Green Dot 2011 Annual Report Download - page 85

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Note 13—Stockholders' Equity (continued)
75
We allocated the proceeds from the issuance of the Series D and the freestanding warrant to these instruments
on a relative fair value basis. The initial allocated value of the warrant calculated using an option-pricing model was
$1.3 million. As the warrant allowed settlement only in the underlying common stock, it was recorded at its initial
allocated value as a component of additional paid-in capital.
Due to the nature of the redemption feature and other provisions, we classified Series D as temporary equity at
its initial allocated value of $18.7 million. We determined that Series D did not contain any beneficial conversion
features. We accreted the carrying value of the stock to its redemption value at each reporting period with a charge
to retained earnings.
On December 19, 2008, we entered into an agreement with the sole holder of Series D for an early redemption
of the 2,926,458 outstanding shares. The agreed redemption value was $39.2 million, or $13.38 per share, which we
paid in cash on December 19, 2008. Upon redemption, the Series D preferred shares were canceled.
In addition, on December 19, 2008, we purchased a call option, which entitled us to purchase the freestanding
warrant on 500,000 shares of common stock at an exercise price of approximately $2.0 million. The call option was
exercisable any time during the period March 1, 2009 to September 1, 2009. In June 2009, we exercised the call option
and repurchased the warrant.
Comprehensive Income
The components of comprehensive income, net of tax, are as follows:
Twelve Months Ended
December 31, Five Months Ended
December 31, 2009
Year Ended
July 31, 20092011 2010
(In thousands)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 52,083 $ 42,232 $ 13,663 $ 37,163
Other comprehensive income:
Net change in unrealized gains on investment
securities available-for-sale, net. . . . . . . . . . . . . . 30 ———
Total comprehensive income . . . . . . . . . . . . . . . . . . $ 52,113 $ 42,232 $ 13,663 $ 37,163
The tax impact for the year ended December 31, 2011 for the unrealized gain on investment securities available-
for-sale was approximately $18,000.
Note 14— Stock-Based Compensation
Employee Stock-Based Compensation
In January 2001, we adopted the 2001 Stock Plan. The 2001 Stock Plan provided for the granting of incentive
stock options, nonqualified stock options and other stock awards. Options granted under the 2001 Stock Plan generally
vest over four years and expire five or ten years from the date of grant.
In June 2010, our board of directors adopted, and in July 2010 our stockholders approved, the 2010 Equity Incentive
Plan, which replaced our 2001 Stock Plan, and the 2010 Employee Stock Purchase Plan. We reserved 2,000,000
shares of our Class A common stock for issuance under our 2010 Equity Incentive Plan. The number of shares reserved
for issuance under our 2010 Equity Incentive Plan will increase automatically on the first day of January of each of
2011 through 2014 by up to a number of shares equal to 3% of the total outstanding shares our Class A and Class B
common stock as of the immediately preceding December 31st. The 2010 Equity Incentive Plan authorizes the award
of stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance shares and
stock bonuses. Options granted under the 2010 Equity Incentive Plan generally vest over four years and expire five
or ten years from the date of grant.
The 2010 Employee Stock Purchase Plan enables eligible employees to purchase shares of our Class A common
stock periodically at a discount. Our 2010 Employee Stock Purchase Plan is intended to qualify as an employee stock
purchase plan under Section 423 of the Internal Revenue Code. We reserved 200,000 shares of our Class A common
stock for issuance under our 2010 Employee Stock Purchase Plan. The number of shares reserved for issuance under
our 2010 Employee Stock Purchase Plan automatically increase on the first day of January of each of 2011 through
2018 by up to the number of shares equal to 1% of the total outstanding shares of our Class A and Class B common
stock as of the immediately preceding December 31st.