Pandora 2012 Annual Report Download - page 102

Table of Contents
Pandora Media, Inc.
Notes to Consolidated Financial Statements - Continued
The following is a summary of the rights and preferences of the classes of redeemable convertible preferred stock as of the closing date of the
Company's IPO:
Dividends. The holders of shares of the Company's redeemable convertible preferred stock were entitled to receive dividends at the rate of $0.03, $0.04,
$0.092, $0.136, $0.06196 and $ 0.219 per year on each outstanding share of Series B redeemable convertible preferred stock ("Series B"), Series C
redeemable convertible preferred stock ("Series C"), Series D redeemable convertible preferred stock ("Series D"), Series E redeemable convertible preferred
stock ("Series E"), Series F and Series G, respectively (as adjusted for any stock dividends, combinations or splits with respect to such shares). Such dividends
were cumulative, meaning they accrue, until paid, from the date of issuance of each round of shares, whether or not declared. If redeemable convertible
preferred stock were converted to common stock, all accrued but unpaid dividends on the shares converted would be paid in full. At the Company's election,
such dividends would be paid either in cash or by issuance of shares of common stock based upon the fair market value of the common stock as of the
conversion date. If a dividend were paid on any share of common stock, all preferred stockholders would be entitled to a proportionate share of any such
dividend as if they were holders of common stock (on an as-if converted to common stock basis).
Liquidation Preference. In the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, the holders of the
Company's outstanding redeemable convertible preferred stock would have been entitled to receive out of the proceeds of such liquidation the greater of their
stated liquidation preference and the amount such holders would have received had they converted their preferred stock into common stock immediately prior
to such dissolution. For each series of redeemable convertible preferred stock, the stated liquidation preference per share was equal to the original issue price
plus accrued but unpaid dividends. The per share and aggregate liquidation preferences of each series of redeemable convertible preferred stock as of the date
of the Company's IPO is summarized above. Among the holders of redeemable convertible preferred stock such proceeds were distributed in the following
order: (i) first, to holders of Series G and Series F, on a pari passu basis; (ii) second, to holders of Series E; (iii) third, to holders of Series D; (iv) fourth, to
holders of Series C; (v) fifth, to holders of Series B; and (vi) sixth, to holders of Series A redeemable convertible preferred stock ("Series A"). If the assets
available for distribution had been insufficient to make the full distributions to the holders of redeemable convertible preferred stock, the remaining assets
would have been distributed among the holders of the respective series for which distribution of the full preference was not made in proportion to the full
preference to which such holders would otherwise be entitled.
After payment of the foregoing liquidation preferences in full, any remaining assets were distributed among the holders of common stock pro rata,
based on the number of shares of common stock held by each.
A liquidation or winding up of the Company, a greater than 50% change in control or a sale of substantially all of the Company's assets would have
constituted a redemption event.
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