Green Dot 2014 Annual Report Download - page 87

Download and view the complete annual report

Please find page 87 of the 2014 Green Dot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 106

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106

Note 12—Employee Stock-Based Compensation (continued)
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, 2014 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, 2013 . . . . . . . . . . . . . 5,212 $16.62
Options granted . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 20.92
Options exercised . . . . . . . . . . . . . . . . . . . . . . . . . (1,107)7.20
Options canceled. . . . . . . . . . . . . . . . . . . . . . . . . . (589)20.98
Outstanding at December 31, 2014 . . . . . . . . . . . . . 3,622 $18.91 6.76 $13,493
Vested or expected to vest at December 31, 2014 .3,521 18.90 6.72 $13,202
Exercisable at December 31, 2014 . . . . . . . . . . . . . 2,162 18.79 5.82 $8,752
The total intrinsic value of options exercised was $14.0 million, $17.9 million and $8.5 million for the years ended
December„31, 2014, 2013, and 2012, respectively.
Restricted stock unit activity for the year ended December„31, 2014 was as follows:
Shares
Weighted-Average
Grant-Date Fair
Value
(In thousands)
Outstanding at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,454 $20.87
Restricted stock units granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,035 $19.49
Restricted stock units canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (406) $ 19.74
Restricted stock units vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (331) $ 19.51
Outstanding at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,752 $20.18
The total fair value of shares vested for the years ended December„31, 2014, 2013 and 2012 was $8.2 million,
$4.5 million and $0.4 million, respectively, based on the price of our Class A common stock on the vesting date.
At December„31, 2014, there was $11.8 million and $43.8 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 2.2 years and 3.3 years, respectively. Approximately 3.7
million shares are available for grant under the 2010 Equity Incentive Plan as of December„31, 2014.
Stock-Based Retailer Incentive Compensation
As discussed in Note 11 — Stockholders’ Equity, we issued Walmart 2,208,552 shares of our Class„A common
stock. We recognize the fair value of 36,810 shares each month over the five-year term of the commercial agreement.
An early expiration of our right to repurchase as described above would, however, result in the recognition of the fair
value of all the shares still subject to repurchase on the date of the expiration. We currently assess an early expiration
of our repurchase right to be remote. We record the fair value recognized as stock-based retailer incentive compensation,
a contra-revenue component of our total operating revenues. We recognize monthly the fair value of the shares for
which our right to repurchase has lapsed using the then-current fair market value of our Class„A common stock. We
recognized $8.9 million, $8.7 million and $8.3 million of stock-based retailer incentive compensation for the years ended
December„31, 2014, 2013, and 2012, respectively.
GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
79