Green Dot 2012 Annual Report Download - page 35

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• changes in accounting standards, policies, guidelines, interpretations or principles;
• general economic conditions; and
• sales of shares of our Class A common stock by us or our stockholders.
In the past, many companies that have experienced volatility in the market price of their stock have become subject
to securities class action litigation. For example, following a recent period of volatility in the trading price of our Class
A common stock, an alleged class action was filed on July 27, 2012 against us and two of our officers. 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, our Class A common stock has one vote per share and our
Series A convertible junior participating non-cumulative perpetual preferred stock has no voting power. Based upon
beneficial ownership as of December 31, 2012, 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 57% of our outstanding voting stock, representing approximately 65% 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 charter documents, Delaware law and our status as bank holding company could discourage, delay
or prevent a takeover that stockholders consider favorable and could also reduce the market price of our
stock.
Our certificate of incorporation and bylaws contain provisions that could delay or prevent a change in control of
our company. These provisions could also make it more difficult for stockholders to nominate directors for election to
our board of directors and take other corporate actions. These provisions, among other things:
• provide our Class B common stock with disproportionate voting rights;
• provide for non-cumulative voting in the election of directors;
• provide for a classified board of directors;
• authorize our board of directors, without stockholder approval, to issue preferred stock with terms determined
by our board of directors and to issue additional shares of our Class A and Class B common stock;
• limit the voting power of a holder, or group of affiliated holders, of more than 24.9% of our common stock to
14.9%;
• provide that only our board of directors may set the number of directors constituting our board of directors or
fill vacant directorships;
• prohibit stockholder action by written consent and limit who may call a special meeting of stockholders; and
• require advance notification of stockholder nominations for election to our board of directors and of stockholder
proposals.
These and other provisions in our certificate of incorporation and bylaws, as well as provisions under Delaware
law, could discourage potential takeover attempts, reduce the price that investors might be willing to pay in the future
for shares of our Class A common stock and result in the trading price of our Class A common stock being lower than
it otherwise would be.
In addition to the foregoing, under the BHC Act and the Change in Bank Control Act, and their respective
implementing regulations, Federal Reserve Board approval is necessary prior to any person or company acquiring