LifeLock 2013 Annual Report Download - page 80

The following summarizes the future minimum lease payments for outstanding operating lease agreements as of December 31, 201 3:
2014 $ 3,276
2015 4,922
2016 5,112
2017 4,919
2018 3,591
Thereafter 18,743
$ 40,563

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We have authorized 300,000,000 shares of common stock, with a par value of $0.001 per share. As of December 31, 2013, we had 91,441,771 shares
of common stock outstanding.
Holders of our common stock are entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of
directors. Stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the voting shares are able to elect
all of the directors.
We issue stock-based awards to our employees in the form of stock options, restricted stock units, and restricted stock. We also have an employee
stock purchase plan.
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On October 9, 2012, in connection with the closing of our IPO, our Series B, C, D, and E-1 preferred shares automatically converted on a 1 for 1
basis into 24,208,738 shares of common stock; our Series A preferred shares automatically converted on a 1 for 1.03 basis into 6,617,647 shares of
common stock; and our Series E and E-2 prefe rred shares converted on a 1 for 1.49 basis into 20,494,052 shares of our common stock.
On March 14, 2012, we issued the following convertible redeemable preferred stock:
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 
Series E Convertible Redeemable Preferred Stock March 14, 2012 $ 86,843 11,486,999
Series E-1 Convertible Redeemable Preferred Stock March 14, 2012 11,542 1,586,778(1)
Series E-2 Convertible Redeemable Preferred Stock March 14, 2012 17,275 2,284,960
(1) All shares were issued as purchase consideration for ID Analytics.
In conjunction with the issuance of the Series E, E-1, and E-2 convertible redeemable preferred stock, we amended our Certificate of Incorporation to
delay the redemption date of the Series A, B, C, and D convertible redeemable preferred stock from November 15, 2011 to six months after the credit
agreement maturity date, or six months after all obligations under the credit agreement have been repaid in full and the agreement terminated. The amendment
of the term of the equity instruments was evaluated to de termine whether it should be considered a modification or an extinguishment. We evaluated the fair
value of the instruments immediately after the amendment, and determined that the fair value was not significantly different than the fair value immediately
before the amendment. Additionally, we evaluated the qualitative aspects of the amendment. Based upon these evaluations, we determined the amendment to be
a modification.
Prior to the conversion to common stock at the closing of our IPO, the convertible redeemable preferred stock was recorded outside of equity because the
redemption feature was not solely within our control. Through November 15, 2011, the original date on which the redemption provision became exercisable by
the holders of convertible redeemable preferred stock, the recorded value of the Series A, B, C, and D convertible redeemable preferred stock was accreted to
the full redemption amount using the effective interest method. The Series E, E-1, and E-2 convertible redeemable preferred stock were being accreted to the full
redemption amount using the effective interest method, until conversion to common stock on the closing of our IPO. This increase was recorded as a preferred
stock dividend.
We evaluated each of our series of convertible preferred stock and determined that each should be considered an “equity host” and not a “debt host.”
This evaluation was necessary to determine if any embedded features required bifurcation and, therefore, would be required to be accounted for separately as a
derivative liability. Our analysis followed the “whole instrument approach,” which compares an individual feature against the entire preferred stock
instrument that includes that feature. Our analysis was based on a consideration of the economic characteristics and risks of the preferred stock and, more
specifically, evaluated all of the stated and implied substantive terms and features of such stock, including (1) whether the preferred stock included
redemption features; (2) how
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