NetSpend 2011 Annual Report Download - page 28

Table of Contents
our board of directors, our bylaws may only be amended or repealed by the affirmative vote of the holders of at least 75% of our voting shares
of capital stock.
In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which limits business combination
transactions with stockholders of 15% or more of our outstanding voting stock that our board of directors has not approved. These provisions
and other similar provisions make it more difficult for existing stockholders or potential acquirers to acquire us.
These provisions could limit the price that investors are willing to pay in the future for shares of our common stock. These provisions
might also discourage a potential acquisition proposal or tender offer, even if the acquisition proposal or tender offer is at a premium over the
then current market price for our common stock.
If securities analysts do not continue to publish research or reports about our business or if they publish negative evaluations of our stock,
the price of our stock could decline.
We believe that the trading price for our common stock is affected by research or reports that industry or financial analysts publish about
us or our business. If one or more of the analysts who may elect to cover us downgrade their evaluations of our stock, the price of our stock
could decline. If one or more of these analysts cease coverage of our company, we could lose visibility in the market for our stock, which in
turn could cause our stock price to decline.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal executive offices are located in Austin, Texas, where we lease approximately 54,000 square feet (we also lease a separate
21,000 square foot facility in Austin where some of our customer support staff is housed). We also maintain leased offices in Atlanta, Georgia,
San Mateo, California, Kansas City, Kansas and Charlotte, North Carolina. We believe that our existing and planned facilities are adequate to
support our existing operations and that, as needed, we will be able to obtain suitable additional facilities on commercially reasonable terms.
ITEM 3. LEGAL PROCEEDINGS
We are involved from time to time in various litigation and regulatory matters arising in the ordinary course of business. The amount, if
any, of our ultimate liability with respect to these matters cannot be determined, and the resolution of any pending matters may have a material
adverse effect on our business and financial condition.
On October 24, 2007, Alexsam, Inc. filed suit against our subsidiary NetSpend Corporation ("NetSpend") in the District Court of Travis
County, Texas, 419th Judicial District, asserting breach of a license agreement entered into between NetSpend and Alexsam in 2004 and
seeking monetary damages, attorneys' fees, costs and interest. The license agreement was entered into by the parties following Alexsam's
assertion and subsequent dismissal without prejudice of a claim of patent infringement filed by Alexsam against NetSpend in 2003. We have
asserted counterclaims against Alexsam for breach of contract. In April 2010, we filed a motion for summary judgment, and following a
hearing, the court denied the motion without substantive comment. In October 2010, Alexsam filed an amended petition, which added a claim
by Alexsam that NetSpend fraudulently induced Alexsam to give up its prior patent infringement claims against NetSpend and enter into the
license agreement. In November 2010, we removed the case to the United States District Court for the Western District of Texas. In January,
2011, the federal court remanded the case back to the Travis County District Court
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