Green Dot 2013 Annual Report Download - page 79

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
72
Note 9—Stockholders’ Equity (continued)
Common Stock
In August 2013, the issued and outstanding shares of our Class B Common Stock declined to less than 10% of
the aggregate number of issued and outstanding shares of our Class A Common Stock and Class B Common Stock.
Pursuant to the terms of Article V of our Certificate of Incorporation, the issued and outstanding shares of our Class
B common stock automatically converted into shares of our Class A common stock. Following this automatic conversion,
there is now only a single class of our common stock outstanding.
Our Certificate of Incorporation specifies the following rights, preferences, and privileges for our common
stockholders.
Voting
Holders of our Class A common stock are entitled to one vote per share.
We have not provided for cumulative voting for the election of directors in our restated Certificate of Incorporation.
In addition, our Certificate of Incorporation provides that a holder, or group of affiliated holders, of more than 24.9% of
our common stock may not vote shares representing more than 14.9% of the voting power represented by the
outstanding shares of our Class A common stock.
Dividends
Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of
outstanding shares of our Class A common stock are entitled to receive dividends out of funds legally available at the
times and in the amounts that our board of directors may determine. In the event a dividend is paid in the form of shares
of common stock or rights to acquire shares of common stock, the holders of Class A common stock will receive Class
A common stock, or rights to acquire Class A common stock, as the case may be.
Liquidation
Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders
would be distributable ratably among the holders of our Class A common stock and any participating preferred stock
outstanding at that time after payment of liquidation preferences, if any, on any outstanding shares of our preferred
stock and payment of other claims of creditors.
Preemptive or Similar Rights
Our Class A common stock is not entitled to preemptive rights or subject to redemption.
Non-Employee Stock-Based Payments
Shares Subject to Repurchase
In May 2010, we amended our commercial agreement with Walmart, our largest retail distributor, and GE Money
Bank. The amendment modifies the terms of our agreement related to our co-branded GPR MoneyCard, which
significantly increased the sales commission rates we pay to Walmart for our products sold in their stores. The new
agreement commenced on May 1, 2010 with a five-year term. As an incentive to amend our prepaid card program
agreement, we issued Walmart 2,208,552 shares of our Class A common stock. These shares are subject to our right
to repurchase them at $0.01 per share upon termination of our agreement with Walmart other than a termination arising
out of our knowing, intentional and material breach of the agreement. Our right to repurchase the shares lapses with
respect to 36,810 shares per month over the sixty months term of the agreement. The repurchase right will expire as
to all shares of Class A common stock that remain subject to the repurchase right if we experience a “prohibited change
of control,” as defined in the agreement, if we experience a “change of control,” as defined in the stock issuance
agreement, or under certain other limited circumstances, which we currently believe are remote. As of December 31,
2013, 588,912 shares of Class A common stock issued to Walmart were subject to our repurchase right.
Warrant
On March 3, 2009, we entered into a sales and marketing agreement with a third party that contained a contingent
warrant feature. The warrant provides the third party with an option to purchase 3,426,765 shares of our common stock
at a per share price of $23.70 if certain sales volume or revenue targets are achieved. A further 856,691 shares become
eligible for purchase under the warrant should either of these targets be achieved and additional specified marketing
and promotional activities take place.