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GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
76
Note 10—Employee Stock-Based Compensation (continued)
We estimated the fair value of each stock option grant on the date of grant using the following weighted-average
assumptions:
Year Ended December 31,
2012 2011 2010
Risk-free interest rate 0.97%2.06%2.18%
Expected term (life) of options (in years) 6.07 6.06 5.92
Expected dividends —— —
Expected volatility 47.51%48.32%49.41%
Determining the fair value of stock-based awards at their respective grant dates requires considerable judgment,
including estimating expected volatility and expected term (life). We based our expected volatility on the historical
volatility of comparable public companies over the option’s expected term. We calculated our expected term based
on the simplified method, which is the mid-point between the weighted-average graded-vesting term and the contractual
term. The simplified method was chosen as a means to determine expected term as we have limited historical option
exercise experience as a public company. We derived the risk-free rate from the average yield for the five-and seven-
year zero-coupon U.S. Treasury Strips. We estimate forfeitures at the grant date based on our historical forfeiture rate
and revise the estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Stock option activity for the year ended December 31, 2012 was as follows:
Options Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Life
(in Years) Aggregate
Intrinsic Value
(In thousands, except per share data and years)
Outstanding at December 31, 2011 4,756 $15.79
Options granted 2,247 19.35
Options exercised (412)4.93
Options canceled (874)30.51
Outstanding at December 31, 2012 5,717 $15.72 6.26 $ 15,873
Vested or expected to vest at December 31, 2012 5,570 $15.62 6.17 $ 15,841
Exercisable at December 31, 2012 3,328 $12.03 4.18 $ 15,583
The total intrinsic value of options exercised was $8.5 million, $4.4 million and $76.8 million for the years ended
December 31, 2012, 2011 and 2010, respectively.
Restricted stock unit activity for the year ended December 31, 2012 was as follows:
Shares
Weighted-Average
Grant-Date Fair
Value
(In thousands)
Outstanding at December 31, 2011 110 $33.46
Restricted stock units granted 613 $14.14
Restricted stock units canceled (27) $ 33.58
Restricted stock units vested (80) $ 26.60
Outstanding at December 31, 2012 616 $15.10
The total fair value of shares vested for the year ended December 31, 2012 was $0.4 million based on the price
of our Class A common stock on the vesting date. No restricted stock units vested prior to 2012.
At December 31, 2012, there was $19.0 million and $7.4 million of aggregate unrecognized compensation cost
related to unvested stock options and restricted stock units, respectively, expected to be recognized in compensation
expense in future periods, with a weighted-average period of 2.9 years and 3.0 years, respectively. Approximately
1.3 million shares are available for grant under the 2010 Equity Incentive Plan as of December 31, 2012.