Green Dot 2012 Annual Report Download - page 83

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
73
Note 9—Stockholders’ Equity (continued)
We have not provided for cumulative voting for the election of directors in our restated Certificate of Incorporation.
In addition, our Certificate of Incorporation provides that a holder, or group of affiliated holders, of more than 24.9%
of our common stock may not vote shares representing more than 14.9% of the voting power represented by the
outstanding shares of our Class A and Class B common stock.
Dividends
Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of
outstanding shares of our Class A and Class B common stock are entitled to receive dividends out of funds legally
available at the times and in the amounts that our board of directors may determine. In the event a dividend is paid in
the form of shares of common stock or rights to acquire shares of common stock, the holders of Class A common stock
will receive Class A common stock, or rights to acquire Class A common stock, as the case may be, and the holders
of Class B common stock will receive Class B common stock, or rights to acquire Class B common stock, as the case
may be. However, in general and subject to certain limited exceptions, without approval of each class of our common
stock, we may not pay any dividends or make other distributions with respect to any class of common stock unless at
the same time we make a ratable dividend or distribution with respect to each outstanding share of common stock,
regardless of class.
Liquidation
Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders
would be distributable ratably among the holders of our Class A and Class B common stock and any participating
preferred stock outstanding at that time after payment of liquidation preferences, if any, on any outstanding shares of
our preferred stock and payment of other claims of creditors.
Preemptive or Similar Rights
Neither our Class A nor our Class B common stock is entitled to preemptive rights, and neither is subject to
redemption.
Conversion
Our Class A common stock is not convertible into any other shares of our capital stock. Each share of our Class
B common stock is convertible at any time at the option of the holder into one share of our Class A common stock. In
addition, each share of our Class B common stock will convert automatically into one share of our Class A common
stock upon any transfer, whether or not for value, except for estate planning, intercompany and other similar transfers
or upon the date that the total number of shares of our Class B common stock outstanding represents less than 10%
of the total number of shares of our Class A and Class B common stock outstanding. Once transferred and converted
into Class A common stock, the Class B common stock may not be reissued. No class of our common stock may be
subdivided or combined unless the other class of our common stock concurrently is subdivided or combined in the
same proportion and in the same manner.
Non-Employee Stock-Based Payments
Shares Subject to Repurchase
In May 2010, we amended our commercial agreement with Walmart, our largest retail distributor, and GE Money
Bank. The amendment modifies the terms of our agreement related to our co-branded GPR MoneyCard, which
significantly increased the sales commission rates we pay to Walmart for our products sold in their stores. The new
agreement commenced on May 1, 2010 with a five-year term. As an incentive to amend our prepaid card program
agreement, we issued Walmart 2,208,552 shares of our Class A common stock. These shares are subject to our right
to repurchase them at $0.01 per share upon termination of our agreement with Walmart other than a termination arising
out of our knowing, intentional and material breach of the agreement. Our right to repurchase the shares lapses with
respect to 36,810 shares per month over the sixty months term of the agreement. The repurchase right will expire as
to all shares of Class A common stock that remain subject to the repurchase right if we experience a “prohibited change
of control,” as defined in the agreement, if we experience a “change of control,” as defined in the stock issuance
agreement, or under certain other limited circumstances, which we currently believe are remote. As of December 31,
2012, 1,030,632 shares of Class A common stock issued to Walmart were subject to our repurchase right.