Green Dot 2010 Annual Report Download - page 39

In the past, many companies that have experienced volatility in the market price of their stock have
become subject to securities class action litigation. We may be the target of this type of litigation in the
future. Securities litigation against us could result in substantial costs and divert our management’s
attention from other business concerns, which could seriously harm our business.
Concentration of ownership among our existing directors, executive officers and principal
stockholders may prevent new investors from influencing significant corporate decisions.
Our Class B common stock has ten votes per share and our Class A common stock has one vote per
share. Based upon beneficial ownership as of December 31, 2010, our current directors, executive
officers, holders of more than 5% of our total shares of common stock outstanding and their respective
affiliates will, in the aggregate, beneficially own approximately 52.7% of our outstanding Class A and
Class B common stock, representing approximately 69.2% of the voting power of our outstanding capital
stock. As a result, these stockholders are able to exercise a controlling influence over matters requiring
stockholder approval, including the election of directors and approval of significant corporate transactions,
and have significant influence over our management and policies for the foreseeable future. Some of these
persons or entities may have interests that are different from yours. For example, these stockholders may
support proposals and actions with which you may disagree or which are not in your interests. The
concentration of ownership could delay or prevent a change in control of our company or otherwise
discourage a potential acquirer from attempting to obtain control of our company, which in turn could
reduce the price of our Class A common stock. In addition, these stockholders, some of which have
representatives sitting on our board of directors, could use their voting control to maintain our existing
management and directors in office, delay or prevent changes of control of our company, or support or
reject other management and board of director proposals that are subject to stockholder approval, such as
amendments to our employee stock plans and approvals of significant financing transactions.
Our stock price could decline due to the large number of outstanding shares of our com-
mon stock becoming eligible for sale in the near future.
Sales of substantial amounts of our Class A common stock in the public market, or even the
perception that these sales could occur, could cause the trading price of our Class A common stock to
decline. These sales could also make it more difficult for us to sell equity or equity-related securities in the
future at a time and price that we deem appropriate.
Our Class A common stock began trading on the NYSE on July 22, 2010; however, to date there have
been a limited number of shares trading in the public market. As of December 31, 2010, we had 14,761,743
outstanding shares of Class A common stock and 27,090,638 outstanding shares of Class B common stock.
Approximately 29.6 million of these shares are immediately tradable without restriction, subject in some
cases to the volume and other restrictions of Rule 144 and Rule 701 promulgated under the Securities Act
and, in the case of shares held by Walmart, the lapse of our right of repurchase with respect to any unvested
shares. Approximately 12.3 million shares will be eligible for sale in the public market upon the expiration of
lock-up agreements for our follow-on offering that was completed on December 13, 2010, subject in some
cases to the volume and other restrictions of Rule 144 and Rule 701 promulgated under the Securities Act.
The lock-up agreements for our following-on offering on December 13, 2010 expire on March 7, 2011,
except the lock-up period may be extended for up to 34 additional days under specified circumstances
where we announce or pre-announce earnings or a material event occurs within 17 days prior to, or
16 days after, the termination of the lock-up period. The representatives of the underwriters for that offering
may, in their sole discretion and at any time without notice, release all or any portion of the securities
subject to lock-up agreements.
Pursuant to the terms of our ninth amended and restated registration rights agreement, the holders of
approximately 25.3 million shares of our Class A and Class B common stock and warrants to purchase our
Class B common stock have rights with respect to the registration of these shares under the Securities Act.
If we register the resale of their shares following the expiration of the lock-up agreements, these
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