be made to the partners of the Blue Owl Operating Partnerships (including
to Blue Owl GP, with respect to its economic general partner interest in the Blue Owl Operating Partnerships) and the amount of any such distributions, provided that (i) any such distribution is made to all of the partners pro rata in
accordance with their respective ownership of Common Units and (ii) any distribution (other than a tax distribution described below) otherwise payable with respect to a Seller Earnout Unit for which a Triggering Event has not yet
occurred will be held back and reserved by the applicable Blue Owl Operating Partnership.
If a Triggering Event occurs with respect to a
Seller Earnout Unit with an amount reserved pursuant to the preceding sentence, such reserved amount will be paid to the holder of such Seller Earnout Unit. If a Triggering Event has not occurred with respect to a Seller Earnout Unit prior to the
fifth anniversary of the Closing, then (i) the cumulative amount of distributions reserved for such Seller Earnout Unit (if any) will be released back to the applicable Blue Owl Operating Partnership and (ii) such Seller Earnout Unit will
be forfeited and cancelled for no consideration.
The Blue Owl Limited Partnership Agreements provide for mandatory tax
distributions to the partners of the Blue Owl Operating Partnerships if the taxable income of the relevant Blue Owl Operating Partnership gives rise to taxable income for its partners. Generally, these tax distributions are computed based on
an estimate of the net taxable income of the relevant entity multiplied by an assumed tax rate, equal to the highest combined maximum marginal U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New
York, New York.
The Common Units are subject to a post-Closing Lock-Up Period during which such
units cannot be transferred (including by way of Exchange), other than to certain permitted transferees under certain conditions. The Lock-Up Period for Common Units held by the Owl Rock Principals and the
Dyal Principals ends on the 24
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month anniversary of the Closing (or until a Triggering Event occurs, if later, in the case of Seller Earnout Units). Subject to the aforementioned restrictions during the applicable Lock-Up Period, the Common Units may be exchanged by the holder for Class A Shares or Class B Shares, as described under the subsection entitled Exchange Agreement above.
The Blue Owl Limited Partnership Agreements also provide Neuberger with the same rights it has under the Investor Rights Agreement with
respect to Blue Owl and its subsidiaries, including preemptive rights on certain future equity issuances, consent rights on certain material matters and the right to receive information with respect to the Blue Owl Operating Partnerships, as is more
fully described under the subsection entitled Investor Rights Agreement above.
On October 22, 2021, we amended
the 2021 Omnibus Plan and the Blue Owl Limited Partnership Agreements (as amended, the Second Amended and Restated Blue Owl Limited Partnership Agreements) of the Blue Owl Partnerships to increase the share limit under the 2021 Omnibus
Plan and to allow for the issuance, from time to time of certain Incentive Units to Blue Owl MV, a vehicle formed for the benefit of certain management employees of Blue Owl, by Blue Owl Carry and Blue Owl Holdings, which Incentive Units issuances
would be in addition to the issuance of certain Restricted Stock Units (RSUs and, together with the Incentive Units, the Awards). The Incentive Units entitle the recipient to receive, through Blue Owl MV, distributions from
either Blue Owl Holdings or Blue Owl Carry in accordance with the terms of, and subject to any restrictions contained in, the applicable limited partnership agreement for each of Blue Owl Carry, Blue Owl Holdings and Blue Owl MV, and will be counted
against the share limit under the Plan on a 1.25:1.00 basis.
In addition to any awards that it may grant on an ongoing basis, Blue Owl
expects to make grants pursuant to the 2021 Omnibus Plan under annual or year-end incentive programs, including grants of Incentive Units and / or RSUs pursuant to the 2021 Omnibus Plan to its executive
officers on an annual basis on or around December or January of each year, including certain of its NEOs. Any Incentive Units or RSUs granted by Blue Owl under such programs will be subject to time vesting, and if the recipients employment or
service is terminated by Blue Owl without cause or due to death or disability, the plan administrator has discretion to accelerate and vest any unvested Incentive Units or RSUs, as applicable, upon such termination, and, upon any other termination,
any unvested Incentive Units or RSUs, as applicable, will be immediately terminated and forfeited for no consideration. Upon a Change in Control (as defined in the 2021 Omnibus Plan), the vesting of all or a portion of any unvested Incentive Units
may be accelerated in the discretion of the plan administrator and the treatment of any unvested RSUs will be determined in accordance with the terms of the 2021 Omnibus Plan. Awards under such programs will vest over three to five years, subject to
continued employment by, or service to, Blue Owl on each applicable vesting date. The Incentive Units will be settled by delivery of an equal number of Common Units of the Blue Owl Partnerships and either Class C or Class D Shares of Blue
Owl, as applicable, upon the vesting and liquidation of such Incentive Units, and the RSUs will be settled by delivery of an equal number of Class A Shares of Blue Owl. The Incentive Units or RSUs will be subject to other conditions set forth
in the award agreement, such as, for the Incentive Units, specified minimum ownership terms and, for both Incentive Units and RSUs, compliance with the recipients applicable restrictive covenant obligations.
Dyal Fund IVs Investment in Owl Rock
Prior to the Business Combination, Dyal Fund IV owned a 20% interest in Owl Rock and continues to own Blue Owl interests issued in respect
of such interests. One of Blue Owls controlled affiliates is the investment adviser to Dyal Fund IV. The management fees payable by Dyal Fund IV to the Blue Owl-controlled adviser were
established as part of the offering of interests in Dyal Fund IV to its investors, and the calculation of such fees is not being modified because Blue Owl is both an investment of, and the adviser, to Dyal Fund IV.
Neuberger Berman, certain employees of Dyal and of Neuberger Berman and certain investors in Blue Owl are entitled to receive distributions of
carried interest attributable to Dyal Fund IV. Such carried interest
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distributions may include profits generated by the performance of Blue Owl. As Blue Owl does not own carried interest in respect of Dyal Fund IV, Blue Owl will not be entitled to receive any
distributions of carried interest attributable to Dyal Fund IV.
Investments by Related Parties in our Funds
As of December 31, 2021, our assets under management include approximately $1.9 billion related to executives and other employees and
approximately $1.0 billion related to other related parties. A portion of these assets under management relate to accrued carried interests, as well as investments that are not charged fees.
Family Relationships
Dyal has certain
employees who are related to our executive officers. In 2020, the founder and head of Dyal had a related party employed by Dyal who earned total compensation above $120,000. The employees compensation and benefits are consistent with total
compensation and benefits provided to other employees of the same level with similar responsibilities.
Transition Services Agreement between Blue Owl
and Neuberger Berman
At the Closing of the Business Combination, Blue Owl entered into a Transition Services Agreement with Neuberger
(the Transition Services Agreement), pursuant to which Neuberger has agreed to provide certain transition services, including, among other things, the sublease of Dyal office space at 1290 Avenue of the Americas, New York, New York. Blue
Owl will reimburse Neuberger for certain third party expenses incurred by Neuberger in connection with providing the transition services.
Use of
Private Aircraft
Blue Owl may make use of aircraft owned by its related parties for business purposes in the ordinary course of its
operations and in accordance with any applicable travel policy. Blue Owl will reimburse such related parties for this use based on current market rates which will generally be determined based on a comparable quote from a third-party charter
company. The reimbursement may be recovered from a Blue Owl fund to the extent such reimbursement is eligible under such funds agreements and in accordance with applicable policies and procedures. Blue Owl will not bear any operating,
personnel or maintenance costs associated with the aircraft. Personal use of the aircraft will not be charged to Blue Owl. The Company recorded expenses for aircraft reimbursements of $0.6 million for the year ended December 31, 2021.
Related Person Transaction Policy
Blue
Owls Board adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.
A Related Person Transaction is a transaction, arrangement or relationship or any series of similar transactions, arrangements, or
relationships, in which Blue Owl or any of its subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000 in any fiscal year, and in which any related person had, has or will have a direct or indirect material
interest. In the future, our executive officers, other employees and directors may make similar investments in our products in the ordinary course.
A Related Person means:
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any person who is, or was (since the beginning of the last fiscal year for which Blue Owl has filed an Annual
Report on Form 10-K and proxy statement, even if such person does not presently serve in that role), one of Blue Owls executive officers or a member, or nominee for director, of the Blue Owl Board;
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any person who is known by Blue Owl to be the beneficial owner of more than five percent (5%) of our voting
stock; |
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any immediate family member of any of the foregoing persons, which means any child, stepchild, parent,
stepparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than five percent (5%) of our voting stock,
and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than five percent (5%) of our voting stock; |
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any entity in which any of the foregoing persons serves as an executive officer or principal or in a similar
position, or in the case of a partnership, serves as a general partner or holds any positions other than that of a limited partner; |
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any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a
similar position or in which such person or together with any of the foregoing persons, has a 10 percent (10%) or greater beneficial ownership interest; or |
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an entity at which any of the foregoing persons above is employed if (a) the person is directly involved in
the negotiation of the Related Party Transaction or will have or share primary responsibility at such entity for the performance of the Related Party Transaction or (b) the persons compensation from the entity is directly tied to the
Related Party Transaction. |
Blue Owl has policies and procedures designed to minimize potential conflicts of interest
arising from any dealings it may have with its affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time. For example, Blue Owl has a Code of Business Conduct
and Ethics that generally prohibits officers or directors of Blue Owl from engaging in any transaction where there is a conflict between such individuals personal interest and the interests of Blue Owl. Waivers to the Code of Business Conduct
and Ethics will generally only be obtained from the audit committee, or if for an executive officer, by the Board, and are publicly disclosed as required by applicable law and regulations. In addition, the audit committee will be required to review
and approve all related-party transactions (as defined in Item 404 of Regulation S-K).
Indemnification
Upon the consummation of
the Business Combination, we entered into indemnification agreements with each of the newly elected directors and newly appointed executive officers which provide that we will indemnify such directors and executive officers under the circumstances
and to the extent provided for therein, from and against all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any
and all threatened, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, and including appeals, in which he or she may be involved, or is threatened
to be involved, as a party or otherwise, to the fullest extent permitted under Delaware law and our bylaws.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of our common stock
issued pursuant to this offering by non-U.S. holders (as defined below). This discussion is limited to certain U.S. federal income tax considerations to beneficial owners of our common stock that will hold our
common stock as capital assets within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the Code). This discussion assumes that any distributions made by us on our common stock and any consideration
received by a holder in consideration for the sale or other disposition of our common stock will be in U.S. dollars.
This summary is based upon U.S.
federal income tax laws as of the date of this registration statement, which is subject to change or differing interpretation, possibly with retroactive effect. This discussion is a summary only and does not describe all of the tax consequences that
may be relevant to you in light of your particular circumstances. In particular, this discussion does not address the effects of the alternative minimum tax, the Medicare tax on certain net investment income, the effects of Section 451 of the
Code, or the different consequences that may apply if you are subject to special rules that apply to certain types of investors, including but not limited to:
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financial institutions or financial services entities; |
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governments or agencies or instrumentalities thereof; |
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regulated investment companies; |
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real estate investment trusts; |
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expatriates or former long-term residents of the United States; |
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persons that actually or constructively own five percent or more (by vote or value) of our shares;
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persons that acquired our common stock pursuant to an exercise of employee share options, in connection with
employee share incentive plans or otherwise as compensation; |
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dealers or traders subject to a
mark-to-market method of accounting with respect to our common stock or warrants; |
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persons holding our common stock as part of a straddle, constructive sale, hedge, conversion or other
integrated or similar transaction; |
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U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
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partnerships (or entities or arrangements classified as partnerships or other pass-through entities for U.S.
federal income tax purposes) and any beneficial owners of such entities or arrangements; |
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controlled foreign corporations; and |
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passive foreign investment companies. |
If a partnership (including an entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes) holds our
common stock, the tax treatment of a partner, member or other beneficial owner in such entity will generally depend upon the status of the partner, member or other beneficial owner, the activities of the entity, and certain determinations made at
the partner, member or other beneficial owner level. If you are a partner, member or other beneficial owner of a partnership (or other pass-through entity) that holds our common stock, you are urged to consult your own tax advisor regarding the tax
consequences of the acquisition, ownership and disposition of our common stock.
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This discussion is based on the Code, and administrative pronouncements, judicial decisions and final,
temporary and proposed Treasury regulations as of the date hereof, which are subject to change, possibly on a retroactive basis, and changes to any of which subsequent to the date of this registration statement may affect the tax consequences
described herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).
We have not sought, and do not expect to seek, a ruling from the U.S. Internal Revenue Service (the IRS) as to any U.S. federal income tax
consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will
not adversely affect the accuracy of the statements in this discussion. You are urged to consult your own tax advisor with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising
under the laws of any state, local or non-U.S. jurisdiction.
THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN U.S.
FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK. EACH PROSPECTIVE INVESTOR IN OUR COMMON STOCK IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES
TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK, INCLUDING THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL NON-INCOME, STATE, LOCAL, AND
NON-U.S. TAX LAWS.
Non-U.S. Holder Defined
As used herein, the term non-U.S. holder means a beneficial owner of our common stock who or that is for
U.S. federal income tax purposes:
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a non-resident alien individual (other than certain former citizens and
residents of the United States subject to U.S. tax as expatriates); |
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a foreign corporation; or |
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an estate or trust that is not a U.S. holder; |
but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of the disposition of our common
stock. If you are such an individual, you should consult your own tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership or sale or other disposition of our common stock.
Taxation of Distributions. In general, any distributions we make to a non-U.S. holder of shares of our common
stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes. If such dividends are not effectively
connected with the non-U.S. holders conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30% unless such non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the non-U.S. holders adjusted tax basis in its shares of our common stock and, to the extent such distribution exceeds the non-U.S. holders adjusted tax basis, as gain
realized from the sale or other disposition of the common stock, which will be treated as described under Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock below.
The 30% withholding tax described above generally does not apply to dividends paid to a non-U.S. holder who provides
an IRS Form W-8ECI certifying that the dividends are effectively connected with the non-U.S. holders
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conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. federal income tax as if the
non-U.S. holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A corporate non-U.S. holder receiving dividends that are
effectively connected with such holders conduct of a U.S. trade or business may also be subject to an additional branch profits tax imposed at a rate of 30% (or such lower rate as may apply under an applicable income tax treaty).
Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock. A non-U.S. holder generally
will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our common stock, unless:
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the gain is effectively connected with the conduct by the non-U.S. holder
of a trade or business within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the non-U.S. holder); or
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we are or have been a United States real property holding corporation for U.S. federal income tax
purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held our common stock, and, in the case where shares of our common stock
are regularly traded on an established securities market, the non-U.S. holder has owned, directly or constructively, more than 5% of our common stock at any time within the shorter of the five-year period
preceding the disposition or such non-U.S. holders holding period for the shares of our common stock. |
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal
income tax rates as if the non-U.S. holder were a U.S. resident. Any gains described in the first bullet point above of a non-U.S. holder that is treated as a non-U.S. corporation for U.S. federal income tax purposes may also be subject to an additional branch profits tax imposed at a 30% rate (or such lower rate as may apply under an applicable income tax
treaty).
If the second bullet point above applies to a non-U.S. holder, gain recognized by such holder on the
sale, exchange or other disposition of our common stock will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our common stock from such holder may be required to withhold U.S. federal income tax at a
rate of 15% of the amount realized upon such disposition. We believe that we are not and have not been at any time since our formation a United States real property holding corporation and, while no assurances can be given in this regard, we do not
expect to be treated as United States real property holding corporation in the future.
Information Reporting and Backup Withholding.
Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our shares of
common stock. A non-U.S. holder may have to comply with certification procedures to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements.
The certification procedures required to claim a reduced rate of withholding under a treaty generally will satisfy the certification requirements necessary to avoid the backup withholding as well. Backup withholding is not an additional tax. The
amount of any backup withholding from a payment to a non-U.S. holder will be allowed as a credit against such holders U.S. federal income tax liability and may entitle such holder to a refund, provided
that the required information is timely furnished to the IRS.
FATCA.
Provisions commonly referred to as FATCA impose withholding of 30% on payments of dividends (including constructive dividends) on our common stock
to foreign financial institutions (which is broadly defined for this purpose and in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information
reporting and due diligence requirements (generally relating to ownership by United States persons
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of interests in or accounts with those entities) have been satisfied by, or an exemption applies to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different
rules. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such withholding taxes, and a non-U.S. holder might be required to file
a U.S. federal income tax return to claim such refunds or credits. The above withholding tax under FATCA was scheduled to apply to payments of gross proceeds from the sale or other disposition of property that would produce U.S.-source interest or
dividends beginning on January 1, 2019; however, the IRS has released proposed regulations upon which taxpayers may rely that eliminate the obligation to withhold on gross proceeds. Such proposed regulations also delayed withholding on certain
other payments received from other foreign financial institutions that are allocable, as provided for under final Treasury Regulations, to payments of U.S.-source dividends, and other fixed or determinable annual or periodic income. Although these
proposed Treasury Regulations are not final, taxpayers generally may rely on them until final Treasury Regulations are issued. Prospective investors should consult their own tax advisors regarding the effects of FATCA on their investment in our
common stock.
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PLAN OF DISTRIBUTION
We are registering the possible resale by the Selling Holders of up to 1,320,591,340 Class A Shares.
We will not receive any of the proceeds from the sale of the securities by the Selling Holders. The aggregate proceeds to the Selling Holders
will be the purchase price of the securities less any discounts and commissions borne by the Selling Holders.
The Selling Holders will
pay any underwriting discounts and commissions and expenses incurred by the Selling Holders for brokerage, accounting, tax or legal services or any other expenses incurred by the Selling Holders in disposing of the securities. We will bear all other
costs, fees and expenses incurred in effecting the registration of the securities covered by this prospectus, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of our counsel and our
independent registered public accountants.
The securities beneficially owned by the Selling Holders covered by this prospectus may be
offered and sold from time to time by the Selling Holders. The term Selling Holders includes donees, pledgees, transferees or other successors in interest selling securities received after the date of this prospectus from a Selling
Holders as a gift, pledge, partnership distribution or other transfer. The Selling Holders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or
in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then current market price or in negotiated
transactions. Each Selling Holders reserves the right to accept and, together with its respective agents, to reject, any proposed purchase of securities to be made directly or through agents. The Selling Holders and any of their permitted
transferees may sell their securities offered by this prospectus on any stock exchange, market or trading facility on which the securities are traded or in private transactions. If underwriters are used in the sale, such underwriters will acquire
the shares for their own account. These sales may be at a fixed price or varying prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to prevailing market prices or at negotiated prices. The securities
may be offered to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. The obligations of the underwriters to purchase the securities will be subject to certain conditions. The
underwriters will be obligated to purchase all the securities offered if any of the securities are purchased.
Subject to the limitations
set forth in any applicable registration rights agreement, the Selling Holders may use any one or more of the following methods when selling the securities offered by this prospectus:
|
|
|
purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this
prospectus; |
|
|
|
ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
|
|
|
block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the transaction; |
|
|
|
an over-the-counter distribution
in accordance with the rules of the Nasdaq; |
|
|
|
through trading plans entered into by a Selling Holder pursuant to Rule
10b5-1 under the Exchange Act that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the
basis of parameters described in such trading plans; |
|
|
|
through one or more underwritten offerings on a firm commitment or best efforts basis; |
|
|
|
settlement of short sales entered into after the date of this prospectus; |
|
|
|
agreements with broker-dealers to sell a specified number of the securities at a stipulated price per share or
warrant; |
165
|
|
|
in at the market offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at
prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings
through sales agents; |
|
|
|
directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated
transactions; |
|
|
|
through the writing or settlement of options or other hedging transactions, whether through an options exchange
or otherwise; |
|
|
|
through the distributions by any Selling Holder or its affiliates to its partners, members or stockholders
|
|
|
|
through a combination of any of the above methods of sale; or |
|
|
|
any other method permitted pursuant to applicable law. |
In addition, a Selling Holder that is an entity may elect to make a pro rata in-kind distribution of
securities to its members, partners or stockholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus with a plan of distribution. Such members, partners or stockholders would thereby receive freely
tradeable securities pursuant to the distribution through a registration statement. To the extent a distributee is an affiliate of ours (or to the extent otherwise required by law), we may file a prospectus supplement in order to permit the
distributees to use the prospectus to resell the securities acquired in the distribution.
There can be no assurance that the Selling
Holders will sell all or any of the securities offered by this prospectus. In addition, the Selling Holders may also sell securities under Rule 144 under the Securities Act, if available, or in other transactions exempt from registration, rather
than under this prospectus. The Selling Holders have the sole and absolute discretion not to accept any purchase offer or make any sale of securities if they deem the purchase price to be unsatisfactory at any particular time.
The Selling Holders also may transfer the securities in other circumstances, in which case the transferees, pledgees or other successors-in-interest will be the selling beneficial owners for purposes of this prospectus. Upon being notified by a Selling Holder that a donee, pledgee, transferee, other successor-in-interest intends to sell our securities, we will, to the extent required, promptly file a supplement to this prospectus to name specifically such person as a
Selling Holder.
With respect to a particular offering of the securities held by the Selling Holders, to the extent required, an
accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is part, will be prepared and will set forth the following information:
|
|
|
the specific securities to be offered and sold; |
|
|
|
the names of the Selling Holders; |
|
|
|
the respective purchase prices and public offering prices, the proceeds to be received from the sale, if any, and
other material terms of the offering; |
|
|
|
settlement of short sales entered into after the date of this prospectus; |
|
|
|
the names of any participating agents, broker-dealers or underwriters; and |
|
|
|
any applicable commissions, discounts, concessions and other items constituting compensation from the Selling
Holders. |
In connection with distributions of the securities or otherwise, the Selling Holders may enter into hedging
transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-
166
dealers or other financial institutions may engage in short sales of the securities in the course of hedging the positions they assume with Selling Holders. The Selling Holders may also sell the
securities short and redeliver the securities to close out such short positions. The Selling Holders may also enter into option or other transactions with broker-dealers or other financial institutions which require the delivery to such
broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction). The Selling Holders may also pledge securities to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution, may effect sales of the pledged securities pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
In order to facilitate the offering of the securities, any
underwriters or agents, as the case may be, involved in the offering of such securities may engage in transactions that stabilize, maintain or otherwise affect the price of our securities. Specifically, the underwriters or agents, as the case may
be, may overallot in connection with the offering, creating a short position in our securities for their own account. In addition, to cover overallotments or to stabilize the price of our securities, the underwriters or agents, as the case may be,
may bid for, and purchase, such securities in the open market. Finally, in any offering of securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allotted to an underwriter or a broker-dealer for
distributing such securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or
maintain the market price of the securities above independent market levels. The underwriters or agents, as the case may be, are not required to engage in these activities, and may end any of these activities at any time.
The Selling Holders may solicit offers to purchase the securities directly from, and it may sell such securities directly to, institutional
investors or others. In this case, no underwriters or agents would be involved. The terms of any of those sales, including the terms of any bidding or auction process, if utilized, will be described in the applicable prospectus supplement.
It is possible that one or more underwriters may make a market in our securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. We cannot give any assurance as to the liquidity of the trading market for our securities. Blue Owls Class A Shares are currently listed on the NYSE under the symbol
OWL and Blue Owls warrants are currently listed on the NYSE under the symbol OWL.WS.
The Selling Holders
may authorize underwriters, broker-dealers or agents to solicit offers by certain purchasers to purchase the securities at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment
and delivery on a specified date in the future. The contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any commissions we or the Selling Holders pay for
solicitation of these contracts.
A Selling Holder may enter into derivative transactions with third parties, or sell securities not
covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the
applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by any Selling Holders or borrowed from any Selling Holders or others to settle those sales or to close out any related open
borrowings of stock, and may use securities received from any Selling Holder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be
identified in the applicable prospectus supplement (or a post-effective amendment). In addition, any Selling Holder may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short
using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
167
In effecting sales, broker-dealers or agents engaged by the Selling Holders may arrange for
other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the Selling Holders in amounts to be negotiated immediately prior to the sale.
In compliance with the guidelines of the Financial Industry Regulatory Authority (FINRA), the aggregate maximum discount,
commission, fees or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the gross proceeds of any offering pursuant to this prospectus and any applicable prospectus
supplement.
If at the time of any offering made under this prospectus a member of FINRA participating in the offering has a
conflict of interest as defined in FINRA Rule 5121 (Rule 5121), that offering will be conducted in accordance with the relevant provisions of Rule 5121.
To our knowledge, there are currently no plans, arrangements or understandings between the Selling Holders and any broker-dealer or agent
regarding the sale of the securities by the Selling Holders. Upon our notification by a Selling Holder that any material arrangement has been entered into with an underwriter or broker-dealer for the sale of securities through a block trade, special
offering, exchange distribution, secondary distribution or a purchase by an underwriter or broker-dealer, we will file, if required by applicable law or regulation, a supplement to this prospectus pursuant to Rule 424(b) under the Securities Act
disclosing certain material information relating to such underwriter or broker-dealer and such offering.
Underwriters, broker-dealers or
agents may facilitate the marketing of an offering online directly or through one of their affiliates. In those cases, prospective investors may view offering terms and a prospectus online and, depending upon the particular underwriter,
broker-dealer or agent, place orders online or through their financial advisors.
In offering the securities covered by this prospectus,
the Selling Holders and any underwriters, broker-dealers or agents who execute sales for the Selling Holders may be deemed to be underwriters within the meaning of the Securities Act in connection with such sales. Any discounts,
commissions, concessions or profit they earn on any resale of those securities may be underwriting discounts and commissions under the Securities Act.
The underwriters, broker-dealers and agents may engage in transactions with us or the Selling Holders, or perform services for us or the
Selling Holders, in the ordinary course of business.
In order to comply with the securities laws of certain states, if applicable, the
securities must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the securities may not be sold unless they have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is complied with.
The Selling Holders and any other persons
participating in the sale or distribution of the securities will be subject to applicable provisions of the Securities Act and the Exchange Act, and the rules and regulations thereunder, including, without limitation, Regulation M. These provisions
may restrict certain activities of, and limit the timing of purchases and sales of any of the securities by, the Selling Holders or any other person, which limitations may affect the marketability of the shares of the securities.
We will make copies of this prospectus available to the Selling Holders for the purpose of satisfying the prospectus delivery requirements of
the Securities Act. The Selling Holders may indemnify any agent, broker-dealer or underwriter that participates in transactions involving the sale of the securities against certain liabilities, including liabilities arising under the Securities Act.
We have agreed to indemnify the Selling Holders against certain liabilities, including certain liabilities under the Securities Act, the
Exchange Act or other federal or state law. Agents, broker-dealers and underwriters
168
may be entitled to indemnification by us and the Selling Holders against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments
which the agents, broker-dealers or underwriters may be required to make in respect thereof.
169
LEGAL MATTERS
Kirkland & Ellis LLP has passed upon the validity of the common stock of Blue Owl offered by this prospectus and certain other legal
matters related to this prospectus.
170
EXPERTS
The consolidated and combined financial statements of Blue Owl Capital Inc. as of December 31, 2021 and 2020, and for the years ended
December 31, 2021, 2020 and 2019, have been included herein in reliance upon the report of KPMG LLP (KPMG), independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.
171
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect
to the securities offered by this prospectus. This prospectus, which forms a part of such registration statement, does not contain all of the information included in the registration statement. For further information pertaining to us and our
securities, you should refer to the registration statement and to its exhibits. The registration statement has been filed electronically and may be obtained in any manner listed below. Whenever we make reference in this prospectus to any of our
contracts, agreements or other documents, the references are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement or a report we file under the Exchange Act, you should refer to the copy of
the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit to a registration statement or report is qualified in all respects by the filed exhibit.
We also file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the
public over the Internet at the SECs website at www.sec.gov and on our website at www.blueowl.com. The information contained on, or that may be accessed through, our website is not part of, and is not incorporated into, this prospectus. You
may inspect a copy of the registration statement through the SECs website, as provided herein.
172
INDEX TO CONSOLIDATED AND COMBINED FINANCIAL
STATEMENTS
BLUE OWL CAPITAL INC.
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Blue Owl Capital
Inc.:
Opinion on the Consolidated and Combined Financial Statements
We have audited the accompanying consolidated and combined statements of financial condition of Blue Owl Capital Inc. and subsidiaries (the Company) as of
December 31, 2021 and 2020, the related consolidated and combined statements of operations, changes in shareholders equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2021, and the
related notes (collectively, the consolidated and combined financial statements). In our opinion, the consolidated and combined financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These consolidated and combined
financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated and combined financial statements based on our audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated and combined financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the consolidated and combined financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated and combined financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated and combined financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated and combined financial statements that were
communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated and combined financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated and combined financial statements, taken as a whole, and we are not, by communicating the critical audit matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of the fair value
of certain acquired intangible assets
As discussed in Note 1 to the consolidated and combined financial statements, the Company
acquired Dyal Capital Partners (Dyal) and Oak Street Real Estate Capital LLC (Oak Street) on May 19, 2021 and December 29, 2021, respectively. The acquisitions were accounted for as business combinations using the acquisition method of
accounting as discussed in Note 2. As discussed in Note 3, the Company acquired Dyal and Oak Street for total purchase consideration of $5,607.2 million and $1,083.4 million, respectively.
F-2
In connection with the acquisitions, the Company recognized intangible assets acquired at their acquisition-date fair value. The intangible assets acquired included investment management
agreements related to the Dyal and Oak Street acquisitions of $1,859.9 million and $323.3 million, respectively. The intangible assets acquired also included investor relationships related to the Dyal and Oak Street acquisitions of
$291.4 million and $157.4 million, respectively.
We identified the evaluation of the fair value of the investment management
agreements and investor relationships acquired in the Dyal and Oak Street business combinations as a critical audit matter. Subjective and complex auditor judgment was required to evaluate the following assumptions:
projected revenue on assets under management used to value the investment management agreements
investor retention rates used to value the investor relationships
discount rates used to value the investment management agreements and investor relationships.
The acquisition-date fair value of investment management agreements and investor relationships were sensitive to changes in the above
assumptions. In addition, the projected revenue on assets under management was based on expectations of future market and economic conditions that are uncertain.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal
controls related to the valuation process for the investment management agreements and investor relationships. This included controls related to the development of the above assumptions. We evaluated the reasonableness of the projected revenue on
assets under management by comparing it to historical revenue on assets under management. We involved valuation professionals with specialized skills and knowledge, who assisted in:
evaluating the discount rates used to determine the fair value of the investment management agreements and the investor relationships by
(1) comparing their inputs to publicly available market data for comparable entities, (2) recalculating the Companys determination of its weighted average cost of capital (WACC) used to determine its discount rates, and
(3) reconciling the Companys determination of its WACC to the Companys weighted average return on assets and internal rate of return
evaluating the discount rates used to determine the fair value of the investment management agreements and the fair value of the
investor relationships acquired in the Oak Street business combination by comparing the Companys determination of the WACC to market information such as venture capital rates of return used to value companies in various stages of development
evaluating the investor retention rates used to determine the fair value of the investor relationships by comparing them to
historical retention rates of investors participating in new funds and investment strategies.
Fair value of earnout securities on date of Business
Combination
As discussed in Note 1 to the consolidated and combined financial statements, in connection with the Business Combination
on May 19, 2021, the Company issued two series of Class E Shares and the Blue Owl Operating Partnerships issued Seller Earnout Units (collectively, the Earnout Securities). As discussed in Note 9, the Company recorded an earnout liability
of $635.1 million, of which $491.3 million related to the Earnout Securities. As discussed in Note 2, the liability for Earnout Securities is carried at fair value with changes in fair value included within change in earnout liability in
the Companys consolidated and combined financial statements. In addition, as discussed in Note 2, Earnout Securities issued to certain employees in connection with the Business Combination were accounted for as equity-based compensation. As
discussed in Note 8, the Company recorded total equity-based compensation expense for Earnout Securities of $63 million. As discussed in Notes 1 and 8, the Earnout Securities had Triggering Events on July 21, 2021 and November 3,
2021, and as a result, none remained outstanding as of December 31, 2021.
F-3
We identified the evaluation of the fair value of Earnout Securities issued on May 19,
2021 in connection with the Business Combination as a critical audit matter. A higher degree of subjective and complex auditor judgment was required to evaluate the volatility rate developed from guideline public companies and the discount for lack
of marketability (DLOM) used to estimate the fair value of the Earnout Securities. The development of these assumptions involved unobservable data or company adjustments of observable data.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal
controls related to the valuation process for Earnout Securities, including controls related to the determination of the volatility rate. We involved valuation professionals with specialized skills and knowledge, who assisted in:
evaluating the DLOM by comparing it to an independently developed range of DLOMs
assessing the volatility rate used in the valuation of Earnout Securities by comparing it to (1) an independently developed
volatility rate using comparable peer companies, (2) historical and implied volatility rates of relevant public peer companies, and (3) an independently developed range of volatility rates using the capital structure of the Company.
/s/ KPMG LLP
We have served as the
Companys auditor since 2016.
New York, New York
February 28, 2022
F-4
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Consolidated and Combined Statements of Financial Condition
(Dollars in Thousands, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
December 31, 2020 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
42,567 |
|
|
$ |
11,630 |
|
Due from related parties |
|
|
224,576 |
|
|
|
92,698 |
|
Operating lease assets |
|
|
86,033 |
|
|
|
|
|
Strategic Revenue-Share Purchase consideration, net |
|
|
495,322 |
|
|
|
|
|
Deferred tax assets |
|
|
635,624 |
|
|
|
800 |
|
Intangible assets, net |
|
|
2,611,411 |
|
|
|
|
|
Goodwill |
|
|
4,132,245 |
|
|
|
|
|
Other assets, net |
|
|
38,620 |
|
|
|
16,469 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
8,266,398 |
|
|
$ |
121,597 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Debt obligations, net |
|
$ |
1,174,167 |
|
|
$ |
356,386 |
|
Accrued compensation |
|
|
155,606 |
|
|
|
207,957 |
|
Operating lease liabilities |
|
|
88,480 |
|
|
|
|
|
Deferred tax liabilities |
|
|
48,962 |
|
|
|
|
|
TRA liability (includes $111,325 and $ at fair value) |
|
|
670,676 |
|
|
|
|
|
Warrant liability, at fair value |
|
|
68,798 |
|
|
|
|
|
Earnout liability |
|
|
143,800 |
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
|
68,339 |
|
|
|
58,415 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
2,418,828 |
|
|
|
622,758 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 11) |
|
|
|
|
|
|
|
|
Shareholders Equity (Deficit) |
|
|
|
|
|
|
|
|
Members deficit prior to the Business Combination |
|
|
|
|
|
|
(507,687 |
) |
|
|
|
|
|
|
|
|
|
Class A Shares, par value $0.0001 per share, 2,500,000,000 and none authorized, 404,919,411
and none issued and outstanding |
|
|
40 |
|
|
|
|
|
Class C Shares, par value $0.0001 per share, 1,500,000,000 and none authorized, 674,766,200
and none issued and outstanding |
|
|
67 |
|
|
|
|
|
Class D Shares, par value $0.0001 per share, 350,000,000 and none authorized, 319,132,127 and
none issued and outstanding |
|
|
32 |
|
|
|
|
|
Additional paid-in capital |
|
|
2,160,934 |
|
|
|
|
|
Accumulated deficit |
|
|
(497,506 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders Equity Attributable to Blue Owl Capital Inc. |
|
|
1,663,567 |
|
|
|
|
|
Shareholders equity attributable to noncontrolling interests |
|
|
4,184,003 |
|
|
|
6,526 |
|
|
|
|
|
|
|
|
|
|
Total Shareholders Equity (Deficit) |
|
|
5,847,570 |
|
|
|
(501,161 |
) |
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders Equity (Deficit) |
|
$ |
8,266,398 |
|
|
$ |
121,597 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated and combined financial statements.
F-5
Blue Owl Capital Inc.
Consolidated and Combined Statements of Operations
(Prior to May 19, 2021, Owl Rock)
(Dollars in Thousands, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Management fees, net (includes Part I Fees of $150,370, $34,404 and $11,515) |
|
$ |
667,935 |
|
|
$ |
194,906 |
|
|
$ |
123,957 |
|
Administrative, transaction and other fees |
|
|
150,037 |
|
|
|
54,909 |
|
|
|
66,893 |
|
Realized performance income |
|
|
5,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues, Net |
|
|
823,878 |
|
|
|
249,815 |
|
|
|
190,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
1,496,988 |
|
|
|
240,731 |
|
|
|
111,773 |
|
Amortization of intangible assets |
|
|
113,889 |
|
|
|
|
|
|
|
|
|
General, administrative and other expenses |
|
|
140,268 |
|
|
|
67,811 |
|
|
|
51,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses |
|
|
1,751,145 |
|
|
|
308,542 |
|
|
|
163,483 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Loss |
|
|
|
|
|
|
|
|
|
|
|
|
Net losses on investments |
|
|
(3,526 |
) |
|
|
|
|
|
|
|
|
Net losses on retirement of debt |
|
|
(17,636 |
) |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(27,275 |
) |
|
|
(23,816 |
) |
|
|
(6,662 |
) |
Change in TRA liability |
|
|
(13,848 |
) |
|
|
|
|
|
|
|
|
Change in warrant liability |
|
|
(43,670 |
) |
|
|
|
|
|
|
|
|
Change in earnout liability |
|
|
(834,255 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Loss |
|
|
(940,210 |
) |
|
|
(23,816 |
) |
|
|
(6,662 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income Taxes |
|
|
(1,867,477 |
) |
|
|
(82,543 |
) |
|
|
20,705 |
|
Income tax benefit |
|
|
(65,211 |
) |
|
|
(102 |
) |
|
|
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated and Combined Net Loss |
|
|
(1,802,266 |
) |
|
|
(82,441 |
) |
|
|
20,465 |
|
Net loss attributable to noncontrolling interests |
|
|
1,426,095 |
|
|
|
4,610 |
|
|
|
2,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Blue Owl Capital Inc. (After May 19, 2021) / Owl Rock (Prior to
May 19, 2021) |
|
$ |
(376,171 |
) |
|
$ |
(77,831 |
) |
|
$ |
22,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 19, 2021 through December 31, 2021 |
|
|
|
|
|
|
|
Net Loss Attributable to Class A Shares |
|
$ |
(450,430 |
) |
|
|
|
|
|
Net Loss per Class A Share |
|
|
|
|
Basic |
|
$ |
(1.27 |
) |
|
|
|
|
|
Diluted |
|
$ |
(1.34 |
) |
|
|
|
|
|
Weighted-Average Class A Shares |
|
|
|
|
Basic(1) |
|
|
354,949,067 |
|
|
|
|
|
|
Diluted |
|
|
1,315,186,416 |
|
|
|
|
|
|
(1) |
Included in the weighted-average Class A Shares outstanding for the period from May 19, 2021 to
December 31, 2021, were 9,191,642 RSUs that have vested but have not been settled in Class A Shares. These RSUs do not participate in dividends until settled in Class A Shares. See Note 13. |
The accompanying notes are an integral part of these consolidated and combined financial statements.
F-6
Blue Owl Capital Inc.
Consolidated and Combined Statements of Changes in Shareholders Equity (Deficit)
(Prior to May 19, 2021, Owl Rock)
(Dollars in Thousands, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Members Deficit Prior to the Business Combination |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
(507,687 |
) |
|
$ |
(352,756 |
) |
|
$ |
(69,916 |
) |
Contributions |
|
|
|
|
|
|
|
|
|
|
13,435 |
|
Distributions |
|
|
(103,143 |
) |
|
|
(77,100 |
) |
|
|
(319,233 |
) |
Comprehensive income (loss) prior to the Business Combination Date |
|
|
74,259 |
|
|
|
(77,831 |
) |
|
|
22,958 |
|
Transfer of predecessor members deficit to additional
paid-in capital and noncontrolling interests |
|
|
536,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
|
|
|
$ |
(507,687 |
) |
|
$ |
(352,756 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares Par Value |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Impact of the Business Combination |
|
|
32 |
|
|
|
|
|
|
|
|
|
Share issuance in connection with Strategic Revenue-Share Purchase |
|
|
3 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
1 |
|
|
|
|
|
|
|
|
|
Class C Shares and Common Units exchanged for Class A Shares |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
40 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares Par Value |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Impact of the Business Combination |
|
|
63 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
6 |
|
|
|
|
|
|
|
|
|
Class C Shares and Common Units exchanged for Class A Shares |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
Class C Shares issued as consideration related to the Oak Street Acquisition |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
67 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class D Shares Par Value |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Impact of the Business Combination |
|
|
29 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
32 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class E Shares Par Value |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Impact of the Business Combination |
|
|
1 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Paid-in Capital |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Transfer of predecessor Owl Rock members deficit to additional paid-in capital and noncontrolling interests |
|
|
(138,133 |
) |
|
|
|
|
|
|
|
|
Cash proceeds from the Business Combination |
|
|
1,738,478 |
|
|
|
|
|
|
|
|
|
Offering costs related to the Business Combination |
|
|
(126,309 |
) |
|
|
|
|
|
|
|
|
Allocation of cash proceeds to warrant liability |
|
|
(25,128 |
) |
|
|
|
|
|
|
|
|
F-7
Blue Owl Capital Inc.
Consolidated and Combined Statements of Changes in Shareholders Equity (Deficit)
(Prior to May 19, 2021, Owl Rock)
(Dollars in Thousands, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Allocation to earnout liability for Class E Shares issued in connection with the Business
Combination |
|
|
(83,949 |
) |
|
|
|
|
|
|
|
|
Deferred taxes recognized in the Business Combination |
|
|
504,551 |
|
|
|
|
|
|
|
|
|
TRA liability recognized in the Business Combination |
|
|
(359,388 |
) |
|
|
|
|
|
|
|
|
Reallocation between additional paid-in capital and
noncontrolling interests related to the Business Combination |
|
|
(325,222 |
) |
|
|
|
|
|
|
|
|
Share issuance in connection with Strategic Revenue-Share Purchase |
|
|
455,020 |
|
|
|
|
|
|
|
|
|
Offering costs related to share issuance in connection with Strategic Revenue-Share
Purchase |
|
|
(687 |
) |
|
|
|
|
|
|
|
|
Exercise of warrants |
|
|
2 |
|
|
|
|
|
|
|
|
|
Equity-based compensation |
|
|
331,926 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
198,704 |
|
|
|
|
|
|
|
|
|
Acquisition of noncontrolling interests |
|
|
(74,684 |
) |
|
|
|
|
|
|
|
|
Deferred taxes on capital transactions subsequent to the Business Combination |
|
|
164,741 |
|
|
|
|
|
|
|
|
|
TRA liability recognized on capital transactions subsequent to the Business Combination |
|
|
(195,795 |
) |
|
|
|
|
|
|
|
|
Reallocation between additional paid-in capital and
noncontrolling interests due to changes in Blue Owl Operating Group ownership subsequent to the Business Combination |
|
|
96,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
2,160,934 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Deficit |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Cash dividends declared on Class A Shares |
|
|
(47,076 |
) |
|
|
|
|
|
|
|
|
Comprehensive loss following the Business Combination Date |
|
|
(450,430 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
(497,506 |
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders Equity Attributable to Blue Owl Capital Inc. |
|
$ |
1,663,567 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders Equity Attributable to Noncontrolling Interests |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
6,526 |
|
|
$ |
2,259 |
|
|
$ |
(2,689 |
) |
Transfer of predecessor Owl Rock members deficit to additional paid-in capital and noncontrolling interests |
|
|
(398,438 |
) |
|
|
|
|
|
|
|
|
Common Units issued as consideration related to the Dyal Acquisition |
|
|
4,285,359 |
|
|
|
|
|
|
|
|
|
Acquisition of noncontrolling interests in the Blue Owl Operating Group in connection with the
Business Combination |
|
|
(491,956 |
) |
|
|
|
|
|
|
|
|
Allocation to earnout liability for Seller Earnout Units issued in the Business
Combination |
|
|
(160,540 |
) |
|
|
|
|
|
|
|
|
Reallocation between additional paid-in capital and
noncontrolling interests related to the Business Combination |
|
|
325,222 |
|
|
|
|
|
|
|
|
|
Common Units issued as consideration related to the Oak Street Acquisition |
|
|
329,767 |
|
|
|
|
|
|
|
|
|
Equity-based compensation |
|
|
1,026,020 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
1,126,828 |
|
|
|
|
|
|
|
|
|
Acquisition of noncontrolling interests |
|
|
(222,370 |
) |
|
|
|
|
|
|
|
|
F-8
Blue Owl Capital Inc.
Consolidated and Combined Statements of Changes in Shareholders Equity (Deficit)
(Prior to May 19, 2021, Owl Rock)
(Dollars in Thousands, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Contributions |
|
|
15,734 |
|
|
|
9,831 |
|
|
|
8,460 |
|
Distributions |
|
|
(135,244 |
) |
|
|
(954 |
) |
|
|
(1,019 |
) |
Reallocation between additional paid-in capital and
noncontrolling interests due to changes in Blue Owl Operating Group ownership subsequent to the Business Combination |
|
|
(96,810 |
) |
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
|
(1,426,095 |
) |
|
|
(4,610 |
) |
|
|
(2,493 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
4,184,003 |
|
|
$ |
6,526 |
|
|
$ |
2,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders Equity |
|
$ |
5,847,570 |
|
|
$ |
(501,161 |
) |
|
$ |
(350,497 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends Paid per Class A Share |
|
$ |
0.13 |
|
|
$ |
|
|
|
$ |
|
|
Number of Class A Shares |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
|
|
|
|
|
|
|
|
|
|
|
Impact of the Business Combination |
|
|
320,005,258 |
|
|
|
|
|
|
|
|
|
Shares issued in connection with Strategic Revenue-Share Purchase |
|
|
29,701,013 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
14,990,864 |
|
|
|
|
|
|
|
|
|
Class C Shares and Common Units exchanged for Class A Shares |
|
|
40,222,143 |
|
|
|
|
|
|
|
|
|
Exercise of warrants |
|
|
133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
|
404,919,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Class C Shares |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
|
|
|
|
|
|
|
|
|
|
|
Impact of the Business Combination |
|
|
628,380,707 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
60,533,306 |
|
|
|
|
|
|
|
|
|
Class C Shares and Common Units exchanged for Class A Shares |
|
|
(40,222,143 |
) |
|
|
|
|
|
|
|
|
Common Units issued as consideration for Oak Street Acquisition |
|
|
26,074,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
|
674,766,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Class D Shares |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
|
|
|
|
|
|
|
|
|
|
|
Impact of the Business Combination |
|
|
294,656,373 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
24,475,754 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
|
319,132,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Class E Shares |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
|
|
|
|
|
|
|
|
|
|
|
Impact of the Business Combination |
|
|
14,990,864 |
|
|
|
|
|
|
|
|
|
Settlement of Earnout Securities |
|
|
(14,990,864 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated and combined financial statements.
F-9
Blue Owl Capital Inc.
Consolidated and Combined Statements of Cash Flows
(Prior to May 19, 2021, Owl Rock)
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated and combined net (loss) income |
|
$ |
(1,802,266 |
) |
|
$ |
(82,441 |
) |
|
$ |
20,465 |
|
Adjustments to reconcile consolidated and combined net loss to net cash from operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
113,889 |
|
|
|
|
|
|
|
|
|
Equity-based compensation |
|
|
1,205,336 |
|
|
|
|
|
|
|
|
|
Depreciation and amortization of fixed assets |
|
|
665 |
|
|
|
673 |
|
|
|
829 |
|
Amortization of debt discounts and deferred financing costs |
|
|
1,868 |
|
|
|
787 |
|
|
|
225 |
|
Amortization of investment discounts and premiums |
|
|
1,692 |
|
|
|
|
|
|
|
|
|
Non-cash lease expense |
|
|
1,974 |
|
|
|
|
|
|
|
|
|
Net losses on retirement of debt |
|
|
17,636 |
|
|
|
|
|
|
|
|
|
Net losses on investments, net of dividends |
|
|
3,583 |
|
|
|
|
|
|
|
|
|
Change in TRA liability |
|
|
13,848 |
|
|
|
|
|
|
|
|
|
Change in warrant liability |
|
|
43,670 |
|
|
|
|
|
|
|
|
|
Change in earnout liability |
|
|
834,255 |
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
(66,138 |
) |
|
|
(475 |
) |
|
|
159 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Due from related parties |
|
|
(105,376 |
) |
|
|
(49,824 |
) |
|
|
(12,407 |
) |
Strategic Revenue-Share Purchase consideration |
|
|
(40,997 |
) |
|
|
|
|
|
|
|
|
Other assets, net |
|
|
(2,095 |
) |
|
|
(9,747 |
) |
|
|
2,060 |
|
Accrued compensation |
|
|
92,742 |
|
|
|
135,108 |
|
|
|
39,295 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
(32,628 |
) |
|
|
11,153 |
|
|
|
(6,562 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities |
|
|
281,658 |
|
|
|
5,234 |
|
|
|
44,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of fixed assets |
|
|
(5,261 |
) |
|
|
(652 |
) |
|
|
(1,173 |
) |
Purchase of investments |
|
|
(328,797 |
) |
|
|
|
|
|
|
|
|
Proceeds from investment sales and maturities |
|
|
314,052 |
|
|
|
|
|
|
|
|
|
Cash consideration paid for Dyal Acquisition and Oak Street Acquisition, net of cash
acquired |
|
|
(1,578,866 |
) |
|
|
|
|
|
|
|
|
Proceeds from promissory note |
|
|
|
|
|
|
(30,000 |
) |
|
|
|
|
Repayments of promissory note |
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Investing Activities |
|
|
(1,598,872 |
) |
|
|
(652 |
) |
|
|
(1,173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from the Business Combination |
|
|
1,738,603 |
|
|
|
|
|
|
|
|
|
Offering costs related to the Business Combination |
|
|
(126,309 |
) |
|
|
|
|
|
|
|
|
Acquisition of noncontrolling interests in the Blue Owl Operating Group in connection with the
Business Combination |
|
|
(491,956 |
) |
|
|
|
|
|
|
|
|
Acquisition of noncontrolling interests |
|
|
(297,054 |
) |
|
|
|
|
|
|
|
|
Proceeds from debt obligations |
|
|
1,390,296 |
|
|
|
240,547 |
|
|
|
344,944 |
|
Debt issuance costs |
|
|
(17,864 |
) |
|
|
(594 |
) |
|
|
(4,151 |
) |
Repayments of debt obligations, including retirement costs |
|
|
(577,835 |
) |
|
|
(171,458 |
) |
|
|
(83,590 |
) |
Contributions from members prior to the Business Combination |
|
|
|
|
|
|
9,264 |
|
|
|
20,042 |
|
Dividends paid on Class A Shares |
|
|
(47,076 |
) |
|
|
|
|
|
|
|
|
Distributions to members prior to the Business Combination |
|
|
(103,144 |
) |
|
|
(78,054 |
) |
|
|
(320,252 |
) |
Contributions from noncontrolling interests |
|
|
15,734 |
|
|
|
|
|
|
|
|
|
Distributions to noncontrolling interests |
|
|
(135,244 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by (Used in) Financing Activities |
|
|
1,348,151 |
|
|
|
(295 |
) |
|
|
(43,007 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
|
30,937 |
|
|
|
4,287 |
|
|
|
(116 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
11,630 |
|
|
|
7,343 |
|
|
|
7,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period |
|
$ |
42,567 |
|
|
$ |
11,630 |
|
|
$ |
7,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information |
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
25,009 |
|
|
$ |
23,231 |
|
|
$ |
2,697 |
|
Cash paid for income taxes |
|
$ |
4,353 |
|
|
$ |
142 |
|
|
$ |
359 |
|
The accompanying notes are an integral part of these consolidated and combined financial statements.
F-10
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Blue Owl Capital Inc. (the Registrant), a Delaware corporation, together with its consolidated subsidiaries
(collectively, the Company or Blue Owl), is a global alternative asset manager. Anchored by a strong permanent capital base, the Company deploys private capital across Direct Lending, GP Capital Solutions and Real Estate
strategies on behalf of institutional and private wealth clients.
The Companys primary sources of revenues are
management fees, which are generally based on the amount of the Companys fee-paying assets under management. The Company generates substantially all of its revenues in the United States. The Company
operates through one operating and reportable segment. This single reportable segment reflects how the chief operating decision makers allocate resources and assess performance under the Companys
one-firm approach, which includes operating collaboratively across product lines, with predominantly a single expense pool.
The Company conducts its operations through Blue Owl Capital Holdings LP (Blue Owl Holdings) and Blue Owl Capital
Carry LP (Blue Owl Carry). Blue Owl Holdings and Blue Owl Carry are referred to, collectively, as the Blue Owl Operating Partnerships, and collectively with their consolidated subsidiaries, as the Blue Owl Operating
Group. The Registrant holds its controlling financial interests in the Blue Owl Operating Group indirectly through Blue Owl Capital Holdings GP LLC and Blue Owl Capital GP LLC (collectively, Blue Owl GP), which are directly or
indirectly wholly owned subsidiaries of the Registrant.
Business Combination, Including Dyal Acquisition
The Registrant was initially incorporated in the Cayman Islands as Altimar Acquisition Corporation (Altimar), a
special purpose acquisition company. Pursuant to the Business Combination Agreement dated December 23, 2020, as amended, modified, supplemented or waived from time to time, (the Business Combination Agreement), on May 19, 2021
(Business Combination Date) (i) Altimar was redomiciled as a Delaware corporation and changed its name to Blue Owl Capital Inc., (ii) Altimar merged with Owl Rock (as defined below) (the Altimar Merger) and (iii) the
Company acquired Dyal Capital Partners (Dyal Capital), a former division of Neuberger Berman Group LLC (the Dyal Acquisition) (collectively with the Altimar Merger, the Business Combination). As further discussed
in Note 2, for both the Altimar Merger and the Dyal Acquisition, Owl Rock was deemed to be the acquirer for accounting purposes. Therefore, the predecessor to Blue Owl is Owl Rock, a combined
carve-out of Owl Rock Capital Group LLC and Blue Owl Securities LLC (formerly, Owl Rock Capital Securities LLC) (Securities). See Note 3 for additional information.
Oak Street Acquisition
On December 29, 2021, the Company completed its acquisition of Oak Street Real Estate Capital, LLC (Oak
Street) and its advisory business (the Oak Street Acquisition, and together with the Dyal Acquisition, the Acquisitions). See Note 3 for additional information.
Registrants Capital Structure
In 2021, the Registrant had the following instruments outstanding:
|
|
|
Class A SharesShares of Class A common stock that are publicly traded. Class A
Shareholders are entitled to one vote per share on all matters submitted to a vote of shareholders. Class A Shareholders are entitled to dividends declared on the Class A Shares by the Registrants board of directors (the
Board). |
F-11
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
|
|
|
Class B SharesShares of Class B common stock that are not publicly traded. Class B
Shareholders are entitled to a number of votes per share that when combined with Class D Shares, equal 90% of the total voting power of all shares. Class B Shareholders are entitled to dividends in the same amount per share as declared on
Class A Shares. No Class B Shares have been issued from inception through December 31, 2021. Common Units (as defined below) held by certain senior members of management (Principals) are exchangeable on a one-for-one basis for Class B Shares. |
|
|
|
Class C SharesShares of Class C common stock that are not publicly traded. Class C
Shareholders are entitled to one vote per share on matters submitted to a vote of shareholders. Class C Shareholders do not participate in the earnings of the Registrant, as the holders of such shares participate in the economics of the Blue
Owl Operating Group through their direct and indirect holdings of Common Units and Incentive Units (as defined below and subject to limitations on unvested units). For every Common Unit and Incentive Unit held directly or indirectly by non-Principals, one Class C Share is issued to grant a corresponding voting interest in the Registrant. |
|
|
|
Class D SharesShares of Class D common stock that are not publicly traded. Class D
Shareholders are entitled to a number of votes per share that when combined with Class B Shares, equal 90% of the total voting power of all shares. Class D Shareholders do not participate in the earnings of the Registrant, as the holders
of such shares participate in the economics of the Blue Owl Operating Group through their direct or indirect holdings of Common Units and Incentive Units (subject to limitations on unvested units). For every Common Unit and Incentive Unit held
directly and indirectly by Principals, one Class D Share is issued to grant a corresponding voting interest in the Registrant. |
|
|
|
Class E SharesShares of Class E common stock that were not publicly traded. Class E
Shares were issued in connection with the Business Combination. As of December 31, 2021, there were no Class E Shares remaining outstanding, as such shares were converted into Class A Shares upon their respective Class E
Triggering Events as discussed below. Class E Shareholders were not entitled to a vote. Class E Shares accrued dividends equal to amounts declared per Class A Share, which amounts were paid upon their respective Class E
Triggering Event dates. Class E Shares and Seller Earnout Units (as defined below) are collectively referred to as Earnout Securities. |
In connection with the Business Combination, the Company issued two series of Class E Shares: Series
E-1 and Series E-2. Series E-1 and E-2 vested upon a Class E Triggering Event, which
occurred when the volume weighted-average price of a Class A Share exceeded $12.50 and $15.00, respectively, for 20 consecutive trading days. The Series E-1 Class E Shares had a Class E
Triggering Event on July 21, 2021, at which time 7,495,432 Class E Shares were converted into an equal number of Class A Shares. The Series E-2 Class E Shares had a Class E Triggering
Event on November 3, 2021, at which time 7,495,432 Class E Shares were converted into an equal number of Class A Shares.
|
|
|
RSUsThe Company grants Class A restricted share units (RSUs) to its employees and
independent Board members. An RSU entitles the holder to receive a Class A Share, or cash equal to the fair value of a Class A Share at the election of the Board, upon completion of a requisite service period. RSUs granted to-date do not accrue dividend equivalents. No RSUs were issued prior to the Business Combination. RSU grants are accounted for as equity-based compensation. See Note 8 for additional information.
|
|
|
|
WarrantsIn connection with the Business Combination, the Company issued warrants to purchase
Class A Shares at a price of $11.50 per share. The warrants expire five years from the Business Combination Date. A portion of the outstanding warrants are held by the sponsor of Altimar (Private Placement Warrants) and the
remaining warrants are held by other third-party investors (Public Warrants). The Company generally may redeem all Public Warrants for $0.01 per warrant if the |
F-12
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
|
Companys Class A Share price equals or exceeds $18.00 per share. If the Companys Class A Share price is greater than $10.00 per share but less than $18.00 per share, the
Company generally may redeem all Public Warrants for $0.10 per warrant. In each case, any redemptions require a 30-day notice to the warrant holders, during which time the holders may elect to exercise their
warrants, and such redemptions must be done for not less than all of the outstanding Public Warrants. Holders may elect to exercise their warrants on a cashless basis. |
The following table presents the number of shares of the Registrant, RSUs and warrants that were outstanding as of
December 31, 2021:
|
|
|
|
|
|
|
December 31, 2021 |
|
Class A Shares |
|
|
404,919,411 |
|
Class C Shares |
|
|
674,766,200 |
|
Class D Shares |
|
|
319,132,127 |
|
RSUs |
|
|
21,059,443 |
|
Warrants |
|
|
14,159,248 |
|
Blue Owl Operating Partnerships Capital Structure
In 2021, the Blue Owl Operating Partnerships had outstanding the following instruments, which are collectively referred to as
Blue Owl Operating Group Units:
|
|
|
GP UnitsThe Registrant indirectly holds a general partner interest and all of the GP Units in each
of the Blue Owl Operating Partnerships. The GP Units are limited partner interests in the Blue Owl Operating Partnerships that represent the Registrants economic ownership in the Blue Owl Operating Group. For each Class A Share and
Class B Share outstanding, the Registrant indirectly holds an equal number of GP Units. References to GP Units refer collectively to a GP Unit in each of the Blue Owl Operating Partnerships. References to GP Units also include Common Units (as
defined below) acquired and held directly or indirectly by the Registrant as a result of Common Units exchanged for Class A Shares. |
|
|
|
Common UnitsCommon Units are limited partner interests held by certain members of management,
employees and other third parties in the Blue Owl Operating Partnerships. Subject to certain restrictions, Common Units are exchangeable on a one-for-one basis for
either Class A Shares (if held by a non-Principal) or Class B Shares (if held by a Principal). Common Unit exchanges may be settled in cash, only at the election of the Companys Exchange
Committee (currently composed of independent members of the Board), and only if funded from proceeds of a new permanent equity offering. Common Units held by Principals are exchangeable after the two-year
anniversary of the Business Combination Date. References to Common Units refer collectively to a Common Unit in each of the Blue Owl Operating Partnerships, but excludes any Common Units held directly or indirectly by the Registrant. Upon an
exchange of Common Units for an equal number of Class A Shares or Class B Shares, a corresponding number of Class C Shares or Class D Shares, respectively, will be cancelled. Common Unitholders are entitled to distributions in
the same amount per unit as declared on GP Units. |
|
|
|
Incentive UnitsIncentive Units are Class P limited partner interests in the Blue Owl Operating
Partnerships granted to certain members of management, employees and consultants (collectively, Incentive Unit Grantees) and are generally subject to vesting conditions, as further discussed in Note 8. Incentive Units are held indirectly
through Blue Owl Management Vehicle LP on behalf of Incentive Unit Grantees. A vested Incentive Unit may convert into a Common Unit upon becoming economically equivalent on a tax basis to a Common Unit. Once vested, Incentive Unitholders are
entitled to |
F-13
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
|
distributions in the same amount per unit as declared on GP Units and Common Units. Unvested Incentive Unitholders generally are not entitled to distributions; however, consistent with other Blue
Owl Operating Group Units (other than Oak Street Earnout Units), unvested Incentive Units receive taxable income allocations that may subject holders to tax liabilities. As a result, Incentive Unitholders (consistent with other Blue Owl Operating
Group Units other than Oak Street Earnout Units) may receive tax distributions on unvested units to cover a portion or all of such tax liabilities. |
|
|
|
Seller Earnout UnitsSeller Earnout Units were limited partner interests held in the Blue Owl
Operating Partnerships that had the same Class E Triggering Events, forfeiture provisions and distribution restrictions as the Class E Shares. In connection with the Business Combination, recipients of Earnout Securities had the option of
selecting either Class E Shares or Seller Earnout Units. For recipients that elected to receive Class E Shares, a corresponding number of Seller Earnout Units were indirectly held by the Registrant. As of December 31, 2021, there were
no Seller Earnout Units remaining outstanding. |
The Series E-1 Seller Earnout
Units had a Class E Triggering Event on July 21, 2021. As a result, (i) 7,495,432 Seller Earnout Units underlying an equal number of Series E-1 Class E Shares were converted into an equal number
of GP Units, (ii) 42,504,530 Seller Earnout Units were converted into an equal number of Common Units, and (iii) 42,504,530 non-economic, voting shares of the Registrant were issued to the holders of the
converted Common Units (30,266,653 Class C Shares and 12,237,877 Class D Shares).
The Series
E-2 Seller Earnout Units had a Class E Triggering Event on November 3, 2021. As a result, (i) 7,495,432 Seller Earnout Units underlying an equal number of Series
E-2 Class E Shares were converted into an equal number of GP Units, (ii) 42,504,530 Seller Earnout Units were converted into an equal number of Common Units, and (iii) 42,504,530 non-economic, voting shares of the Registrant were issued to the holders of the converted Common Units (30,266,653 Class C Shares and 12,237,877 Class D Shares).
|
|
|
Oak Street Earnout UnitsIn connection with the Oak Street Acquisition, the Company agreed to make
additional payments of cash (Oak Street Cash Earnout) and Common Units (Oak Street Earnout Units and collectively with the Oak Street Cash Earnout, the Oak Street Earnouts) in two tranches upon the occurrence of
certain Oak Street Triggering Events. The Oak Street Triggering Events are based on achieving a certain level of quarterly management fee revenues from existing and future Oak Street products. See Note 3 for additional information.
|
The following table presents the number of Blue Owl Operating Group Units that were outstanding as of
December 31, 2021:
|
|
|
|
|
Units |
|
December 31, 2021 |
|
GP Units |
|
|
404,919,411 |
|
Common Units |
|
|
993,898,327 |
|
Incentive Units |
|
|
23,244,373 |
|
Oak Street Earnout Units |
|
|
26,074,330 |
|
Share Repurchase Program
On May 19, 2021, Blue Owls Board authorized the repurchase of up to $100.0 million of Class A Shares.
Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including
legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and will
F-14
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
terminate upon the earlier of May 19, 2022 and the purchase of all shares available under the repurchase program. As of December 31, 2021, the Company had not repurchased any of its
Class A Shares.
Common Unit Exchanges
During the fourth quarter of 2021, the Company exchanged 40,222,143 Common Units and Class C Shares for an equal number of
Class A Shares. As a result of the exchange, the Company reallocated equity from noncontrolling interests to the Companys additional paid-in capital and recorded additional net deferred tax assets
and TRA liability in connection with the exchanges. See the consolidated and combined statement of shareholders equity and Note 10 for additional information, including the amounts related to these adjustments.
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
These consolidated and combined financial statements are prepared in accordance with U.S. generally accepted accounting
principles (GAAP) as set forth in the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC). All intercompany transactions and balances have been eliminated in consolidation
and combination. The notes are an integral part of the Companys consolidated and combined financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the Companys consolidated and combined
financial statements have been included and are of a normal and recurring nature. The Companys comprehensive income (loss) is comprised solely of consolidated and combined net income (i.e., the Company has no other comprehensive income).
Prior to the Business Combination, Blue Owls financial statements were prepared on a consolidated and combined basis. As
part of the Business Combination, Securities was contributed to the Blue Owl Operating Group. Following the Business Combination, the financial statements are prepared on a consolidated basis.
The merger between Owl Rock and Altimar was accounted for as a reverse asset acquisition, with no step-up to fair value on any assets or liabilities, and therefore no goodwill or other intangible assets were recorded. The Acquisitions were accounted for using the acquisition method of accounting. As a result,
the Company recorded the fair value of the net assets acquired as of the closing date of each respective acquisition, and operating results for each acquired business are included starting as of such each respective date. See Note 3 for additional
information regarding the Acquisitions.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make assumptions and estimates that
affect the amounts reported in the consolidated and combined financial statements. The most critical of these estimates are related to (i) the fair value of the investments held by the products the Company manages, as for many products, this
impacts the amount of revenues the Company recognizes each period; (ii) the fair value of equity-based compensation grants; (iii) the fair values of liabilities with respect to the TRA (the portion considered contingent consideration),
warrants and earnout liability; (iv) the estimate of future taxable income, which impacts the realizability and carrying amount of the Companys deferred income tax assets; and (v) the qualitative and quantitative assessments of
whether impairments of acquired intangible assets and goodwill exist. Inherent in such estimates and judgements relating to future cash flows, which include the Companys interpretation of current economic indicators
F-15
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
and market valuations, and assumptions about the Companys strategic plans with regard to its operations. While management believes that the estimates utilized in preparing the consolidated
and combined financial statements are reasonable and prudent, actual results could differ materially from those estimates.
Principles of Consolidation
The Company consolidates entities in which it has a controlling financial interest based on the application of either the
variable interest model or the voting interest model.
An entity is considered to be a variable interest entity
(VIE) if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of
equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses
or right to receive the expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and
substantially all of the entitys activities either involve or are conducted on behalf of an investor with disproportionately few voting rights.
The Company is required to consolidate any VIEs for which it is the primary beneficiary. The Company is the primary beneficiary
if it holds a controlling financial interest, which is defined as having (a) the power to direct the activities of the VIE that most significantly impact the entitys economic performance and (b) the obligation to absorb losses of the
entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company does not consolidate any of the products it manages, as it does not hold any direct or indirect interests in such entities that
could expose the Company to an obligation to absorb losses of an entity or the right to receive benefits from an entity that could potentially be significant to such entities.
Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not
hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, are not be considered to be variable interests. The Company factors in all economic interests, including
proportionate interests held through related parties, to determine if fees are variable interests. The Companys interests in the products it manages are primarily in the form of management fees, realized performance income, and insignificant
direct or indirect equity interests, and therefore does not have variable interests in such entities.
The Company
determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders that conclusion. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and
indirect economic interests in the entity. The consolidation analysis is generally performed qualitatively; however, if the primary beneficiary is not readily determinable, a quantitative analysis may also be performed. This analysis requires
judgment, including: (1) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) evaluating whether the equity holders, as a
group, can make decisions that have a significant effect on the success of the entity, (3) determining whether two or more parties equity interests should be aggregated, (4) determining whether the equity investors have proportionate
voting rights to their obligations to absorb losses or rights to receive returns from an entity and (5) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is
most closely associated with a VIE and therefore would be deemed the primary beneficiary.
F-16
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
For entities that are not VIEs, the Company evaluates such entities
(VOEs) under the voting interest model. The Company consolidates VOEs where the Company controls a majority voting interest. The Company will generally not consolidate VOEs where a single investor or simple majority of third-party
investors with equity have the ability to exercise substantive kick-out or participation rights.
Acquisitions
For business combinations accounted for under the acquisition method, management recognizes the fair value of assets acquired
and liabilities assumed on the acquisition date. The excess of purchase price consideration over the fair value of net assets acquired is recorded as goodwill. Managements determination of fair value of assets acquired and liabilities assumed
at the acquisition date is based on the best information available in the circumstances and incorporates managements own assumptions and involve a significant degree of judgment.
Cash and Cash Equivalents
The Company considers highly-rated liquid investments that have an original maturity of three months or less from the date of
purchase to be cash equivalents. As of December 31, 2021 and 2020, the Company holds the majority of its cash balances with a single financial institution and such balances are in excess of Federal Deposit Insurance Corporation insured limits,
which exposes the Company to a certain degree of credit risk concentration.
Investments
Investments are primarily comprised of investments for which the Company has elected the fair value option in order to simplify
the accounting for these instruments, and therefore changes in unrealized gains or losses are included in current-period earnings. Such elections are irrevocable and are applied on an
investment-by-investment basis at initial recognition. Investments are included within other assets in the consolidated and combined statements of financial condition.
Realized and changes in unrealized gains (losses) on these investments are included within net gains (losses) on investments in the consolidated and combined statements of operations. Investments for which the Company has not elected the fair value
option are primarily comprised of equity-method investments in its products. See Note 9 for additional information.
Leases
Right-of-use assets and
liabilities related to operating leases are included within operating lease assets and operating lease liabilities, respectively, in the Companys consolidated and combined statements of financial condition.
The Company adopted Accounting Standards Update (ASU) 2016-02, Leases
(Topic 842), as amended, on January 1, 2021 (ASC 842). The Company did not restate prior periods and there were no adjustments to retained earnings upon adoption of ASC 842. The Company applied the package of practical
expedients permitted under the transition guidance within the new standard, including carrying forward the historical lease classification and not reassessing whether certain costs capitalized under the prior guidance are eligible for capitalization
under ASC 842. The adoption of ASC 842 resulted in the recognition of $13.8 million of operating lease assets and $14.4 million of operating lease liabilities, with the net of these amounts offsetting the deferred rent credit liability in
existence immediately prior to adoption.
The Company determines if an arrangement is a lease at inception. Right-of-use lease assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease
F-17
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
term. Right-of-use lease assets represent the Companys right to use a leased asset for the lease term and
lease liabilities represent the Companys obligation to make lease payments arising from the lease. The Company does not recognize right-of-use lease assets and
lease liabilities for leases with an initial term of one year or less.
As the Companys leases do not provide an
implicit rate, the Company uses its estimated incremental borrowing rate based on information available at the lease commencement date in determining the present value of lease payments. The determination of an appropriate incremental borrowing rate
requires judgment. The Company determines its incremental borrowing rate based on data for instruments with similar characteristics, including recently issued debt, as well as other factors.
The operating lease assets include any lease payments made and lease incentives. Lease terms include options to extend or
terminate when it is reasonably certain that the Company will exercise that option. In addition, the Company separates lease and non-lease components embedded within lease agreements. Lease expense for
operating lease payments is recognized on a straight-line basis, which consists of amortization of right-of-use assets and interest accretion on lease liabilities, over
the lease term and included within general, administrative and other expenses in the consolidated and combined statements of operations. The Company does not have any material finance leases.
Strategic Revenue-Share Purchase Consideration
On September 20, 2021, the Company entered into certain Agreements of Purchase and Sale (the Strategic Revenue-Share
Purchase), whereby certain fund investors relinquished their rights to receive management fee shares with respect to certain existing and future GP Capital Solutions products. In exchange for the foregoing, the Company issued 29,701,013
Class A Shares with a fair value of $455.0 million and paid cash of $50.2 million (net of previously accrued management fee shares payable and other receivable) to such fund investors.
The Company determined that it was not receiving a distinct good or service from the customers as a result of the Strategic
Revenue-Share Purchase, and therefore determined that the consideration paid to the customers represents a reduction of the transaction price (i.e., a reduction to revenue). Accordingly, the total consideration paid was recorded within Strategic
Revenue-Share Purchase consideration in the Companys consolidated statements of financial condition and is being amortized as a reduction of management fees, net in the Companys consolidated statements of operations. See Note 6 for
additional information.
Intangible Assets, Net and Goodwill
The Company recognized certain finite-lived intangible assets and goodwill as a result of the Acquisitions. The Companys
finite-lived intangible assets consist of contractual rights to earn future management fees from the acquired investment management agreements and value associated with the acquired client relationships and trademarks. Finite-lived intangible assets
are amortized on a straight-line basis over their estimated useful lives.
The Company uses its best estimates and
assumptions to accurately assign fair value to identifiable intangible assets acquired at the acquisition date as well as the useful lives of those acquired intangible assets. Examples of critical estimates in valuing certain of the intangible
assets acquired include, but are not limited to, future expected cash inflows and outflows, expected useful life and discount rates. The Companys estimates for future cash flows are based on historical data, various internal estimates and
certain external sources, and are based on assumptions that are consistent with the plans and estimates the Company uses to manage the underlying assets acquired. The Company estimates the useful lives of the
F-18
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
intangible assets based on the expected period over which the Company anticipates generating economic benefit from the asset. The Company bases its estimates on assumptions it believes to be
reasonable but that are unpredictable and inherently uncertain. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results.
The Company tests finite-lived intangible assets for impairment if certain events occur or circumstances change indicating that
the carrying amount of the intangible asset may not be recoverable. The Company evaluates impairment by comparing the estimated fair value attributable to the intangible asset with its carrying amount. If an impairment exists, the Company adjusts
the carrying value to equal the fair value by taking a charge through earnings. No impairments have been recognized to-date on the Companys acquired intangible assets.
Goodwill represents the excess of consideration over identifiable net assets of an acquired business. The Company tests
goodwill annually for impairment. If, after assessing qualitative factors, the Company believes that it is more-likely-than-not that the fair value of the reporting unit inclusive of goodwill is less than its
carrying amount, the Company will perform a quantitative assessment to determine whether an impairment exists. If an impairment exists, the Company adjusts the carrying value of goodwill so that the carrying value of the reporting unit is equal to
its fair value by taking a charge through earnings. The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that it is more-likely-than-not to reduce the
fair value of the reporting unit below its carrying amount. No impairments have been recognized to-date on the Companys goodwill. See Note 3 for additional information.
Fixed Assets
Fixed assets are recorded at cost, less accumulated depreciation and amortization, and are included within other assets, net in
the Companys consolidated and combined statements of financial condition. Fixed assets are depreciated or amortized on a straight-line basis, with the corresponding depreciation and amortization expense included within general, administrative
and other expenses in the Companys consolidated and combined statements of operations. The estimated useful life for leasehold improvements is the lesser of the remaining lease term and the life of the asset, while other fixed assets are
generally depreciated over a period of three to seven years. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Debt Obligations, Net
The Companys debt obligations, other than revolving credit facilities, are recorded at amortized cost, net of any debt
issuance costs, discounts and premiums. Debt issuance costs are deferred and along with discounts and premiums are amortized to interest expense in the consolidated and combined statements of operations over the life of the related debt instrument
using the effective interest method. Unamortized debt issuance costs, discounts and premiums are written off to net losses on retirement of debt in the consolidated and combined statements of operations when the Company prepays borrowings prior to
maturity. The Company defers debt issuance costs associated with revolving credit facilities and presents them within other assets, net in the consolidated and combined statements of financial condition, and such amounts are amortized to interest
expense in the consolidated and combined statements of operations on a straight-line basis over the life of the related facility.
F-19
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
TRA Liability
The tax receivable agreement (TRA) liability represents amounts payable to certain
pre-Business Combination equity holders of Owl Rock and Dyal Capital. The portion of the TRA liability related to the Dyal Acquisition is deemed contingent consideration payable to the previous owners of Dyal
Capital, and therefore is carried at fair value, with changes in fair value reported within other loss in the consolidated and combined statements of operations. The remaining portion of the TRA is carried at a value equal to the expected future
payments due under the TRA. The Company recorded its initial estimate of future payments under the TRA portion that was not related to the Dyal Acquisition as a decrease to additional paid-in capital in the
consolidated and combined statements of financial condition. Subsequent adjustments to the liability for future payments under the tax receivable agreement related to changes in estimated future tax rates or state income tax apportionment are
recognized through current period earnings in the consolidated and combined statements of operations. See Note 11 for additional information.
Warrant Liability
The Companys warrants are recorded as liabilities carried at fair value, with changes in fair value included within other
loss in the Companys consolidated and combined statements of operations.
The Private Placement Warrants contain
exercise and settlement features that may change with a change in the holder, which precludes the Private Placement Warrants from being considered indexed to the Companys own stock, and therefore the Private Placement Warrants are precluded
from being classified within equity and are accounted for as derivative liabilities.
The Public Warrants include a
provision that, in the event of a tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding Class A Shares, all holders of the warrants would be entitled to receive cash for their warrants. Such an event
would not constitute a change in control because the Class A Shares do not represent a majority of the Registrants voting shares. Accordingly, the Public Warrants are also precluded from being classified within equity and are accounted
for as derivative liabilities. This provision also applies to the Private Placement Warrants.
Earnout Liability
Earnout liability is comprised of the Oak Street Cash Earnout (as defined in Note 3) and prior to the Class E Triggering
Events, included the Earnout Securities.
The Oak Street Cash Earnout represents contingent consideration on the Oak Street
Acquisition and is recorded at fair value until the contingency has been resolved, with changes in fair value included within change in earnout liability in the Companys consolidated and combined statements of operations.
Earnout Securities issued in connection with the Dyal Acquisition to the former owners of Dyal Capital who are not part of the
continuing management team were treated as contingent consideration and not considered indexed to the Companys equity. Similarly, Earnout Securities issued to certain former owners of Owl Rock were not considered indexed to the Companys
equity. These Earnout Securities were accounted for as liabilities carried at fair value, with changes in fair value included within change in earnout liability in the Companys consolidated and combined statements of operations. Earnout
Securities issued to certain employees in connection with the Business Combination were treated as compensation for post-combination employment services and accounted for as equity-based compensation. As a result of the Class E Triggering
Events, the Earnout Securities were settled in 2021.
F-20
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Once recognized, earnout liabilities are not derecognized until the
contingencies are resolved and the consideration is paid or becomes payable. Earnout liabilities may expire and upon expiration, the consideration would not be paid or payable.
Noncontrolling Interests
Noncontrolling interests are primarily comprised of Common Units, which are interests in the Blue Owl Operating Group not held
by the Company. Noncontrolling interest also included Seller Earnout Units not held by the Company until such interests were settled upon the satisfaction of the Class E Triggering Events.
Allocations to noncontrolling interests in the consolidated and combined statements of operations are based on the substantive
profit-sharing arrangements in the operating agreements of the Blue Owl Operating Partnerships. The Company does not record income or loss allocations to noncontrolling interests to the extent that such allocations would be provisional in nature,
such as for unvested Incentive Units and Seller Earnout Units (other than certain minimum tax distributions). Provisional allocations to these interests would be subject to reversal in the event the unvested Incentive Units are forfeited or if the
Seller Earnout Units would not have achieved their Class E Triggering Events.
Certain consolidated holding companies
for investment advisor subsidiaries of the Blue Owl Operating Group are partially owned by third-party investors. Such interests are also presented as noncontrolling interests.
Revenue Recognition
Revenues consist of management fees; administrative, transaction and other fees; and realized performance income. The Company
recognizes revenues when such amounts are probable that a significant reversal would not occur. The Company recognizes revenue at the time of transfer of promised goods or services to customers in an amount that reflects the consideration to which
the Company expects to be entitled in exchange for those goods or services (i.e., the transaction price). Under this method, revenue is based on a contract with a determinable transaction price and distinct performance obligations with probable
collectability. Revenues cannot be recognized until the performance obligations are satisfied and control is transferred to the customer.
Management Fees, Net
Management fees are recognized over the period in which the investment management services are performed because customers
simultaneously consume and receive benefits continuously over time. Payment terms and fee rates of management fees vary by product but are generally collected on a quarterly basis and are not subject to clawback.
Management fees for the Companys business development company (BDC) products are typically based on a
percentage of average fair value of gross assets excluding cash. For certain BDCs, the management fee base may also include uncalled capital commitments. For the Companys other Direct Lending products, management fees are typically based on
gross or net asset value or investment cost, and also may include uncalled capital.
Management fees also include a fee
based on the net investment income of the Companys BDCs and similarly structured products (Part I Fees), which are subject to performance hurdles. Such Part I Fees are classified as management fees in the consolidated and combined
statements of operations as they are predictable and recurring in nature, not subject to repayment and cash-settled each quarter.
F-21
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Management fees for the Companys GP minority equity investments
strategy are generally based on a percentage of capital committed during the investment period, and thereafter generally based on the cost of unrealized investments. For the other GP Capital Solutions strategies, management fees are generally
determined based on a percentage of investment cost.
Because management fees, including Part I Fees, are generally cash
settled every quarter, the uncertainty underlying these fees are resolved each quarter. As such, on a quarterly basis, a subsequent significant reversal in relation to the cumulative revenue recognized is not probable for the quarter in arrears.
As discussed above, amortization of the Strategic Revenue-Share Purchase consideration is recorded as a reduction of
management fees, net in the Companys consolidated and combined statements of operations.
Administrative, Transaction and Other
Fees
Administrative, transaction and other fees primarily include fee income, administrative fees and dealer manager
revenue.
Fee income is earned for services provided to portfolio companies, which may include arrangement, syndication,
origination, structuring analysis, capital structure and business plan advice and other services. The fees are generally recognized as income at the point in time when the services rendered are completed, as there is no ongoing performance
requirement.
Administrative fees represent expenses incurred by certain professionals of the Company and reimbursed by
products managed by the Company. The Company may incur certain costs in connection with satisfying its performance obligations under administrative agreements including, but not limited to, employee compensation and travel costs for
which it receives reimbursements from the products it manages. The Company reports these expenses within compensation and benefits and general, administrative and other expenses and reports the related reimbursements as revenues within
administrative, transaction and other fees (i.e., on a gross basis) in the consolidated and combined statements of operations.
Dealer manager revenue consists of commissions earned for providing distribution services to certain products. Dealer manager
revenue is recorded on an accrual basis at the point in time when the services are completed, as there is no ongoing performance requirement.
Realized Performance Income
The Company is entitled to receive certain realized performance income in the form of realized performance income and carried
interest from the products that it manages. Realized performance income is based on the investment performance generated over time, subject to the achievement of minimum return levels in certain products. Realized performance income from the
Companys BDCs and certain products within the GP debt financing strategy (Part II Fees) are realized at the end of a measurement period, typically quarterly or annually. Once realized, such realized performance income is no longer
subject to reversal.
For certain non-BDC Direct Lending products and substantially
all of the GP Capital Solutions products, realized performance income is in the form of carried interest that is allocated to the Company based on cumulative fund performance over time, subject to the achievement of minimum return levels in certain
products. The Company recognizes carried interest only to the extent that it is not probable that a significant reversal will occur for amounts recognized. Generally carried interest is earned after a return of all contributions and may be subject
to a preferred return to investors; however, the Company is able to
F-22
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
catch-up amounts subject to the preferred return in certain cases. Substantially all of the carried interest generated by the Companys products is
allocable to investors, including certain related parties, in vehicles in which the Company does not have a controlling financial interest, and therefore is not included in the Companys consolidated and combined financial statements.
Compensation and Benefits
Cash-Based Compensation
Compensation and benefits consist of salaries, bonuses, commissions, long-term deferral programs, benefits and payroll taxes.
Compensation is accrued over the related service period.
Equity-Based Compensation
Equity-based compensation awards are reviewed to determine whether such awards are equity-classified or liability-classified.
Compensation expense related to equity-classified awards is equal to their grant-date fair value and generally recognized on a straight-line basis over the awards requisite service period. When certain settlement features require an award to
be liability-classified, compensation expense is recognized over the service period, and such amount is adjusted at each balance sheet date through the settlement date to the then current fair value of such award.
The Company accounts for forfeitures on equity-based compensation arrangements as they occur. The Company recognizes deferred
income tax benefits throughout the service period, based on the grant date fair value. Any tax deduction shortfall or windfall due to the difference between grant date fair value and the ultimate deduction taken for tax purposes is recognized at the
time of vesting. Expenses related to equity-based grants to employees are included within compensation and benefits, while amounts related to grants to non-employees are within general, administrative and
other expenses in the consolidated and combined statements of operations.
See Note 8 for additional information on the
Companys equity-based compensation plans.
Foreign Currency
The functional currency of the Companys foreign consolidated subsidiaries is the U.S. dollar, as their operations are
considered extensions of U.S. parent operations. Monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars at the closing rates of exchange on the balance sheet date.
Non-monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars using the historical exchange rate. The profit or loss arising from foreign currency transactions are
remeasured using the rate in effect on the date of any relevant transaction. Gains and losses on transactions denominated in foreign currencies due to changes in exchange rates are recorded within general, administrative and other expenses.
Income Taxes
Prior to the Business Combination, the Companys earnings were subject to New York City unincorporated business tax
(UBT), as well as certain U.S. federal and foreign taxes. Subsequent to the Business Combination, substantially all of the earnings of the Blue Owl Operating Group remain subject to New York City UBT and additionally, the portion of
earnings allocable to the Registrant is subject to corporate tax rates at the U.S. federal and state and local levels. Therefore, the amount of income taxes recorded prior to the Business Combination is not representative of the expenses expected in
the future.
F-23
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Deferred income tax assets and liabilities resulting from temporary
differences between the GAAP and tax bases of assets and liabilities are measured at the balance sheet date using enacted income tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The
Company offsets deferred income tax assets and liabilities for presentation in its consolidated and combined statements of financial condition when such assets and liabilities are within the same taxpayer and related to the same taxing jurisdiction.
The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or
carryforward periods under the enacted tax law in the applicable tax jurisdiction. A valuation allowance is established when management determines, based on available information, that it is
more-likely-than-not that deferred income tax assets will not be realized. Significant judgment is required in determining whether a valuation allowance should be established, as well as the amount of such
valuation allowance.
The Company recognizes uncertain income tax positions when it is not
more-likely-than-not a tax position will be sustained upon examination. If the Company were to recognize an uncertain tax position, the Company would accrue interest and penalties related to uncertain tax
positions as a component of the income tax provision in the consolidated and combined statements of operations.
New Accounting
Pronouncements
The Company considers the applicability and impact of all ASUs issued by the FASB. None of the ASUs
that have been issued but not yet adopted are expected to have a material impact on the Companys consolidated and combined financial statements.
F-24
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
3. |
ACQUISITIONS AND INTANGIBLE ASSETS, NET |
Dyal Acquisition
The following table presents the consideration and net identifiable assets acquired and goodwill related to the Dyal
Acquisition:
|
|
|
|
|
(dollars in thousands) |
|
|
|
Consideration |
|
|
|
Equity consideration(1) |
|
$ |
4,285,359 |
|
Cash consideration(2) |
|
|
973,457 |
|
Tax receivable agreement(3) |
|
|
101,645 |
|
Earnout Securities(3) |
|
|
246,788 |
|
|
|
|
|
|
Total Consideration |
|
$ |
5,607,249 |
|
|
|
|
|
|
Net Identifiable Assets Acquired and Goodwill |
|
|
|
|
Assets acquired: |
|
|
|
|
Due from related parties |
|
$ |
13,442 |
|
Intangible assets: |
|
|
|
|
Investment management agreements |
|
|
1,859,900 |
|
Investor relationships |
|
|
291,400 |
|
Trademarks |
|
|
66,700 |
|
|
|
|
|
|
Total intangible assets |
|
|
2,218,000 |
|
Deferred tax asset |
|
|
29,770 |
|
Other assets, net |
|
|
2,096 |
|
|
|
|
|
|
Total assets acquired |
|
|
2,263,308 |
|
Liabilities assumed: |
|
|
|
|
Accrued compensation |
|
|
7,376 |
|
Deferred tax liability |
|
|
170,753 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
41,352 |
|
|
|
|
|
|
Total liabilities assumed |
|
|
219,481 |
|
|
|
|
|
|
Net Identifiable Assets Acquired |
|
$ |
2,043,827 |
|
|
|
|
|
|
Goodwill(4) |
|
$ |
3,563,422 |
|
|
|
|
|
|
(1) |
Represents share consideration issued to the Dyal Capital selling shareholders based on the fair value of the
acquired business, reflecting a discount for lack of control. |
(2) |
Includes cash consideration paid to reimburse seller for certain
pre-acquisition expenses. |
(3) |
The TRA and Earnout Securities represent contingent consideration. See Note 9 for additional information on the
valuation of these instruments. |
(4) |
Goodwill represents the amount of total consideration in excess of net identifiable assets acquired. None of
the goodwill recognized is expected to be deductible by the Blue Owl Operating Partnerships for tax purposes. |
During the third quarter of 2021, goodwill was adjusted due to a corresponding change in the investor relationship intangible
assets. The acquired investment management agreements, investor relationships and trademarks had a weighted-average amortization period from the date of acquisition of 14.3 years, 10.0 years and 7.0 years, respectively.
F-25
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
In addition, the Company granted Common Units and Earnout Securities that
were treated as equity-based compensation, rather than additional consideration on the acquisition, in connection with the Business Combination. See Note 8 for additional information on these grants.
Dyal Capitals results are included in the Companys consolidated results starting from the Closing Date. For the
year ended December 31, 2021, the Companys consolidated results included $252.9 million of GAAP revenues related to the acquired business. Given the Company operates through one operating and reportable segment, the impact of the
Dyal Acquisition to GAAP consolidated net income is not tracked on a standalone basis. We incurred $166.7 million of acquisition-related costs, of which $40.4 million was expensed and included in general, administrative and other expenses
in the Companys consolidated and combined statements of operations and the remaining $126.3 million was eligible to be netted against consideration.
Oak Street Acquisition
The following table presents the consideration and net identifiable assets acquired and goodwill related to the Oak Street
Acquisition:
|
|
|
|
|
(dollars in thousands) |
|
|
|
Consideration |
|
|
|
Equity consideration(1) |
|
$ |
329,767 |
|
Cash consideration(2) |
|
|
609,820 |
|
Earnout consideration(3) |
|
|
143,800 |
|
|
|
|
|
|
Total Consideration |
|
$ |
1,083,387 |
|
|
|
|
|
|
Net Identifiable Assets Acquired and Goodwill |
|
|
|
|
Assets acquired: |
|
|
|
|
Cash and cash equivalents |
|
$ |
4,411 |
|
Due from related parties |
|
|
13,060 |
|
Operating lease assets |
|
|
1,001 |
|
Intangible assets: |
|
|
|
|
Investment management agreements |
|
|
323,300 |
|
Investor relationships |
|
|
157,400 |
|
Trademarks |
|
|
26,600 |
|
|
|
|
|
|
Total intangible assets |
|
|
507,300 |
|
Other assets, net |
|
|
198 |
|
|
|
|
|
|
Total assets acquired |
|
|
525,970 |
|
Liabilities assumed: |
|
|
|
|
Operating lease liabilities |
|
|
1,001 |
|
Deferred tax liabilities |
|
|
8,587 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
1,818 |
|
|
|
|
|
|
Total liabilities assumed |
|
|
11,406 |
|
|
|
|
|
|
Net Identifiable Assets Acquired |
|
$ |
514,564 |
|
|
|
|
|
|
Goodwill(4) |
|
$ |
568,823 |
|
|
|
|
|
|
(1) |
Represents Common Units issued to Oak Street selling shareholders, reflecting a discount for lack of
marketability. |
F-26
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
(2) |
Includes cash consideration paid to reimburse seller for certain
pre-acquisition expenses. |
(3) |
Represent the fair value of contingent cash consideration payable to certain sellers upon the occurrence of
certain Oak Street Triggering Events as defined below. The amount presented does not include contingent cash and equity payments subject to the same Oak Street Triggering Events that were deemed to be compensation, rather than consideration, as
further discussed below. See Note 9 for additional information on the valuation of this liability. |
(4) |
Goodwill represents the amount of total consideration in excess of net identifiable assets acquired.
Approximately $540.0 million of the goodwill and intangible assets recognized are expected to be deductible by the Blue Owl Operating Partnerships for tax purposes. |
The acquired investment management agreements, investor relationships and trademarks had a weighted-average amortization period
from the date of acquisition of 11.6 years, 13.0 years and 7.0 years, respectively.
For the year ended December 31,
2021, Oak Streets results were not material to the Companys consolidated results, as the transaction closed on December 29, 2021. We incurred $5.8 million of acquisition-related costs, which amount was included in general,
administrative and other expenses in the Companys consolidated and combined statements of operations.
Oak Street Earnouts
The table below summarizes the Oak Street Earnouts and their respective Oak Street Triggering Events. The Oak Street
Triggering Events are subject to meeting a minimum level of quarterly management fees from Oak Street products, and the triggering event for the second tranche may not occur in the same quarter as the first tranche. Oak Street Cash Earnout payable
to a non-employee seller has been classified as contingent consideration on the Oak Street Acquisition, whereas Oak Street Earnouts payable to sellers that are subject to ongoing employment arrangements with
the Company have been classified as compensation and are being amortized over the service period. See Note 8 for additional information on the compensation-classified Oak Street Earnout Units.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands)
Oak Street Earnouts |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Management Fee Trigger |
|
|
Earliest Date Trigger May Occur |
|
|
Cash |
|
|
Units |
|
Contingent consideration: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Oak Street Earnout |
|
$ |
22 million |
|
|
|
January 1, 2023 |
|
|
$ |
81,250 |
|
|
|
|
|
Second Oak Street Earnout |
|
$ |
28 million |
|
|
|
January 1, 2024 |
|
|
|
82,875 |
|
|
|
|
|
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Oak Street Earnout |
|
$ |
22 million |
|
|
|
January 1, 2023 |
|
|
|
43,484 |
|
|
|
13,037,165 |
|
Second Oak Street Earnout |
|
$ |
28 million |
|
|
|
January 1, 2024 |
|
|
|
48,358 |
|
|
|
13,037,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
$ |
255,967 |
|
|
|
26,074,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Financial Information
Unaudited pro forma revenues were $997.4 million and $591.2 million for the years ended December 31, 2021 and
2020, respectively. Unaudited pro forma net income (loss) allocated to Class A Shareholders was $(157.0) million and $(26.0) million for the years ended December 31, 2021 and 2020, respectively. This pro forma financial information was
computed by combining the historical financial information of the predecessor Owl Rock and acquired Dyal Capital and Oak Street businesses as though the acquisitions were consummated on January 1, 2020, assuming a consistent ownership
structure, effective
F-27
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
tax rate and amortization of the fair value of acquired assets as of each acquisition date. The pro forma information does not reflect the potential benefits of cost and funding synergies,
opportunities to earn additional revenues, or other factors, and therefore does not represent what the actual revenues and net income would have been had the businesses actually been combined as of January 1, 2020.
Repurchase of Noncontrolling Interests
In November 2021, the Company repurchased the noncontrolling interests outstanding for a consolidated holding company of one of
its investment advisors. Total cash consideration of $297.1 million was paid using cash on hand. The excess of cash consideration over the book value acquired was recorded as an adjustment to the Companys additional paid-in capital in the consolidated and combined statement of shareholders equity.
Intangible
Assets, Net
The following table summarizes the Companys intangible assets, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
December 31, 2021 |
|
|
Useful Life (in years) |
|
|
Remaining Weighted-Average Amortization Period as of December 31, 2021 |
|
Investment management agreements |
|
$ |
2,183,200 |
|
|
|
1.0 - |
|
|
|
20.0 |
|
|
|
13.4 years |
|
Investor relationships |
|
|
448,800 |
|
|
|
10.0 - |
|
|
|
13.0 |
|
|
|
10.7 years |
|
Trademarks |
|
|
93,300 |
|
|
|
7.0 - |
|
|
|
7.0 |
|
|
|
6.6 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Intangible Assets |
|
|
2,725,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: accumulated amortization |
|
|
(113,889 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Intangible Assets, Net |
|
$ |
2,611,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2021, future amortization of finite-lived intangible assets is
estimated to be:
|
|
|
|
|
(dollars in thousands) |
|
|
|
Period |
|
Amortization |
|
2022 |
|
$ |
247,593 |
|
2023 |
|
|
227,296 |
|
2024 |
|
|
227,919 |
|
2025 |
|
|
224,946 |
|
2026 |
|
|
213,389 |
|
Thereafter |
|
|
1,470,268 |
|
|
|
|
|
|
Total |
|
$ |
2,611,411 |
|
|
|
|
|
|
F-28
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
The table below summarizes outstanding debt obligations of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
(dollars in thousands) |
|
Maturity Date |
|
|
Aggregate Facility Size |
|
|
Outstanding Debt |
|
|
Amount Available |
|
|
Net Carrying Value |
|
|
Average Interest Rate |
|
2031 Notes |
|
|
6/10/2031 |
|
|
$ |
700,000 |
|
|
$ |
700,000 |
|
|
$ |
|
|
|
$ |
684,154 |
|
|
|
3.13 |
% |
2051 Notes |
|
|
10/7/2051 |
|
|
|
350,000 |
|
|
|
350,000 |
|
|
|
|
|
|
|
337,013 |
|
|
|
4.13 |
% |
Revolving Credit Facility |
|
|
12/7/2024 |
|
|
|
640,000 |
|
|
|
153,000 |
|
|
|
487,000 |
|
|
|
153,000 |
|
|
|
1.86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
1,690,000 |
|
|
$ |
1,203,000 |
|
|
$ |
487,000 |
|
|
$ |
1,174,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
|
|
Maturity Date |
|
|
Aggregate Facility Size |
|
|
Outstanding Debt |
|
|
Amount Available |
|
|
Net Carrying Value |
|
|
Average Interest Rate |
|
Prior Revolving Credit Facility #1 |
|
|
2/28/2022 |
|
|
$ |
105,000 |
|
|
$ |
92,895 |
|
|
$ |
10,377 |
|
|
$ |
92,522 |
|
|
|
4.35 |
% |
Prior Revolving Credit Facility #2 |
|
|
8/20/2021 |
|
|
|
22,000 |
|
|
|
17,365 |
|
|
|
4,635 |
|
|
|
17,303 |
|
|
|
4.40 |
% |
Term Loan |
|
|
10/25/2029 |
|
|
|
250,000 |
|
|
|
250,000 |
|
|
|
|
|
|
|
246,561 |
|
|
|
7.86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
377,000 |
|
|
$ |
360,260 |
|
|
$ |
15,012 |
|
|
$ |
356,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts available for the Companys revolving credit facilities as presented in the
tables above are reduced by outstanding letters of credit related to certain leases. Average interest rates exclude the impact of deferred financing costs and undrawn commitment fees.
2031 Notes
On
June 10, 2021, the Company, through its indirect subsidiary, Blue Owl Finance LLC, issued $700.0 million aggregate principal amount of 3.125% Senior Notes due 2031 (the 2031 Notes). The 2031 Notes bear interest at a rate of
3.125% per annum and mature on June 10, 2031. Interest on the 2031 Notes is payable semi-annually in arrears on June 10 and December 10 of each year.
The 2031 Notes are fully and unconditionally guaranteed, jointly and severally, by the Blue Owl Operating Partnerships and
certain of their respective subsidiaries. The guarantees are unsecured and unsubordinated obligations of the guarantors. All or a portion of the 2031 Notes may be redeemed at the Companys option in whole, at any time, or in part, from time to
time, prior to their stated maturity, subject to a make-whole redemption price; provided, however, that if the Company redeems any amounts on or after March 10, 2031, the redemption price for the 2031 Notes will be equal to 100% of the
principal amount of the amounts redeemed, in each case, plus any accrued and unpaid interest. If a change of control repurchase event occurs, the 2031 Notes are subject to repurchase by the Company at a repurchase price in cash equal to 101% of the
aggregate principal amount repurchased plus any accrued and unpaid interest. The 2031 Notes also provide for customary events of default and acceleration.
2051 Notes
On
October 7, 2021, the Company, through its indirect subsidiary, Blue Owl Finance LLC, issued $350.0 million aggregate principal amount of 4.125% Senior Notes due 2051 (the 2051 Notes). The 2051
F-29
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Notes bear interest at a rate of 4.125% per annum and mature on October 7, 2051. Interest on the 2051 Notes is payable semi-annually in arrears on April 7 and October 7 of each
year, commencing April 7, 2022.
The 2051 Notes are fully and unconditionally guaranteed, jointly and severally, by
the Blue Owl Operating Partnerships and certain of their subsidiaries. The guarantees are unsecured and unsubordinated obligations of the guarantors. All or a portion of the 2051 Notes may be redeemed at the Companys option in whole, at any
time, or in part, from time to time, prior to their stated maturity, subject to a make-whole redemption price; provided, however, that if the Company redeems any amounts on or after April 7, 2051, the redemption price for the 2051 Notes will be
equal to 100% of the principal amount of the amounts redeemed, in each case, plus any accrued and unpaid interest. If a change of control repurchase event occurs, the 2051 Notes are subject to repurchase by the Company at a repurchase price in cash
equal to 101% of the aggregate principal amount repurchased plus any accrued and unpaid interest. The 2051 Notes also provide for customary events of default and acceleration. The 2031 Notes and the 2051 Notes are collectively referred to as the
Notes.
Revolving Credit Facility
On December 7, 2021, the Company entered into a new credit facility (Revolving Credit Facility), which was
supplemented on December 23, 2021, and provides the Company with up to $640.0 million of borrowing capacity and replaced the Companys previously existing revolving credit facility. The Revolving Credit Facility matures on
December 7, 2024. In February 2022, the Company increased the capacity of its Revolving Credit Facility to $715.0 million. Borrowings under the Revolving Credit Facility may only be used to finance working capital needs and general
corporate purposes.
Borrowings under the Revolving Credit Facility bear interest at a rate per annum of
(a) adjusted-term secured overnight financing rate (SOFR) plus a margin of 1.25% to 1.875%, or (b) the greater of (i) prime rate, (ii) New York Fed Bank Rate plus 0.50% and (iii) adjusted-term SOFR plus 1%, plus
a margin of 0.25% to 0.875%. The Company is subject to an undrawn commitment fee rate of 0.15% to 0.40% of the daily amount of available revolving commitment. The Revolving Credit Facility contains customary events of defaults, as well as a
financial covenant generally providing for a maximum net leverage ratio of 3.5 to 1. The net leverage ratio is generally calculated as the ratio of total consolidated debt less unrestricted cash and cash equivalents (up to $300.0 million) to
the trailing 12-month consolidated EBITDA (each as defined in the agreement).
Prior
Revolving Credit Facilities
All prior revolving credit facilities were repaid and terminated prior to
December 31, 2021. The Company recognized net losses on early retirement of debt in the amount of $1.5 million during the year ended December 31, 2021, as a result of the write-off of deferred
financing costs related to previously existing revolving credit facilities.
Term Loan
In June 2021, the Company prepaid the $250.0 million term loan agreement (the Term Loan) owed to a product
managed by the Company with proceeds from the 2031 Notes. This prepayment resulted in a net loss on the retirement of debt of $15.8 million, which was inclusive of call protection premium and write-off of
deferred financing costs.
F-30
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
The Company primarily has non-cancelable operating leases for its headquarters in New
York and various other offices. The operating lease for the Companys headquarters does not include any renewal options.
|
|
|
|
|
(dollars in thousands)
Lease Cost |
|
Year Ended December 31, 2021 |
|
Operating lease cost |
|
$ |
7,930 |
|
Short term lease cost |
|
|
286 |
|
|
|
|
|
|
Net Lease Cost |
|
$ |
8,216 |
|
|
|
|
|
|
|
|
|
|
|
Supplement Lease Cash Flow Information |
|
Year Ended December 31, 2021 |
|
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
Operating cash flows for operating leases |
|
$ |
5,956 |
|
Right-of-use
assets obtained in exchange for lease obligations: |
|
|
|
|
Operating leases |
|
$ |
78,677 |
|
|
|
|
|
|
Lease Term and Discount Rate |
|
December 31, 2021 |
|
Weighted-average remaining lease term: |
|
|
|
|
Operating leases |
|
|
10.2 years |
|
Weighted-average discount rate: |
|
|
|
|
Operating leases |
|
|
3.1 |
% |
|
|
|
|
|
Future Maturity of Operating Lease Payments |
|
Operating Leases |
|
2022 (1) |
|
$ |
1,199 |
|
2023 |
|
|
12,672 |
|
2024 |
|
|
10,062 |
|
2025 |
|
|
9,964 |
|
2026 |
|
|
9,799 |
|
Thereafter |
|
|
61,957 |
|
|
|
|
|
|
Total Lease Payments |
|
|
105,653 |
|
Imputed interest |
|
|
(17,173 |
) |
|
|
|
|
|
Total Lease Liabilities |
|
$ |
88,480 |
|
|
|
|
|
|
(1) |
Presented net of $8.0 million of tenant improvement allowance and reflects the impact of a
$4.8 million rent holiday period on certain leases. |
F-31
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
The following table presents a disaggregated view of the Companys revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(dollars in thousands) |
|
2021 |
|
|
2020 |
|
|
2019 |
|
Direct Lending Products |
|
|
|
|
|
|
|
|
|
|
|
|
Diversified lending |
|
$ |
348,363 |
|
|
$ |
140,153 |
|
|
$ |
87,268 |
|
Technology lending |
|
|
66,089 |
|
|
|
42,052 |
|
|
|
24,706 |
|
First lien lending |
|
|
15,185 |
|
|
|
12,335 |
|
|
|
11,983 |
|
Opportunistic lending |
|
|
3,993 |
|
|
|
366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management Fees, Net |
|
|
433,630 |
|
|
|
194,906 |
|
|
|
123,957 |
|
Administrative, transaction and other fees |
|
|
131,461 |
|
|
|
54,909 |
|
|
|
66,893 |
|
Realized performance income |
|
|
5,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP RevenuesDirect Lending Products |
|
|
570,997 |
|
|
|
249,815 |
|
|
|
190,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GP Capital Solutions Products |
|
|
|
|
|
|
|
|
|
|
|
|
GP minority equity investments |
|
|
233,505 |
|
|
|
|
|
|
|
|
|
GP debt financing |
|
|
10,215 |
|
|
|
|
|
|
|
|
|
Professional sports minority investments |
|
|
477 |
|
|
|
|
|
|
|
|
|
Strategic Revenue-Share Purchase consideration amortization |
|
|
(9,892 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management Fees, Net |
|
|
234,305 |
|
|
|
|
|
|
|
|
|
Administrative, transaction and other fees |
|
|
18,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP RevenuesGP Capital Solutions Products |
|
|
252,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP Revenues |
|
$ |
823,878 |
|
|
$ |
249,815 |
|
|
$ |
190,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-32
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
The table below presents the beginning and ending balances of the
Companys management fees, realized performance income and administrative, transaction and other fees receivable and unearned management fees. Substantially all of the amounts receivable are collected during the following quarter. A liability
for unearned management fees is generally recognized when management fees are paid to the Company in advance. The entire change in unearned management fees shown below relates to amounts recognized as revenues in the current year period. Management
fees, realized performance income and administrative, transaction and other fees receivable are included within due from related parties and unearned management fees are included within accounts payable, accrued expenses and other liabilities in the
Companys consolidated and combined statements of financial condition.
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(dollars in thousands) |
|
2021 |
|
|
2020 |
|
Management Fees Receivable |
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
78,586 |
|
|
$ |
32,473 |
|
Ending balance |
|
$ |
168,057 |
|
|
$ |
78,586 |
|
Administrative, Transaction and Other Fees Receivable |
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
9,876 |
|
|
$ |
8,667 |
|
Ending balance |
|
$ |
19,535 |
|
|
$ |
9,876 |
|
Realized Performance Income Receivable |
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
Ending balance |
|
$ |
10,496 |
|
|
$ |
|
|
Unearned Management Fees |
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
11,846 |
|
|
$ |
|
|
Ending balance |
|
$ |
10,299 |
|
|
$ |
11,846 |
|
The table below presents the changes in the Companys Strategic Revenue-Share Purchase
consideration. The consideration paid, which includes $455.0 million paid in Class A Shares and the remainder in cash, is being amortized as a reduction of management fees, net in the Companys consolidated statements of operations
over a weighted-average period of 12 years, which represents the average period over which the related customer revenues are expected to be recognized.
|
|
|
|
|
(dollars in thousands) |
|
Strategic Revenue-Share Purchase Consideration |
|
December 31, 2020 |
|
$ |
|
|
Consideration paid |
|
|
505,214 |
|
Amortization |
|
|
(9,892 |
) |
|
|
|
|
|
December 31, 2021 |
|
$ |
495,322 |
|
|
|
|
|
|
F-33
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
December 31, 2021 |
|
|
December 31, 2020 |
|
Fixed assets, net: |
|
|
|
|
|
|
|
|
Leasehold improvements |
|
$ |
6,692 |
|
|
$ |
2,133 |
|
Furniture and fixtures |
|
|
1,631 |
|
|
|
1,612 |
|
Computer hardware and software |
|
|
1,968 |
|
|
|
1,286 |
|
Accumulated depreciation and amortization |
|
|
(2,340 |
) |
|
|
(1,675 |
) |
|
|
|
|
|
|
|
|
|
Fixed assets, net |
|
|
7,951 |
|
|
|
3,356 |
|
Investments (includes $1,311 and $ at fair value and $8,522 and $5 of investments in the
Companys products) |
|
|
12,143 |
|
|
|
2,678 |
|
Prepaid expenses |
|
|
8,496 |
|
|
|
874 |
|
Deferred transaction costs |
|
|
347 |
|
|
|
8,255 |
|
Other assets |
|
|
9,683 |
|
|
|
1,306 |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
38,620 |
|
|
$ |
16,469 |
|
|
|
|
|
|
|
|
|
|
8. |
EQUITY-BASED COMPENSATION |
The Company grants equity-based compensation awards in the form of RSUs and Incentive Units to its management, employees and
independent members of the Board under the 2021 Omnibus Equity Incentive Plan (2021 Equity Incentive Plan). The total number of Class A Shares and Blue Owl Operating Group Units, collectively, that may be issued under the 2021
Equity Incentive Plan is 101,230,522, of which 51,115,613 remain available as of December 31, 2021. To the extent that an award expires or is canceled, forfeited, terminated, surrendered, exchanged or withheld to cover tax withholding
obligations, the unissued awards will again be available for grant under the 2021 Equity Incentive Plan.
In connection
with the Business Combination, the Company granted Common Units and Seller Earnout Units, which grants were not made under the 2021 Equity Incentive Plan. A portion of these Common Units and Seller Earnout Units were granted to certain pre-Business Combination owners that are also ongoing members of management. As a result, these grants were accounted for as equity-based compensation and are included in the disclosures below.
In connection with the Oak Street Acquisition, the Company has agreed to contingently issue 26,074,330 Common Units upon
achieving the Oak Street Triggering Events described in Note 3. These Oak Street Earnout Units were granted to certain sellers that are subject to ongoing employment arrangements with the Company, and are therefore being accounted for as
equity-based compensation grants subject to performance vesting conditions that are probable of occurring.
F-34
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
The table below presents information regarding equity-based compensation
expense included within compensation and benefits in the Companys consolidated and combined statements of operations. As of December 31, 2021, no RSUs have been settled in cash or Class A Shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(dollars in thousands) |
|
2021 |
|
|
2020 |
|
|
2019 |
|
Included within compensation and benefits: |
|
|
|
|
|
|
|
|
|
|
|
|
Common Units |
|
$ |
1,121,139 |
|
|
$ |
|
|
|
$ |
|
|
Seller Earnout Units |
|
|
63,031 |
|
|
|
|
|
|
|
|
|
Oak Street Earnout Units |
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Units |
|
|
13,469 |
|
|
|
|
|
|
|
|
|
RSUs |
|
|
6,480 |
|
|
|
|
|
|
|
|
|
Included within general, administrative and other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Units |
|
|
1,066 |
|
|
|
|
|
|
|
|
|
RSUs |
|
|
151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-Based Compensation Expense |
|
$ |
1,205,336 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corresponding tax benefit |
|
$ |
123 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below presents activity related to the Companys unvested equity-based
compensation awards for the year ended December 31, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Units |
|
|
Seller Earnout Units |
|
|
Oak Street Earnout Units |
|
|
|
Number of Units |
|
|
Weighted-Average Grant Date Fair Value Per Unit |
|
|
Number of Units |
|
|
Weighted-Average Grant Date Fair Value Per Unit |
|
|
Number of Units |
|
|
Weighted-Average Grant Date Fair Value Per Unit |
|
December 31, 2020 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
Granted |
|
|
132,808,673 |
|
|
|
9.00 |
|
|
|
11,608,004 |
|
|
|
5.43 |
|
|
|
26,074,330 |
|
|
|
12.53 |
|
Vested |
|
|
(132,808,673 |
) |
|
|
9.00 |
|
|
|
(11,608,004 |
) |
|
|
5.43 |
|
|
|
|
|
|
|
|
|
Forfeited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
26,074,330 |
|
|
$ |
12.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Units |
|
|
RSUs |
|
|
|
Number of Units |
|
|
Weighted-Average Grant Date Fair Value Per Unit |
|
|
Number of Units |
|
|
Weighted-Average Grant Date Fair Value Per Unit |
|
December 31, 2020 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
Granted |
|
|
23,294,373 |
|
|
|
13.87 |
|
|
|
12,022,943 |
|
|
|
13.92 |
|
Modified from liability award |
|
|
|
|
|
|
|
|
|
|
9,050,000 |
|
|
|
10.00 |
|
Vested |
|
|
(163,528 |
) |
|
|
14.56 |
|
|
|
(10,941,339 |
) |
|
|
10.75 |
|
Forfeited |
|
|
(50,000 |
) |
|
|
14.02 |
|
|
|
(13,500 |
) |
|
|
14.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
23,080,845 |
|
|
|
13.87 |
|
|
|
10,118,104 |
|
|
$ |
13.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Units
Prior to the Business Combination, certain members of Dyal Capital were entitled to receive rights to distributions of certain
future profits (the Profit Interest Units) that were subject to certain forfeiture conditions. Immediately preceding the Business Combination, the forfeiture conditions of the Profit Interest
F-35
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Units were modified to eliminate any future service requirements and were replaced with Common Units on the Business Combination Date. The Company recognized a
one-time non-cash equity-based compensation expense of $1.1 billion related to the replacement award, which represents the fair value under GAAP of the replacement
awards (excluding the portion attributable to the Profit Interest Units prior to the Business Combination, which was included as equity consideration in Note 3). The fair value of the Common Units replacement award was based on the Companys
Class A Share price on the transaction date with the application of a 10% discount for lack of marketability.
Seller Earnout
Units
The fair value of the Seller Earnout Units was determined using a Monte Carlo simulation valuation model,
with the following assumptions: volatility of 22%, discount for lack of marketability of 12% and expected holding period of approximately 3 years. As a result of the Class E Triggering Events in 2021, the Company recognized all of the
compensation expense related to the Seller Earnout Units and no unamortized expense remained as of December 31, 2021.
Oak
Street Earnout Units
The fair value of the Oak Street Earnout Units was determined using a Monte Carlo simulation
valuation model, with the following weighted average assumptions: annualized revenue volatility of 38%, revenue discount rate of 15%, discount for lack of marketability of 13% and expected holding period of approximately 2 years. As of
December 31, 2021, unamortized expense related to the Oak Street Earnout Units was $326.6 million, with a weighted average amortization period of 2 years.
Incentive Units
During the fourth quarter of 2021, the Company granted Incentive Units in connection with the closing of the Business
Combination, as well as other compensation-related grants. The Company also converted various previously existing deferred cash compensation awards, which resulted in the reclassification of $5.3 million of previously accrued compensation
liability to equity on the conversion date. The remaining fair value of the replacement awards will be expensed over the remaining service period.
The grant date fair value of Incentive Units was determined using the Companys Class A Share price on the grant
date, adjusted for the lack of dividend participation during the vesting period, and the application of an 11% to 12% discount for lack of marketability on certain Incentive Units that are subject to a
one-year post-vesting transfer restriction.
As of December 31, 2021,
unamortized expense related to Incentive Units was $303.9 million, with a weighted average amortization period of 4.6 years.
RSUs
RSUs
Modified from Liability Award on Business Combination Date
On September 15, 2020, the Company issued an award
that was based on the fair value of Owl Rock and that was fully vested upon issuance. The original terms of the award required cash settlement at a future date and was, therefore, classified as a liability that was remeasured to its settlement value
at each reporting period. The Company recorded compensation expense and a corresponding liability of $90.5 million in 2020 related to the award. Prior to and contingent on the close of the Business Combination, the Company
F-36
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
modified this award to be settled in 9,050,000 RSUs that were immediately vested but would be settled in Class A Shares in future years. The modification did not result in any
incremental compensation expense, as the value immediately prior to modification was greater than the value immediately following the modification. Accordingly, the Company reclassified the existing liability to equity on the Business Combination
Date.
Other RSU Grants
During the fourth quarter of 2021, the Company granted RSUs in connection with the closing of the Business Combination, as well
as other compensation-related grants. The Company also converted various previously existing deferred cash compensation awards, which resulted in the reclassification of $56.8 million of previously accrued compensation liability to equity on
the conversion date. The remaining fair value of the replacement awards will be expensed over the remaining service period.
The fair value of RSUs was determined using the Companys Class A Share price on the grant date, adjusted for the
lack of dividend participation during the vesting period, and the application of an 11% to 12% discount for lack of marketability on RSUs that are subject to a one-year post-vesting transfer restriction.
As of December 31, 2021, unamortized expense related to RSUs was $104.1 million, with a weighted average amortization
period of 3.7 years.
9. |
FAIR VALUE DISCLOSURES |
Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly
transaction between market participants as of the measurement date (i.e., an exit price). The Company and the products it manages hold a variety of assets and liabilities, certain of which are not publicly traded or that are otherwise illiquid.
Significant judgement and estimation go into the assumptions that drive the fair value of these assets and liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, prices from
third parties (including independent pricing services and relevant broker quotes), models or other valuation methodologies based on pricing inputs that are neither directly nor indirectly market observable. Due to the inherent uncertainty of
valuations of assets and liabilities that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material.
GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price
observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the financial assets and liabilities. Financial assets and liabilities with readily available, actively quoted prices
or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value.
Financial assets and liabilities measured at fair value are classified and disclosed into one of the following categories based
on the observability of inputs used in the determination of fair values:
|
|
|
Level I Quoted prices that are available in active markets for identical financial assets or liabilities
as of the reporting date. |
|
|
|
Level II Valuations obtained from independent third-party pricing services, the use of models or other
valuation methodologies based on pricing inputs that are either directly or indirectly market |
F-37
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
|
observable as of the measurement date. These financial assets and liabilities exhibit higher levels of liquid market observability as compared to Level III financial assets and liabilities.
|
|
|
|
Level III Pricing inputs that are unobservable in the market and includes situations where there is
little, if any, market activity for the financial asset or liability. The inputs into the determination of fair value of financial assets and liabilities in this category may require significant management judgment or estimation. The fair value of
these financial assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, models or other valuation methodologies based on pricing inputs that are neither directly nor indirectly market
observable (e.g., cash flows, implied yields). |
In certain cases, the inputs used to measure fair value
may fall into different levels of the fair value hierarchy. In such cases, a financial asset or liabilitys level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The
assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial asset or liability when the fair value is based on unobservable inputs.
Fair Value Measurements Categorized within the Fair Value Hierarchy
The table below summarizes the Companys assets and liabilities measured at fair value on a recurring basis as of
December 31, 2021. The Company did not have any assets or liabilities measured at fair value on a recurring basis as of December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
(dollars in thousands) |
|
Level I |
|
|
Level II |
|
|
Level III |
|
|
Total |
|
Investments, at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
$ |
|
|
|
$ |
1,311 |
|
|
$ |
|
|
|
$ |
1,311 |
|
Liabilities, at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRA liability |
|
$ |
|
|
|
$ |
|
|
|
$ |
111,325 |
|
|
$ |
111,325 |
|
Warrant liability |
|
|
43,048 |
|
|
|
|
|
|
|
25,750 |
|
|
|
68,798 |
|
Earnout liability |
|
|
|
|
|
|
|
|
|
|
143,800 |
|
|
|
143,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities, at Fair Value |
|
$ |
43,048 |
|
|
$ |
|
|
|
$ |
280,875 |
|
|
$ |
323,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-38
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Reconciliation of Fair Value Measurements Categorized within Level III
Unrealized gains and losses on the Companys liabilities carried at fair value on a recurring basis are included within
other loss in the consolidated and combined statements of operations. There were no transfers in or out of Level III. The following table sets forth a summary of changes in the fair value of the Level III measurements for the year ended
December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
Level III Liabilities |
|
|
|
TRA Liability |
|
|
Warrant Liability |
|
|
Earnout Liability |
|
|
Total |
|
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Issuances |
|
|
101,645 |
|
|
|
9,131 |
|
|
|
635,077 |
|
|
|
745,853 |
|
Settlements |
|
|
|
|
|
|
|
|
|
|
(1,325,532 |
) |
|
|
(1,325,532 |
) |
Net losses |
|
|
9,680 |
|
|
|
16,619 |
|
|
|
834,255 |
|
|
|
860,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance |
|
$ |
111,325 |
|
|
$ |
25,750 |
|
|
$ |
143,800 |
|
|
$ |
280,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net unrealized losses on liabilities still recognized at the reporting date |
|
$ |
9,680 |
|
|
$ |
16,619 |
|
|
$ |
|
|
|
$ |
26,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The settlement of Earnout Securities and additional TRA resulting from the settlement of such
liability are non-cash transactions, and as such have not been reflected in the consolidated and combined statements of cash flows.
Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III
Corporate Bonds
The fair value of corporate bonds are estimated based on quoted market prices, dealer quotations or alternative pricing sources
supported by observable inputs. These investments are generally classified as Level II. The Company obtains prices from independent pricing services that generally utilize broker quotes and may use various other pricing techniques, which take into
account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data.
TRA
Liability
The TRA related to the Dyal Acquisition is considered contingent consideration and is measured at fair value
based on discounted future cash flows. The remaining TRA liability on the Companys consolidated and combined statements of financial condition is not measured at fair value.
Warrant Liability
The Company uses a Monte Carlo simulation model to value the Private Placement Warrants. The Company estimates the volatility
of its Class A Shares based on the volatility implied by the Public Warrants. The risk-free interest rate is based on U.S. Treasuries for a maturity similar to the expected remaining life of the warrants. The expected term of the warrants is
assumed to be equivalent to their remaining contractual term. The Public Warrants are traded on the NYSE and are stated at the last reported sales price without any valuation adjustments, and therefore are classified as Level I.
F-39
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Earnout Liability
The fair value of the earnout liability was comprised of the Earnout Securities, which were settled prior to December 31,
2021, and the Oak Street Cash Earnout that was deemed to be contingent consideration on the Oak Street Acquisition.
The
fair value of the Earnout Securities was determined using a Monte Carlo simulation model. The Company estimated the volatility of its Class A Shares based on the volatility implied by a review of historical volatility for similar publicly
traded companies over a horizon that matched the expected remaining life of the Earnout Securities at each measurement date and the risk-free interest rate was based on U.S. Treasuries for a maturity similar to the expected remaining life.
The fair value of the Oak Street Cash Earnout was determined using a Monte Carlo simulation model. The model incorporates
management revenue forecast and makes the following adjustments: historical revenue volatility, risk free rate based on U.S. Treasuries for a maturity similar to the expected remaining life and a discount rate to adjust managements revenue
forecast from a risk-based forecast to a risk-neutral forecast.
Quantitative Inputs and Assumptions for Fair Value Measurements
Categorized within Level III
The following table summarizes the quantitative inputs and assumptions used for the
Companys Level III measurements as of December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
Fair Value |
|
|
Valuation Technique |
|
|
Significant Unobservable Inputs |
|
|
Input |
|
|
Impact to Valuation from an Increase in Input |
|
TRA liability |
|
$ |
111,325 |
|
|
|
Discounted cash flow |
|
|
|
Discount rate |
|
|
|
10 |
% |
|
|
Decrease |
|
Warrant liability |
|
|
25,750 |
|
|
|
Monte Carlo simulation |
|
|
|
Volatility |
|
|
|
26 |
% |
|
|
Increase |
|
Earnout liability |
|
|
143,800 |
|
|
|
Monte Carlo simulation |
|
|
|
Revenue volatility |
|
|
|
38 |
% |
|
|
Increase |
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate |
|
|
|
15 |
% |
|
|
Decrease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities, at Fair Value |
|
$ |
280,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value of Other Financial Instruments
Management estimates that the carrying value of the Companys other investments and debt obligations, which are not
carried at fair value, approximated their fair values as of December 31, 2021. The fair value measurements for the Companys other investments are categorized as Level III and its debt obligations are categorized as Level I within the fair
value hierarchy.
The Companys income tax provision and related income tax assets and liabilities are based on, among other things, an
estimate of the impact of the Business Combination and exchanges of Common Units for Class A Shares, inclusive of an analysis of tax basis and state tax implications of the Blue Owl Operating Group and their underlying assets and liabilities.
The Companys estimate is based on the most recent information available; however, the impact of the Business Combination cannot be finally determined until the Companys 2021 tax returns have been filed. The tax basis and state impact of
the Blue Owl Operating Group and their underlying assets and liabilities are based on estimates subject to finalization of the Companys tax returns, and the impact of the Business Combination may differ, possibly materially, from the current
estimates described herein.
F-40
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
The Blue Owl Operating Partnerships, and prior to the Business Combination,
Owl Rock, are partnerships for U.S. federal income tax purposes subject to New York City unincorporated business tax (UBT). Effective upon the consummation of the Business Combination, generally all of the income the Registrant earns
will be subject to corporate-level income taxes in the United States. Further, the amount of income taxes recorded prior to the Business Combination are not representative of the expenses expected in the future. Substantially all of the
Companys income before tax is earned in the United States.
The following table presents the components of the
Companys income tax expense (benefit):
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Current Income Tax Expense (Benefit) |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
State and local |
|
|
716 |
|
|
|
359 |
|
|
|
81 |
|
Foreign |
|
|
211 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
927 |
|
|
|
373 |
|
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Income Tax Expense (Benefit) |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal |
|
|
(43,905 |
) |
|
|
|
|
|
|
|
|
State and local |
|
|
(22,232 |
) |
|
|
(475 |
) |
|
|
159 |
|
Foreign |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(66,138 |
) |
|
|
(475 |
) |
|
|
159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Income Tax Expense (Benefit) |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal |
|
|
(43,905 |
) |
|
|
|
|
|
|
|
|
State and local |
|
|
(21,516 |
) |
|
|
(116 |
) |
|
|
240 |
|
Foreign |
|
|
210 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(65,211 |
) |
|
$ |
(102 |
) |
|
$ |
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth the reconciliation of the Companys effective rate to the
statutory rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Statutory rate(1) |
|
|
21.00 |
% |
|
|
4.00 |
% |
|
|
4.00 |
% |
Income passed through to noncontrolling interest holders |
|
|
-14.95 |
% |
|
|
|
% |
|
|
|
% |
State and local income taxes |
|
|
0.98 |
% |
|
|
-3.73 |
% |
|
|
0.10 |
% |
Non-deductible compensation expense |
|
|
-3.54 |
% |
|
|
-0.08 |
% |
|
|
-3.28 |
% |
Other |
|
|
|
% |
|
|
-0.07 |
% |
|
|
0.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Effective Rate |
|
|
3.49 |
% |
|
|
0.12 |
% |
|
|
1.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The statutory rate presented is using the U.S. federal corporate tax rate for the year ended December 31,
2021, and the UBT rate for the years ended December 31, 2020 and 2019. |
F-41
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
As of December 31, 2021 and 2020 the income tax effects of temporary
differences that give rise to significant portions of deferred tax assets and liabilities were as follows:
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
December 31, 2021 |
|
|
December 31, 2020 |
|
Deferred Tax Assets |
|
|
|
|
|
|
|
|
Basis difference in subsidiaries |
|
$ |
439,826 |
|
|
$ |
69 |
|
Tax receivable agreement |
|
|
158,616 |
|
|
|
|
|
Net operating losses |
|
|
36,500 |
|
|
|
180 |
|
Other |
|
|
2,057 |
|
|
|
551 |
|
|
|
|
|
|
|
|
|
|
Deferred Tax Assets |
|
$ |
636,999 |
|
|
$ |
800 |
|
|
|
|
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
47,924 |
|
|
|
|
|
Other |
|
|
2,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Liabilities |
|
$ |
50,337 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
The Company has U.S. federal and UBT net operating losses of $152.1 million and
$9.6 million, respectively, that can be carried forward indefinitely until they are used. The Company evaluates the realizability of its deferred tax assets on a quarterly basis and may recognize or adjust any valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax asset may not be realized. The Company believes it is more-likely-than-not that its deferred tax assets will be
realized based on historic and projected earnings and the reversal of taxable temporary differences. As of December 31, 2021, the Company has not recorded any valuation allowances.
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course
of business, the tax years that remain open under the statute of limitations will be subject to examinations by the appropriate tax authorities. The Company is generally no longer subject to state or local examinations by tax authorities for tax
years prior to 2017.
As of December 31, 2021, the Company has not recorded any unrecognized tax positions and does
not expect a material increase or decrease in gross unrecognized tax positions in the next 12 months. No penalties or interest were incurred during the years ended December 31, 2021, 2020 and 2019.
In connection with and subsequent to the Business Combinations, the Company recorded to additional paid-in capital various adjustments to deferred tax assets and liabilities, as well as related impacts to the TRA liability, related to capital transactions. These adjustments primarily resulted from differences
between the Companys GAAP and tax basis in its investment in the Blue Owl Operating Partnerships, as well as portions related to the TRA liability that will eventually lead to additional tax basis in the Blue Owl Operating Partnerships upon
future TRA payments. The deferred tax assets will be recovered as the basis is amortized. See the Companys consolidated and combined statements of shareholders equity for these amounts.
11. |
COMMITMENTS AND CONTINGENCIES |
Tax Receivable Agreement
Pursuant to the TRA, the Company will pay 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed
to realize) as a result of any increases in tax basis of the assets of the Blue Owl Operating Group related to the Business Combination and any subsequent exchanges of Blue Owl Operating Group Units for shares of the Registrant or cash.
F-42
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Payments under the TRA will continue until all such tax benefits have been
utilized or expired unless (i) the Company exercises its right to terminate the TRA and paying recipients an amount representing the present value of the remaining payments, (ii) there is a change of control or (iii) the Company
breaches any of the material obligations of the TRA, in which case all obligations will generally be accelerated and due as if the Company had exercised its right to terminate the TRA. In each case, if payments are accelerated, such payments will be
based on certain assumptions, including that the Company will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions.
The estimate of the timing and the amount of future payments under the TRA involves several assumptions that do not account for
the significant uncertainties associated with these potential payments, including an assumption that the Company will have sufficient taxable income in the relevant tax years to utilize the tax benefits that would give rise to an obligation to make
payments.
The table below presents managements estimate as of December 31, 2021, of the maximum amounts that
would be payable under the TRA assuming that the Company will have sufficient taxable income each year to fully realize the expected tax savings. In light of the numerous factors affecting the Companys obligation to make such payments, the
timing and amounts of any such actual payments may differ materially from those presented in the table.
|
|
|
|
|
(dollars in thousands) |
|
Potential Payments Under the Tax Receivable Agreement |
|
2022 |
|
$ |
|
|
2023 |
|
|
44,059 |
|
2024 |
|
|
47,486 |
|
2025 |
|
|
56,735 |
|
2026 |
|
|
47,642 |
|
Thereafter |
|
|
595,661 |
|
|
|
|
|
|
Total Payments |
|
$ |
791,583 |
|
Less adjustment to fair value for contingent consideration |
|
|
(120,907 |
) |
|
|
|
|
|
Total TRA Liability |
|
$ |
670,676 |
|
|
|
|
|
|
Unfunded Product Commitments
As of December 31, 2021, the Company had unfunded investment commitments to its products of $46.5 million, which is
exclusive of commitments that employees and other related parties have directly to the Companys products.
Indemnification and
Guarantee Arrangements
In the normal course of business, the Company enters into contracts that contain
indemnities or guarantees for related parties of the Company, including the Companys products, as well as persons acting on behalf of the Company or such related parties and third parties. The terms of the indemnities and guarantees vary from
contract to contract and the Companys maximum exposure under these arrangements cannot be determined or the risk of material loss is remote, and therefore no amounts have been recorded in the consolidated statements of financial condition. As
of December 31, 2021, the Company has not had prior claims or losses pursuant to these arrangements.
F-43
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
Litigation
From time to time, the Company is involved in legal actions in the ordinary course of business. Although there can be no
assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results
of operations, financial condition or cash flows.
12. |
RELATED PARTY TRANSACTIONS |
The majority of the Companys revenues, including all management fees and certain administrative, transaction and other
fees, are earned from the products it manages, which are related parties of the Company.
The Company also has arrangements
in place with products that it manages, whereby certain costs are initially paid by the Company and subsequently are reimbursed by the products. These amounts are included within due from related parties in the Companys consolidated and
combined statements of financial condition.
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
December 31, 2021 |
|
|
December 31, 2020 |
|
Management fees |
|
$ |
168,057 |
|
|
$ |
78,586 |
|
Realized performance income |
|
|
10,496 |
|
|
|
|
|
Administrative fees and other expenses paid on behalf of the Companys products and other
related parties |
|
|
46,023 |
|
|
|
14,112 |
|
|
|
|
|
|
|
|
|
|
Due from Related Parties |
|
$ |
224,576 |
|
|
$ |
92,698 |
|
|
|
|
|
|
|
|
|
|
Reimbursements from the Companys Products
Administrative fees represent allocable compensation and other expenses incurred by the Company, pursuant to administrative and
other agreements, that are reimbursed by products it manages. These administrative fees are included within administrative, transaction and other fees on the consolidated and combined statements of operations and totaled $37.2 million,
$13.0 million and $12.0 million during the years ended December 31, 2021, 2020 and 2019, respectively.
Dealer
Manager Revenues
Dealer manager revenues represent commissions earned from certain of the Companys products
for distribution services provided. These dealer manager revenues are included within administrative, transaction and other fees on the consolidated and combined statements of operations and totaled $8.2 million, $3.9 million and
$9.6 million during the years ended December 31, 2021, 2020 and 2019, respectively.
Expense Support and Caps Arrangements
The Company is party to expense support and cap arrangements with certain of the products it manages. Pursuant to
these arrangements, the Company may absorb certain expenses of these products when in excess of stated expense caps or until such products reach certain profitability and cash flow
F-44
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
thresholds. In certain cases, the Company is able to recover these expenses once certain profitability and cash flow thresholds are met. The Company recorded net expenses (recoveries) related to
these arrangements of $(3.2) million, $18.7 million and $7.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. These net expenses (recoveries) are included in general, administrative and other expenses
within the consolidated and combined statements of operations.
Aircraft and Other Services
In the normal course of business, the Company reimburses certain related parties for business use of their aircraft based on
current market rates. Personal use of the aircraft is not charged to the Company. The Company recorded expenses for these aircraft reimbursements of $0.6 million, $0.9 million and $1.0 million for the years ended December 31,
2021, 2020 and 2019, respectively.
Promissory Note
The Company was a party to an interest-bearing promissory note with a product it manages, allowing the product to borrow from
the Company up to an aggregate of $50.0 million. The Company lent and was repaid $30.0 million and recorded $4 thousand of interest income during the year ended December 31, 2020. The unpaid principal balance and accrued interest
were payable on demand upon 120 days written notice by the Company. The promissory note matured on December 31, 2020.
13. |
EARNINGS (LOSS) PER SHARE |
Basic earnings (loss) per share attributable to Class A Shareholders is computed by dividing the earnings or loss
attributable to Class A Shares by the weighted-average number of shares of Class A Shares outstanding during the period.
Seller Earnout Units are included in the denominator in computing dilutive earnings (loss) per Class A Share only when a
Class E Triggering Event has occurred, and therefore the contingency has been met. As of December 31, 2021, the Class E Triggering Events on the E-2 Seller Earnout Units have been met.
The table below presents the Companys treatment for basic and diluted earnings (loss) per share for instruments
outstanding at the Registrant and the Blue Owl Operating Group. Potentially dilutive instruments are only considered in the calculation to the extent they would be dilutive.
|
|
|
|
|
|
|
Basic |
|
Diluted |
Class A Shares |
|
Included |
|
Included |
Class B Shares |
|
N/ANone outstanding |
|
N/ANone outstanding |
Class C Shares and Class D Shares |
|
Excluded Non-economic voting shares of the Registrant |
|
Excluded Non-economic voting shares of the Registrant |
Vested RSUs(1) |
|
Included Contingently issuable shares |
|
Included Contingently issuable shares |
Unvested RSUs |
|
Excluded |
|
Included Treasury stock method |
Warrants |
|
Excluded |
|
Included
Treasury stock method(4) |
F-45
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
|
|
|
|
|
|
|
Basic |
|
Diluted |
Potentially Dilutive Instruments of the Blue Owl Operating Group: |
|
|
|
|
|
|
|
Vested Common and Incentive Units |
|
Excluded |
|
Included
If-converted method(5) |
Unvested Incentive Units |
|
Excluded |
|
Included
The Company first applies the treasury stock method to determine the number of units that would have been issued, then applies the if-converted method to the resulting number of units(5) |
Oak Street Earnout Units(2) |
|
Excluded |
|
Excluded Performance condition not satisfied as of year end |
Earnout Securities(3) |
|
Excluded |
|
Included
Market condition satisfied as of year end
If-converted method(5) |
(1) |
Included in the weighted-average Class A Shares outstanding for the period from May 19, 2021 to
December 31, 2021, were 9,191,642 RSUs that have vested but have not been settled in Class A Shares. These RSUs do not participate in dividends until settled in Class A Shares. |
(2) |
As of December 31, 2021, the Oak Street Triggering Events with respect to the Oak Street Earnout Units had
not been met, and therefore such units have not been included in the calculation of diluted earnings (loss) per share. |
(3) |
As of December 31, 2021, the Class E Triggering Events with respect to the Earnout Securities had
been met and no Earnout Securities remained outstanding. |
(4) |
The treasury stock method for warrants carried at fair value includes adjusting the numerator for changes in
fair value impacting net income (loss) for the period. |
(5) |
The if-converted method includes adding back to the numerator any
related income or loss allocations to noncontrolling interest, as well as any incremental tax expense had the instruments converted into Class A Shares as of the beginning of the period. In the case of Earnout Securities carried at fair value,
the numerator is also adjusted for changes in fair value impacting net income (loss) for the period. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Period from May 19, 2021 to December 31, 2021 |
|
Net Loss Attributable to Class A Shareholders |
|
|
Weighted- Average Class A Shares Outstanding |
|
|
Loss Per Class A Share |
|
|
Weighted- Average Number of Antidilutive Instruments |
|
|
|
(dollars in thousands, except per share amounts) |
|
Basic |
|
$ |
(450,430 |
) |
|
|
354,949,067 |
|
|
$ |
(1.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,702,275 |
|
Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,159,364 |
|
Vested Common and Incentive Units |
|
|
(1,306,873 |
) |
|
|
960,237,349 |
|
|
|
|
|
|
|
|
|
Unvested Incentive Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,743,015 |
|
Oak Street Earnout Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
344,594 |
|
Earnout Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,881,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
(1,757,303 |
) |
|
|
1,315,186,416 |
|
|
$ |
(1.34 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-46
Blue Owl Capital Inc.
(Prior to May 19, 2021, Owl Rock)
Notes to Consolidated and Combined Financial Statements
For periods prior to the Business Combination, earnings per share results in
values that would not be meaningful to the users of the consolidated and combined financial statements, as the Companys capital structure completely changed as a result of the Business Combination. Therefore, earnings (loss) per share
information has not been presented for periods prior to the Business Combination.
Dividend
On February 17, 2022, the Company announced a cash dividend of $0.10 per Class A Share. The dividend is payable on
March 7, 2022, to holders of record as of the close of business on February 28, 2022.
2032 Notes
On February 15, 2022, the Company, through its indirect subsidiary, Blue Owl Finance LLC, issued $400.0 million
aggregate principal amount of 4.375% Senior Notes due 2032 (the 2032 Notes). The 2032 Notes bear interest at a rate of 4.375% per annum and mature on February 15, 2032. Interest on the 2032 Notes will be payable semi-annually in
arrears on February 15 and August 15 of each year, commencing August 15, 2022.
The 2032 Notes are fully and
unconditionally guaranteed, jointly and severally, by the Blue Owl Operating Partnerships and certain of their subsidiaries. The guarantees are unsecured and unsubordinated obligations of the guarantors. All or a portion of the 2032 Notes may be
redeemed at the Companys option in whole, at any time, or in part, from time to time, prior to their stated maturity, subject to a make-whole redemption price; provided, however, that if the Company redeems any amounts on or after
November 15, 2031, the redemption price for the 2032 Notes will be equal to 100% of the principal amount of the amounts redeemed, in each case, plus any accrued and unpaid interest. If a change of control repurchase event occurs, the 2032 Notes
are subject to repurchase by the Company at a repurchase price in cash equal to 101% of the aggregate principal amount repurchased plus any accrued and unpaid interest. The 2032 Notes also provide for customary events of default and acceleration.
Wellfleet Acquisition
On February 16, 2022, the Company announced its entry into an agreement to acquire Wellfleet Credit Partners LLC
(Wellfleet) from affiliates of Littlejohn & Co., LLC. The closing is subject to customary conditions. The purchase price consists of $108.0 million cash consideration on closing and earnout payments of up to an additional
$15.0 million of cash and 940,668 Class A Shares payable in equal installments on each of the first three anniversaries from the closing date.
F-47
1,320,591,340 Class A Shares
PROSPECTUS
May 2, 2022
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you
with different information. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date of this prospectus. We are not making an offer of these securities in any
state where the offer is not permitted.
Altimar Acquisition (NYSE:ATAC)
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