Delaware | 6199 | 95-4766827 | ||
(State or other jurisdiction
of
incorporation or organization) |
(Primary standard industrial
classification code number) |
(I.R.S. employer
identification no.) |
Laird H. Simons III, Esq.
|
William V. Fogg, Esq. | |
William L. Hughes, Esq.
|
Daniel A. OShea, Esq. | |
James D. Evans, Esq.
|
Cravath, Swaine & Moore LLP | |
Fenwick & West LLP
|
Worldwide Plaza | |
801 California Street
|
825 Eighth Avenue | |
Mountain View, CA 94041
|
New York, NY 10019 | |
(650) 988-8500
|
(212) 474-1000 |
Large accelerated filer
o
|
Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
The
information in this preliminary prospectus is not complete and
may be changed. Neither we nor the selling stockholders may sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities,
and neither we nor the selling stockholders are soliciting an
offer to buy these securities, in any state where the offer or
sale is not permitted.
|
Per Share | Total | |||||||
Initial public offering price
|
$ | $ | ||||||
Underwriting discounts and commissions
|
$ | $ | ||||||
Proceeds to Green Dot, before expenses
|
$ | $ | ||||||
Proceeds to the selling stockholders, before expenses
|
$ | $ |
J.P. Morgan | Morgan Stanley |
Deutsche Bank Securities
|
Piper Jaffray | UBS Investment Bank |
Page | ||||
Prospectus Summary
|
1 | |||
Risk Factors
|
9 | |||
Special Note Regarding Forward-Looking Statements
|
26 | |||
Industry and Market Data
|
27 | |||
Use of Proceeds
|
28 | |||
Dividend Policy
|
28 | |||
Capitalization
|
29 | |||
Dilution
|
31 | |||
Selected Consolidated Financial Data
|
33 | |||
Managements Discussion and Analysis of Financial Condition
and Results of Operations
|
36 | |||
Business
|
60 | |||
Management
|
81 | |||
Executive Compensation
|
87 | |||
Transactions with Related Parties, Founders and Control Persons
|
105 | |||
Principal and Selling Stockholders
|
107 | |||
Description of Capital Stock
|
111 | |||
Shares Eligible for Future Sale
|
116 | |||
Underwriting
|
119 | |||
Legal Matters
|
123 | |||
Experts
|
123 | |||
Where You Can Find Additional Information
|
123 | |||
Index to Consolidated Financial Statements
|
F-1 |
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Innovative Product and Marketing Expertise.
We
are an innovator in the development, merchandising and marketing
of prepaid financial services. We believe we were the first
company to combine the products, technology platform and
distribution channel required to make retailer-distributed GPR
cards a viable product offering. Our consumer focus has led us
to enhance our product packaging and product displays in retail
locations to educate consumers and promote our products and
services more effectively. We believe that we have the strongest
brand in the prepaid financial services industry, and we
continue to build brand awareness using national television
advertising.
Leading Retail Distribution.
We have
established a nationwide retail distribution network, consisting
of approximately 50,000 retail store locations, which gives us
access to the vast majority of the U.S. population.
According to a Scarborough Research survey, which was conducted
between August 2008 and September 2009, at least 93%
of U.S. adult respondents had shopped at one or more of the
stores of our current retail distributors within the past twelve
months.
Leading Reload Network in the United
States.
We believe our Green Dot Network is the
leading reload network for prepaid cards in the United States.
We also believe that it can be expanded and adapted to many new
and evolving applications in the electronic payments industry.
Proprietary Technology.
Green PlaNET, our
centralized processing platform, includes a variety of
proprietary software applications that, together with
third-party applications, run our front-end, back-end,
anti-fraud, regulatory compliance and customer service
processing systems. It enables us to develop, distribute and
support a variety of products and services effectively. This
platform also enables our cards and Green Dot Network to
interoperate with Visa, MasterCard and other payment or funds
transfer networks, allowing our cardholders to make purchases
and complete other transactions.
Business Model with Powerful Network
Effects.
The combination of our broad group of
products and services, large portfolio of active cards,
nationwide footprint of retail distributors and proprietary
technology creates powerful network effects. Growth in the
number of our product and service offerings or network
participants enhances the value we deliver to all network
participants. For example, we are able to attract retail
distributors because of the large number of consumers who
actively use our reload network. We believe the breadth and
depth
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of our network would be difficult to replicate and represents a
significant competitive advantage, as well as a barrier to entry
for potential competitors.
Vertical Integration.
We believe that we are
more vertically integrated than our competitors, based on our
distribution capabilities, processing platform, program
management skills and proprietary reload network. Whereas we
have built our offerings primarily around our own
internally-developed capabilities, none of our competitors has
been able to offer products and services similar to ours without
collaborating with third parties to provide one or more of the
essential features of prepaid financial service offerings, such
as program management or the reload network. Our vertical
integration has allowed us to reduce costs across our operations
and, we expect, will continue to provide us with opportunities
to reduce operational costs in the future. It also enables us to
scale our business quickly in response to rising demand and to
ensure high-quality service for our customers.
Strong Regulatory and Compliance
Infrastructure.
We employ a proactive approach to
licensing, regulatory and compliance matters, which we believe
provides us with an important competitive advantage. We believe
that this has helped us develop strong relationships with
leading retailers and financial institutions and has prepared us
well for changes in the regulatory environment.
Increasing the Number of Network
Participants.
We intend to enhance the network
effects in our business model in the following ways:
attracting new users by introducing new products, improving
current products and promoting our products;
expanding and strengthening our distribution by establishing
relationships with additional high-quality retail chains and
accelerating our entry into new distribution channels; and
adding businesses that accept reloads or payments through, and
applications for, the Green Dot Network by continuing to enroll
additional third-party prepaid card program providers in our
reload network and to identify additional uses for our reload
networks cash transfer technology.
Increasing Revenue per Customer.
We intend to
pursue greater revenue per customer by improving cardholder
retention, increasing card usage and increasing adoption of
optional revenue-generating services.
Improving Operating Efficiencies.
We intend to
leverage our growing scale and vertical integration to generate
incremental operating efficiencies, which will provide us with
the flexibility to engage in new marketing programs, reduce
pricing and make other investments in our business to maintain
our leadership position.
Broadening Brand and Product Awareness.
We
intend to broaden awareness of the Green Dot brand and our
products and services through national television advertising,
online advertising and ongoing enhancements to our packaging and
merchandising.
Acquiring a Bank and Complementary
Businesses.
We intend to pursue acquisitions that
will help us achieve our strategic objectives, particularly
those designed to improve operating revenue growth and operating
efficiencies. In February 2010, we entered into a definitive
agreement to acquire Utah-based Bonneville Bancorp, a bank
holding company, and its subsidiary commercial bank, Bonneville
Bank, for an aggregate cash purchase price of approximately
$15.7 million, and filed applications with the appropriate
federal and state regulators seeking approvals for this
transaction. We believe this acquisition will increase the
efficiency with which we introduce and manage potential new
products and services, reduce the risk that
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we would be negatively impacted by changes in the business
practices of the banks that issue our cards, reduce the
sponsorship and service fees and other expenses that we pay to
third parties, and allow us to serve our customers better and
more efficiently through a more vertically integrated platform.
our growth rates may decline in the future;
operating revenues derived from sales at Walmart and our other
three largest retail distributors represented 66%, 9%, 8% and
6%, respectively, of our total operating revenues during the
five months ended December 31, 2009, and the loss of
operating revenues from any of these retail distributors would
adversely affect our business;
our future success depends upon our retail distributors
active and effective promotion of our products and services, but
their interests and operational decisions might not always align
with our interests;
the industry in which we compete is highly competitive and has a
number of major participants, which could adversely affect our
operating revenue growth; and
we operate in a highly regulated environment; failure to comply
with applicable laws or regulations, or changes in those laws or
regulations that adversely affect our operating methods, could
negatively impact our business.
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Class A common stock offered by us
shares
Class A common stock offered by the selling stockholders
shares
Class A common stock to be outstanding after this offering
shares
Class B common stock to be outstanding after this offering
shares(1)
Total Class A and Class B common stock to be
outstanding after this offering
shares
Voting rights
We have two classes of authorized common stock
Class A common stock and Class B common stock. The
rights of the holders of our Class A and Class B
common stock are virtually identical, except with respect to
voting and conversion. The holders of our Class B common
stock are entitled to ten votes per share, and the holders of
our Class A common stock are entitled to one vote per
share. The holders of our Class A common stock and
Class B common stock will vote together as a single class
on all matters submitted to a vote of our stockholders, unless
otherwise required by law. Each share of our Class B common
stock is convertible into one share of our Class A common
stock at any time and will convert automatically upon certain
transfers or the date that the total number of shares of
Class B common stock outstanding represents less than 10%
of the total number of shares of Class A and Class B
common stock outstanding. See Description of Capital
Stock.
Use of proceeds
We expect to use the net proceeds of this offering for general
corporate purposes, including working capital and capital
expenditures. We may also use a portion of the net proceeds to
acquire or invest in complementary businesses, products,
services, technologies or assets. We will not receive any
proceeds from the sale of shares by the selling stockholders.
See Use of Proceeds.
Dividends
We have never declared or paid any cash dividends on our capital
stock, and we do not currently intend to pay any cash dividends
on our Class A common stock for the foreseeable future.
Proposed NYSE symbol
GDOT
(1)
The shares of our Class B common stock outstanding after
this offering will represent
approximately % of the total number
of shares of our Class A and Class B common stock
outstanding after this offering
and % of the combined voting power
of our Class A and Class B common stock outstanding
after this offering.
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the automatic conversion of all outstanding shares of our
preferred stock into 24,941,521 shares of our Class B
common stock and the conversion by the selling stockholders
of shares
of our Class B common stock into a like number of shares of
our Class A common stock, in each case immediately prior to
the completion of this offering;
the filing of our restated certificate of incorporation and the
effectiveness of our restated bylaws, which will occur
immediately following the completion of the offering; and
no exercise by the underwriters of their option to purchase up
to an
additional shares
of our Class A common stock from us and the selling
stockholders in this offering.
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Year Ended July 31,
Five Months Ended
2005
2006
2007
2008
2009
December 31, 2009
(Unaudited)
(In thousands, except per share amounts)
$21,771
$36,359
$45,717
$91,233
$119,356
$50,895
12,064
20,616
25,419
45,310
62,396
30,509
5,705
9,975
12,488
31,583
53,064
31,353
39,540
66,951
83,624
168,126
234,816
112,757
19,148
28,660
38,838
69,577
75,786
31,333
11,584
18,499
20,610
28,303
40,096
26,610
6,990
8,547
9,809
21,944
32,320
17,480
6,521
10,077
13,212
19,124
22,944
14,020
44,243
65,783
82,469
138,948
171,146
89,443
(4,703
)
1,168
1,155
29,178
63,670
23,314
300
301
771
665
396
115
(474
)
(823
)
(625
)
(247
)
(1
)
(2
)
(4,877
)
645
1,301
29,596
64,065
23,427
111
(3,346
)
12,261
26,902
9,764
(4,877
)
535
4,647
17,335
37,163
13,663
(367
)
(5,157
)
(13,650
)
(29,000
)
(9,170
)
$(4,877
)
$168
$(510
)
$3,685
$8,163
$4,493
$(0.48
)
$0.02
$(0.05
)
$0.34
$0.68
$0.37
$(0.48
)
$0.01
$(0.05
)
$0.26
$0.52
$0.29
10,228
10,873
11,100
10,757
12,036
12,222
10,228
13,194
11,100
14,154
15,712
15,425
$1.01
$0.37
$0.91
$0.34
36,978
37,164
40,654
40,367
(1)
Includes stock-based compensation
expense of $0, $0, $156,000, $1.2 million and
$2.5 million for the years ended July 31, 2005, 2006,
2007, 2008 and 2009, respectively, and $6.8 million for the
five months ended December 31, 2009.
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Five Months
Ended
Year Ended July 31,
December 31,
2005
2006
2007
2008
2009
2009
(Dollars in thousands)
428,737
721,561
894,295
2,167,004
3,106,923
2,105,908
2,262,854
4,055,775
4,992,956
9,153,119
14,084,458
8,188,264
289,086
428,300
625,165
1,270,072
2,056,828
2,688,975
$414,910
$801,956
$1,134,175
$2,831,278
$4,702,914
$2,734,087
(1)
Represents the total number of GPR
cards in our portfolio that have had a purchase, reload or ATM
withdrawal transaction during the previous
90-day
period.
(2)
Represents the total dollar volume
of funds loaded to our GPR card and reload products in the
specified period.
an actual basis; and
an as adjusted basis to give effect to the sale of
the shares
of our Class A common stock offered by us in this
prospectus at an assumed initial public offering price of
$ per share, after deducting the
estimated underwriting discounts and commissions and estimated
offering expenses.
As of
December 31, 2009
Actual
As Adjusted(1)
(In thousands)
$
71,684
$
42,569
42,569
183,108
42,569
42,569
111,744
111,744
71,364
(1)
Each $1.00 increase or decrease in
the assumed initial public offering price of
$ per share would increase or
decrease, respectively, our cash, cash equivalents and
restricted cash, total assets and total stockholders
equity by approximately
$ million, assuming the
number of shares offered by us, as set forth on the cover page
of this prospectus, remains the same and after deducting the
estimated underwriting discounts and commissions.
(2)
Includes $15.4 million of
restricted cash. We maintain restricted deposits in bank
accounts to support our line of credit.
(3)
Our retail distributors collect
customer funds for purchases of new cards and reloads and then
remit these funds directly to bank accounts established on
behalf of those customers by the banks that issue our cards. Our
retail distributors remittance of these funds takes an
average of three business days. Settlement assets represent the
amounts due from our retail distributors for customer funds
collected at the point of sale that have not yet been remitted
to the card issuing banks. Settlement obligations represent the
amounts that are due from us to the card issuing banks for funds
collected but not yet remitted by our retail distributors and
not funded by our line of credit. We have no control over or
access to customer funds remitted by our retail distributors to
the card issuing banks. Customer funds therefore are not our
assets, and we do not recognize them in our consolidated
financial statements.
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prepaid card program managers, such as First Data Corporation
(or First Data), Netspend Corporation (or Netspend), AccountNow,
Inc. (or AccountNow), PreCash Inc. (or PreCash) and UniRush, LLC
(or Rush Card);
reload network providers, such as Visa, Inc. (or Visa),
MasterCard International Incorporated (or MasterCard), The
Western Union Company (or Western Union) and MoneyGram
International, Inc. (or MoneyGram); and
prepaid card distributors, such as InComm and Blackhawk Network,
Inc. (or Blackhawk).
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increased regulatory and compliance requirements, including, if
we complete our pending bank acquisition, capital requirements
applicable to us and our acquired subsidiary bank;
implementation or remediation of controls, procedures and
policies at the acquired company;
diversion of management time and focus from operation of our
then-existing business to acquisition integration challenges;
coordination of product, sales, marketing and program and
systems management functions;
transition of the acquired companys users and customers
onto our systems;
retention of employees from the acquired company;
integrating employees from the acquired company into our
organization;
integration of the acquired companys accounting,
information management, human resource and other administrative
systems and operations generally with ours;
liability for activities of the acquired company prior to the
acquisition, including violations of law, commercial disputes,
and tax and other known and unknown liabilities; and
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litigation or other claims in connection with the acquired
company, including claims brought by terminated employees,
customers, former stockholders or other third parties.
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prepare and distribute periodic reports and other stockholder
communications in compliance with our obligations under the
federal securities laws and the NYSE rules;
define and expand the roles and the duties of our board of
directors and its committees;
institute more comprehensive compliance, investor relations and
internal audit functions;
evaluate and maintain our system of internal control over
financial reporting, and report on managements assessment
thereof, in compliance with the requirements of Section 404 of
the
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Sarbanes-Oxley Act and related rules and regulations of the SEC
and the Public Company Accounting Oversight Board; and
involve and retain outside legal counsel and accountants in
connection with the activities listed above.
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issuing additional shares of our Class A common stock or
other equity securities;
issuing debt securities; or
borrowing funds under a credit facility.
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price and volume fluctuations in the overall stock market from
time to time;
significant volatility in the market prices and trading volumes
of financial services company stocks;
actual or anticipated changes in our results of operations or
fluctuations in our operating results;
actual or anticipated changes in the expectations of investors
or the recommendations of any securities analysts who follow our
Class A common stock;
actual or anticipated developments in our business or our
competitors businesses or the competitive landscape
generally;
the publics reaction to our press releases, other public
announcements and filings with the SEC;
litigation involving us, our industry or both or investigations
by regulators into our operations or those of our competitors;
new laws or regulations or new interpretations of existing laws
or regulations applicable to our business;
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.
the timing and volume of purchases, use and reloads of our
prepaid cards and related products and services;
the timing and success of new product or service introductions
by us or our competitors;
seasonality in the purchase or use of our products and services;
fluctuations in customer retention rates;
changes in the mix of products and services that we sell;
changes in the mix of retail distributors through which we sell
our products and services;
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the timing of commencement, renegotiation or termination of
relationships with significant retail distributors;
the timing of commencement, renegotiation or termination of
relationships with significant network acceptance members;
changes in our or our competitors pricing policies or
sales terms;
the timing of commencement and termination of major advertising
campaigns;
the timing of costs related to the development or acquisition of
complementary businesses;
the timing of costs of any major litigation to which we are a
party;
the amount and timing of operating costs related to the
maintenance and expansion of our business, operations and
infrastructure;
our ability to control costs, including third-party service
provider costs;
volatility in the trading price of our Class A common
stock, which may lead to higher stock-based compensation
expenses; and
changes in the regulatory environment affecting the banking or
electronic payments industries generally or prepaid financial
services specifically.
shares
will be eligible for sale immediately upon completion of this
offering;
shares
will be eligible for sale beginning 90 days after the date
of this prospectus; and
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shares
will be eligible for sale upon the expiration of
lock-up
and/or
market standoff agreements, subject in some cases to the volume
and other restrictions of Rule 144 and Rule 701 promulgated
under the Securities Act of 1933, as amended, or the Securities
Act.
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provide our Class B common stock with disproportionate
voting rights (see Concentration of ownership
among our existing directors, executive officers and principal
stockholders may prevent new investors from influencing
significant corporate decisions above);
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.
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our expectations regarding our operating revenues, expenses,
effective tax rates and other results of operations;
our anticipated capital expenditures and our estimates regarding
our capital requirements;
our liquidity and working capital requirements;
our need to obtain additional funding and our ability to obtain
future funding on acceptable terms;
our spending of the net proceeds from this offering;
the impact of seasonality on our business;
the growth rates of the markets in which we compete;
our anticipated strategies for growth and sources of new
operating revenues;
maintaining and expanding our customer base and our
relationships with retail distributors and network acceptance
members;
our ability to anticipate market needs and develop new and
enhanced products and services to meet those needs;
our current and future products, services, applications and
functionality and plans to promote them;
anticipated trends and challenges in our business and in the
markets in which we operate;
the evolution of technology affecting our products, services and
markets;
our ability to retain and hire necessary employees and to staff
our operations appropriately;
management compensation and the methodology for its
determination;
our ability to find future acquisition opportunities on
favorable terms or at all and to manage any acquisitions;
our ability to complete our pending bank acquisition and our
expectations regarding the benefits of doing so;
our efforts to make our business more vertically integrated;
our ability to compete in our industry and innovation by our
competitors;
our ability to stay abreast of new or modified laws and
regulations that currently apply or become applicable to our
business;
estimates and estimate methodologies used in preparing our
consolidated financial statements and determining option
exercise prices; and
the future trading prices of our Class A common stock and
the impact of any securities analysts reports on these
prices.
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28
an actual basis;
a pro forma basis to give effect to (i) the March 2010
conversion of all shares of our common stock outstanding as of
December 31, 2009 into 12,860,335 shares of our
Class B common stock and (ii) the automatic conversion
of all outstanding shares of our preferred stock into
24,941,521 shares of our Class B common stock
immediately prior to the completion of this offering; and
a pro forma as adjusted basis to give further effect to
(i) the conversion by the selling stockholders
of shares
of our Class B common stock into a like number of shares of
our Class A common stock immediately prior to the
completion of this offering and (ii) the sale by us of
the shares
of our Class A common stock offered by us in this
prospectus at an assumed initial public offering price of
$ per share, after deducting the
estimated underwriting discounts and commissions and estimated
offering expenses, and the sale by the selling stockholders of
the shares
of our Class A common stock offered by them in this
prospectus.
December 31, 2009
Pro Forma
Actual
Pro Forma
As Adjusted(1)
(In thousands)
$
71,684
$
71,684
$
71,684
$
$
$
31,322
13
38
12,603
43,900
27,426
27,426
27,426
71,364
71,364
$
71,364
$
71,364
$
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(1)
Each $1.00 increase or decrease in the assumed initial public
offering price of $ per share
would increase or decrease, respectively, our cash, cash
equivalents and restricted cash, additional paid-in capital,
total stockholders equity and total capitalization by
approximately $ million,
assuming the number of shares offered by us, as set forth on the
cover page of this prospectus, remains the same and after
deducting the estimated underwriting discounts and commissions.
If the underwriters option to purchase additional shares
of our Class A common stock in this offering is exercised
in full, the amount of pro forma as adjusted cash, cash
equivalents and restricted cash, additional paid-in capital,
total stockholders equity and total capitalization would
increase by approximately $ and we
would have shares of Class A
common stock issued and outstanding
and shares
of Class B common stock issued and outstanding.
(2)
Includes $15.4 million of restricted cash. We maintain
restricted deposits in bank accounts to support our line of
credit.
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$
$
$
Average
Shares Purchased
Total Consideration
Price
Number
Percent
Amount
Percent
per Share
%
$
%
$
100.0
%
100.0
%
(1)
Includes shares sold in this offering by the selling
stockholders, including shares acquired through option exercises
in order to sell them in this offering.
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there would be an additional $ per
share of dilution to new investors;
our existing stockholders, including the holders of these
options and warrants, would own %
and our new investors would own %
of the total number of shares of our Class A and
Class B common stock outstanding upon the completion of
this offering; and
our existing stockholders, including the holders of these
options and warrants, would have
paid % of total consideration, at
an average price per share of $ ,
and our new investors would have
paid % of total consideration.
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34
Five Months Ended
Year Ended July 31,
December 31,
2005
2006
2007
2008
2009
2009
(Unaudited)
(In thousands, except per share amounts)
$
21,771
$
36,359
$
45,717
$
91,233
$
119,356
$
50,895
12,064
20,616
25,419
45,310
62,396
30,509
5,705
9,975
12,488
31,583
53,064
31,353
39,540
66,951
83,624
168,126
234,816
112,757
19,148
28,660
38,838
69,577
75,786
31,333
11,584
18,499
20,610
28,303
40,096
26,610
6,990
8,547
9,809
21,944
32,320
17,480
6,521
10,077
13,212
19,124
22,944
14,020
44,243
65,783
82,469
138,948
171,146
89,443
(4,703
)
1,168
1,155
29,178
63,670
23,314
300
301
771
665
396
115
(474
)
(823
)
(625
)
(247
)
(1
)
(2
)
(4,877
)
645
1,301
29,596
64,065
23,427
111
(3,346
)
12,261
26,902
9,764
(4,877
)
535
4,647
17,335
37,163
13,663
(367
)
(5,157
)
(13,650
)
(29,000
)
(9,170
)
$
(4,877
)
$
168
$
(510
)
$
3,685
$
8,163
$
4,493
$(0.48
)
$0.02
$(0.05
)
$0.34
$0.68
$0.37
$(0.48
)
$0.01
$(0.05
)
$0.26
$0.52
$0.29
10,228
10,873
11,100
10,757
12,036
12,222
10,228
13,194
11,100
14,154
15,712
15,425
$1.01
$0.37
$0.91
$0.34
36,978
37,164
40,654
40,367
$(3,492
)
$3,214
$4,835
$34,825
$70,731
$32,350
33
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As of
As of July 31,
December 31,
2005
2006
2007
2008
2009
2009
(Unaudited)
(In thousands)
$
15,619
$
16,670
$
14,991
$
41,613
$
41,931
$
71,684
8,590
12,868
15,412
17,445
35,570
42,569
30,436
42,626
56,441
97,246
123,269
183,108
7,355
8,933
12,916
17,445
35,570
42,569
6,769
5,030
2,446
25,271
37,004
45,237
65,962
81,031
111,744
22,336
26,816
5,165
5,623
(11,130
)
4,468
42,238
71,364
(1)
Includes stock-based compensation
expense of $0, $0, $156,000, $1.2 million and
$2.5 million for the years ended July 31, 2005, 2006,
2007, 2008 and 2009, respectively, and $6.8 million for the
five months ended December 31, 2009.
(2)
We anticipate that our investor and
analyst presentations will include Adjusted EBITDA, which we
define as net income plus net interest expense (income), income
tax expense (benefit), depreciation and amortization, and
stock-based compensation expense and which is a financial
measure that is not calculated in accordance with GAAP. The
table below provides a reconciliation of this non-GAAP financial
measure to the most directly comparable financial measure
calculated and presented in accordance with GAAP. Adjusted
EBITDA should not be considered as an alternative to net income,
operating income or any other measure of financial performance
calculated and presented in accordance with GAAP. Our Adjusted
EBITDA may not be comparable to similarly titled measures of
other organizations because other organizations may not
calculate Adjusted EBITDA in the same manner as we do. We
prepare Adjusted EBITDA to eliminate the impact of items that we
do not consider indicative of our core operating performance.
You are encouraged to evaluate these adjustments and the reason
we consider them appropriate.
We believe Adjusted EBITDA is
useful to investors in evaluating our operating performance for
the following reasons:
Adjusted EBITDA is widely used by
investors to measure a companys operating performance
without regard to items, such as interest expense, income tax
expense, depreciation and amortization, and stock-based
compensation expense, that can vary substantially from company
to company depending upon their financing structure and
accounting policies, the book value of their assets, their
capital structures and the method by which their assets were
acquired;
securities analysts use Adjusted
EBITDA as a supplemental measure to evaluate the overall
operating performance of companies; and
we adopted a new accounting
standard for stock-based compensation effective August 1,
2006 and recorded stock-based compensation expense of
approximately $156,000, $1.2 million and $2.5 million
for the years ended July 31, 2007, 2008 and 2009,
respectively, and $6.8 million for the five months ended
December 31, 2009. Prior to August 1, 2006, we
accounted for stock-based compensation using the intrinsic value
method under previously issued guidance, which resulted in zero
stock-based compensation expense. By comparing our Adjusted
EBITDA in different historical periods, our investors can
evaluate our operating results without the additional variations
caused by stock-based compensation expense, which is not
comparable from year to year due to changes in accounting
treatment, changes in the fair market value of our common stock
(which is influenced by external factors like the volatility of
public markets) and the financial performance of our peers, and
is not a key measure of our operations.
Our management uses Adjusted EBITDA:
as a measure of operating
performance, because it does not include the impact of items not
directly resulting from our core operations;
for planning purposes, including
the preparation of our annual operating budget;
to allocate resources to enhance
the financial performance of our business;
to evaluate the effectiveness of
our business strategies; and
in communications with our board of
directors concerning our financial performance.
We understand that, although
Adjusted EBITDA is frequently used by investors and securities
analysts in their evaluations of companies, Adjusted EBITDA has
limitations as an analytical tool, and you should not consider
it in isolation or as a substitute for analysis of our results
of operations as reported under GAAP. Some of these limitations
are:
Adjusted EBITDA does not reflect
our capital expenditures or future requirements for capital
expenditures or other contractual commitments;
Adjusted EBITDA does not reflect
changes in, or cash requirements for, our working capital needs;
Adjusted EBITDA does not reflect
interest expense or interest income;
Adjusted EBITDA does not reflect
cash requirements for income taxes;
although depreciation and
amortization are non-cash charges, the assets being depreciated
or amortized will often have to be replaced in the future, and
Adjusted EBITDA does not reflect any cash requirements for these
replacements; and
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other companies in our industry may
calculate Adjusted EBITDA differently than we do, limiting its
usefulness as a comparative measure.
The following table presents a
reconciliation of Adjusted EBITDA (unaudited) to net income, the
most comparable GAAP financial measure, for each of the periods
indicated.
Five Months
Ended
Year Ended July 31,
December 31,
2005
2006
2007
2008
2009
2009
(In thousands)
$
(4,877
)
$
535
$
4,647
$
17,335
$
37,163
$
13,663
174
522
(146
)
(418
)
(395
)
(113
)
111
(3,346
)
12,261
26,902
9,764
1,211
2,046
3,524
4,407
4,593
2,254
156
1,240
2,468
6,782
$
(3,492
)
$
3,214
$
4,835
$
34,825
$
70,731
$
32,350
(3)
Includes $6,025, $2,025, $2,285,
$2,328, $15,367 and $15,381 of restricted cash as of
July 31, 2005, 2006, 2007, 2008 and 2009 and
December 31, 2009, respectively.
(4)
Our retail distributors collect
customer funds for purchases of new cards and reloads and then
remit these funds directly to bank accounts established on
behalf of those customers by the banks that issue our cards. Our
retail distributors remittance of these funds takes an
average of three business days. Settlement assets represent the
amounts due from our retail distributors for customer funds
collected at the point of sale that have not yet been remitted
to the card issuing banks. Settlement obligations represent the
amounts that are due from us to the card issuing banks for funds
collected but not yet remitted by our retail distributors and
not funded by our line of credit. We have no control over or
access to customer funds remitted by our retail distributors to
the card issuing banks. Customer funds therefore are not our
assets, and we do not recognize them in our consolidated
financial statements.
35
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48
F-9
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
36
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37
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38
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Five Months Ended December 31,
2008
2009
Percentage of Total
Percentage of Total
Amount
Operating Revenues
Amount
Operating Revenues
(Dollars in thousands)
$
46,460
52.2
%
$
50,895
45.1
%
24,391
27.4
30,509
27.1
18,212
20.4
31,353
27.8
$
89,063
100.0
%
$
112,757
100.0
%
39
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Five Months Ended December 31,
2008
2009
Percentage of Total
Percentage of Total
Amount
Operating Revenues
Amount
Operating Revenues
(Dollars in thousands)
$
35,001
39.3
%
$
31,333
27.8
%
15,409
17.3
26,610
23.6
11,765
13.2
17,480
15.5
9,463
10.6
14,020
12.4
$
71,638
80.4
%
$
89,443
79.3
%
40
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Five Months
Ended December 31,
2008
2009
35.0
%
35.0
%
5.9
6.7
1.1
42.0
%
41.7
%
41
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Year Ended July 31,
2008
2009
Percentage of Total
Percentage of Total
Amount
Operating Revenues
Amount
Operating Revenues
(Dollars in thousands)
$
91,233
54.3
%
$
119,356
50.8
%
45,310
26.9
62,396
26.6
31,583
18.8
53,064
22.6
$
168,126
100.0
%
$
234,816
100.0
%
42
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Year Ended July 31,
2008
2009
Percentage of Total
Percentage of Total
Amount
Operating Revenues
Amount
Operating Revenues
(Dollars in thousands)
$
69,577
41.4
%
$
75,786
32.3
%
28,303
16.8
40,096
17.1
21,944
13.0
32,320
13.7
19,124
11.4
22,944
9.8
$
138,948
82.6
%
$
171,146
72.9
%
43
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Year Ended July 31,
2008
2009
35.0
%
35.0
%
5.7
6.1
0.7
0.9
41.4
%
42.0
%
Year Ended July 31,
2007
2008
Percentage of Total
Percentage of Total
Amount
Operating Revenues
Amount
Operating Revenues
(Dollars in thousands)
$
45,717
54.7
%
$
91,233
54.3
%
25,419
30.4
45,310
26.9
12,488
14.9
31,583
18.8
$
83,624
100.0
%
$
168,126
100.0
%
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Year Ended July 31,
2007
2008
Percentage of Total
Percentage of Total
Amount
Operating Revenues
Amount
Operating Revenues
(Dollars in thousands)
$
38,838
46.5
%
$
69,577
41.4
%
20,610
24.6
28,303
16.8
9,809
11.7
21,944
13.0
13,212
15.8
19,124
11.4
$
82,469
98.6
%
$
138,948
82.6
%
45
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Year Ended July 31,
2007
2008
35.0
%
35.0
%
6.1
5.7
(288.9
)
(9.4
)
0.7
(257.2
)%
41.4
%
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For the Three Months Ended
Dec. 31,
March 31,
June 30,
Sep. 30,
Dec. 31,
2008
2009
2009
2009
2009
$
28,450
$
31,185
$
30,977
$
30,849
$
30,779
14,997
15,744
16,383
17,256
19,132
11,340
13,811
15,530
17,213
19,651
54,787
60,740
62,890
65,318
69,562
20,509
20,016
15,232
17,182
19,689
9,415
9,410
10,751
12,666
18,470
6,895
7,701
9,441
9,951
10,943
5,772
5,206
5,928
7,587
8,779
42,591
42,333
41,352
47,386
57,881
12,196
18,407
21,538
17,932
11,681
80
47
68
64
77
(1
)
(3
)
12,275
18,454
21,606
17,993
11,758
5,155
7,750
9,073
7,522
4,903
$
7,120
$
10,704
$
12,533
$
10,471
$
6,855
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As a Percentage of Total Operating Revenues
Dec. 31,
March 31,
June 30,
Sep. 30,
Dec. 31,
2008
2009
2009
2009
2009
51.9
%
51.4
%
49.2
%
47.2
%
44.3
%
27.4
25.9
26.1
26.4
27.5
20.7
22.7
24.7
26.4
28.2
100.0
100.0
100.0
100.0
100.0
37.4
33.0
24.2
26.3
28.3
17.2
15.5
17.1
19.4
26.6
12.6
12.7
15.0
15.2
15.7
10.5
8.5
9.5
11.6
12.6
77.7
69.7
65.8
72.5
83.2
22.3
30.3
34.2
27.5
16.8
0.1
0.1
0.1
0.1
0.1
0.0
0.0
0.0
0.0
0.0
22.4
30.4
34.3
27.6
16.9
9.4
12.8
14.4
11.5
7.0
13.0
%
17.6
%
19.9
%
16.1
%
9.9
%
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Year Ended July 31,
Five Months Ended
2007
2008
2009
December 31, 2009
(In thousands)
$
2,461
$
35,006
$
35,297
$
26,121
(4,558
)
(5,163
)
(19,400
)
(5,063
)
158
(3,264
)
(28,618
)
8,681
$
(1,939
)
$
26,579
$
(12,721
)
$
29,739
49
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50
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Payments Due by Period
Total
Less Than 1 Year
1-3 Years
3-5 Years
More Than 5 Years
(In thousands)
$
$
$
$
$
4,507
1,780
2,691
36
41,546
21,287
20,259
$
46,053
$
23,067
$
22,950
$
36
$
51
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52
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53
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Expected
Term of
Risk-Free
Option
Expected
Expected Stock
Interest Rate
(in Years)
Dividends
Price Volatility
1.9
%
6.08
56.0
%
3.1
6.08
57.0
2.9
6.08
56.0
2.5
6.08
46.0
2.6
6.08
52.0
Per Share
Per Share Estimated
Number of
Fair Value of
Weighted Average
Shares Subject to
Per Share Exercise
Our Common
Fair Value of
Options Granted
Price of Options
Stock
Options
50,000
$
10.84
$
10.84
$
5.83
85,800
15.65
15.65
8.80
127,500
17.19
17.19
9.50
1,261,750
20.01
20.01
9.47
130,500
25.00
25.00
12.98
the per share value of any recent preferred stock financing and
the amount of convertible preferred stock liquidation
preferences;
54
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any third-party trading activity in our common stock or
preferred stock;
the illiquid nature of our common stock and the opportunity for
any future liquidity events;
our current and historical operating performance and current
financial condition;
our operating and financial projections;
our achievement of company milestones;
the stock price performance of a peer group comprised of
selected publicly-traded companies identified as being
comparable to us; and
economic conditions and trends in the broad market for stocks.
the nature of our industry and current market conditions;
the quality, reliability and verifiability of the data used in
each methodology;
the comparability of publicly held companies or transactions; and
any additional considerations unique to our company as of each
valuation date.
55
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56
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57
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58
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59
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Never-banked households in which no one has ever had
a bank account;
Previously-banked households in which at least one
member has previously had a bank account, but no one has one
currently;
Underbanked households in which at least one member
currently has a bank account, but that also use non-bank
financial service providers to conduct routine transactions like
check cashing or bill payment; and
Fully-banked households that primarily rely on
traditional financial services.
60
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61
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Card Issuing Banks
banks that are authorized
by payment networks to issue cards and that provide accounts to
hold deposits. Many card issuing banks also manage settlement
and provide risk management services. A banks
participation in a prepaid card program can range from actively
managing and marketing the card program to providing passive
sponsorship into payment networks.
Payment Networks
companies, such as Visa and
MasterCard, that facilitate
point-of-sale
card acceptance, provide purchase and withdrawal transaction
routing and processing between merchant acquirers and card
issuing banks, perform certain clearing and settlement functions
and provide marketing and support services to card issuing
banks. Payment networks also establish network rules and
establish processing and security standards and customer
protections to which all participating members must adhere.
Processors
technology vendors that provide
connectivity to payment networks, maintain account balances, and
authorize purchase and withdrawal transactions. Many processors
provide additional services, including card activation and
customer service, and develop
and/or
integrate value-added cardholder applications such as online
bill payment, microlending and mobile payment services.
Program Managers
specialized vendors that
design, manage, market and operate prepaid card programs.
Prepaid card program managers may provide a range of services or
delegate that provision to other specialized vendors, such as
card issuing banks, processors and distributors, and collaborate
with them as these programs are implemented. Prepaid card
program managers may also negotiate the allocation of fees and
risk management with all vendors involved in a particular
prepaid card program.
Distributors
organizations, such as
retailers, remittance vendors, tax preparers, check cashers,
payday lenders, card resellers and employers, that distribute
cards through various sales channels and may also manage
inventory fulfillment and provide
point-of-sale
integration and technology.
Reload Networks
vendors that provide products
and services, connectivity, technology and integration which
enable
point-of-sale
locations to accept cash payments and associate those payments
with a specific account. These vendors also provide transaction
routing and processing between the point of sale and the
destination of the fund transfer. A small number of reload
networks have proprietary brands, acceptance locations and
technology, while most take advantage of the brands, technology
and
point-of-sale
relationships of other third-party vendors.
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63
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64
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Attracting new users by introducing new products, improving
current products to address consumers current and evolving
needs, and building demand for our products through promotions;
Expanding and strengthening our distribution by establishing
relationships with additional high-quality retail chains,
increasing online distribution of our products and accelerating
our entry into new distribution channels, including
collaborating with third-party service providers, such as
electronic tax preparation providers; and
Adding network acceptance members to and applications for the
Green Dot Network by continuing to enroll additional third-party
prepaid card program providers that want to offer their
cardholders access to our reload network and to identify
additional uses for our reload networks cash transfer
technology.
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increase our efficiency in introducing and managing potential
new products and services, which are more difficult to
accomplish with multiple unaffiliated card issuing banks;
reduce the risk that we would be negatively impacted by one of
the banks that issue our cards changing its business practices
as a result of, among other things, a change of strategic
direction, financial hardship or regulatory developments;
reduce the sponsorship and service fees and other expenses that
we incur each year to the third-party banks that issue our
cards, and correspondingly increase funds available to us to
spend on other aspects of our business, including the ability to
invest in further reducing consumer pricing; and
further increase the degree to which our operations are
integrated and provide increased control over our operations.
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Never-banked households in which no one has ever had
a bank account;
Previously-banked households in which at least one
member has previously had a bank account, but no one has one
currently;
Underbanked households in which at least one member
currently has a bank account, but that also use non-bank
financial service providers to conduct routine transactions like
check cashing or bill payment; and
Fully-banked households that primarily rely on
traditional financial services.
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Walmart, Kmart, Meijer
Walgreens, CVS, Rite-Aid, Duane Reade
7-Eleven, The Pantry (Kangaroo Express)
Kroger
RadioShack
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The Green PlaNET front-end processing system communicates with
the host systems of retail distributors and network acceptance
members through a proprietary application programming interface,
or API, and runs a variety of proprietary and third-party
software applications that facilitate the purchase of a card at
a retail location as well as the loading of cash onto a card or
MoneyPak. It enables our reload network to interoperate with
funds transfer networks and engages in real-time transaction
verification so that cards do not exceed applicable limits, thus
ensuring compliance with our anti-money laundering program.
The Green PlaNET back-end processing system runs a variety of
proprietary and third-party software applications that enable
the activation, daily use and maintenance of our cardholder
accounts. It executes a variety of transaction-enabling
processes and initiates several customer verification modules,
such as internally developed anti-money laundering, Know
Your Customer and Office of Foreign Assets Control
requirements, and external data requests from outsourced
vendors, such as Experian and LexisNexis, that together ensure
compliance with all federal requirements for the opening of a
new account. It interfaces with our database to generate account
statements and initiate account notification communications,
such as emails and text messages. It also enables our cards to
interoperate with Visa, MasterCard and other payment or funds
transfer networks, interacts with the systems of other
processors and executes back-end batch processes, such as
transaction fee calculations, charge-back transactions, retailer
invoicing and account write-offs, that facilitate the daily
accounting, reconciliation
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and settlement of transactions and account activity. In
addition, the Green PlaNET back-end processing system houses a
variety of security applications that provide customer and card
data encryption, fraud monitoring, information security
administration and firewalls that protect the Green PlaNET
infrastructure.
The Green PlaNET customer-facing systems include a service
processing system and various communication systems. The Green
PlaNET service processing system includes several customer
relationship management software applications that operate a
variety of support services, providing real-time account history
access and pending transaction data, contact information,
personal identification number request and issuance services and
balance inquiry applications. It also enables consumers to
direct cash transfers using our MoneyPak product. In addition,
Green PlaNET provides our consumers, retail distributors and
network acceptance members with the ability to communicate with
us and access accounts using a variety of technologies. These
technologies integrate with our customer care applications and
allow us, among other things, to address customer inquiries and
automatically prompt customer support agents to sell upgrades
and make cross-sales. We have also integrated Green PlaNET with
our website, www.greentdot.com, to provide a full range of
interactive services, including online card sales, full
activation and personalization services, electronic funds
transfers, and access to account histories and management
services.
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breadth of distribution;
brand recognition;
the ability to reload funds;
compliance and regulatory capabilities;
72
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enterprise-class and scalable IT;
pricing.
the number and quality of retail locations;
brand recognition;
product and service functionality;
number of cardholders and customers using the service;
reliability of the service;
retail price;
enterprise-class
and scalable IT;
ability to integrate quickly with multiple payment platforms and
distributors;
compliance and regulatory capabilities.
brand recognition with consumers and retailers;
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the ability to reload funds;
ability to develop and maintain strong relationship with retail
distributors;
compliance and regulatory capabilities;
pricing; and
large customer base.
anti-money laundering laws;
money transfer and payment instrument licensing regulations;
escheatment laws;
privacy and information safeguard laws;
bank regulations; and
consumer protection laws.
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report large cash transactions and suspicious activity;
screen transactions against the U.S. governments
watch-lists, such as the watch-list maintained by the Office of
Foreign Assets Control;
prevent the processing of transactions to or from certain
countries, individuals, nationals and entities;
identify the dollar amounts loaded or transferred at any one
time or over specified periods of time, which requires the
aggregation of information over multiple transactions;
gather and, in certain circumstances, report customer
information;
comply with consumer disclosure requirements; and
register or obtain licenses with state and federal agencies in
the United States and seek registration of our retail
distributors and network acceptance members when necessary.
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48
Chairman, President and Chief Executive Officer
41
President, Cards and Network
36
Chief Financial Officer
44
General Counsel and Secretary
44
Chief Operating Officer
71
Director
53
Director
59
Director
55
Director
58
Director
63
Director
*
Lead independent director.
(1)
Member of our audit committee.
(2)
Member of our compensation committee.
(3)
Member of our nominating and governance committee.
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Class I directors are Messrs. Ott and Smith (current
terms expiring in 2011);
Class II directors are Mr. Aldrich and Ms. Hanna
(current terms expiring in 2012); and
Class III directors are Messrs. Greenleaf, Moritz and
Streit (current terms expiring in 2013).
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appoints our independent auditors;
approves the audit and non-audit services to be performed by our
independent auditors;
assesses the qualifications, performance and independence of our
independent auditors;
monitors the integrity of our financial statements and our
compliance with legal and regulatory requirements as they relate
to financial statements or accounting matters;
reviews the integrity, adequacy and effectiveness of our
accounting and financial reporting processes and the adequacy
and effectiveness of our systems of internal control;
discusses the results of the audit with the independent auditors
and reviews with management and the independent auditors our
interim and year-end operating results; and
prepares the audit committee report that the SEC requires in our
annual proxy statement.
reviews, approves and makes recommendations to our board of
directors regarding the compensation of our executive officers;
administers and interprets our stock and equity incentive plans;
reviews, approves and makes recommendations to our board of
directors (as our compensation committee deems appropriate) with
respect to equity and
non-equity
incentive compensation plans; and
establishes and reviews general strategies relating to
compensation and benefits of our employees.
identifies, evaluates and recommends nominees to our board of
directors and its committees;
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oversees the evaluation of the performance of our board of
directors and its committees and of individual directors;
considers and makes recommendations to our board of directors
regarding the composition of our board of directors and its
committees;
reviews our legal compliance policies; and
makes recommendations to our board of directors concerning our
corporate governance guidelines and other corporate governance
matters.
Stock Awards
$
39,990
(1)
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*
Former director.
(1)
Represents the grant date fair value of 3,720 fully-vested
shares of our common stock that were issued to
Mr. Greenleaf as compensation for his services as chair of
our audit committee on December 11, 2008 under our 2001
Stock Plan.
(2)
Mr. Ott was appointed to our board of directors after the
completion of fiscal 2009 and did not receive any compensation
for fiscal 2009.
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Steven W. Streit, Chairman, President and Chief Executive
Officer, or CEO;
Mark T. Troughton, President, Cards and Network;
John L. Keatley, Chief Financial Officer;
John C. Ricci, General Counsel and Secretary; and
William D. Sowell, Chief Operating Officer.
attract and retain talented and experienced executives;
motivate and reward executives whose knowledge, skills and
performance are critical to our success;
link compensation to company performance and individual
achievement;
link specific cash-based elements of compensation to our
near-term financial performance; and
align the interests of our executive officers and those of our
stockholders by providing our executive officers with long-term
incentives to increase stockholder value.
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base salary;
variable and other cash incentive awards linked to corporate
and/or
individual objectives; and
periodic grants of long-term equity-based awards.
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On-Target
Bonus Amount
$
75,000
100,000
100,000
100,000
28,471
(1)
(1)
Mr. Sowells annual on-target bonus amount was
$70,500, prorated based on his date of hire of March 2,
2009. In connection with the hiring of Mr. Sowell as our
Chief Operating Officer in March 2009, we negotiated an
employment arrangement with him that provided for an on-target
bonus amount equal to 30% of his base annual salary, which we
believed was the level of variable cash incentive compensation
required to attract qualified candidates and provide the
candidate selected with appropriate incentives during his first
year of service.
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directly or indirectly linked to our companys achievement
of its objectives;
aspirational i.e., their achievement should
represent a bonus-worthy accomplishment; and
linked to the executive officers job description and
direct responsibilities.
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health insurance;
vacation, personal holidays and sick days;
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life insurance and supplemental life insurance;
short-term and long-term disability insurance; and
a 401(k) retirement plan with matching contributions.
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Non-Equity
Fiscal
Stock
Option
Incentive Plan
All Other
Salary(1)
Awards(2)
Awards(3)
Compensation(4)
Compensation
Total(5)
8/09-12/09*
$
190,385
$
5,162,260
$
3,788,518
$
31,250
$
1,281
(6)
$
9,173,694
2009
450,000
75,000
3,209
(6)
528,209
8/09-12/09*
148,077
1,894,259
41,667
2,084,003
2009
339,231
150,000
(7)
489,231
8/09-12/09*
126,923
1,420,694
41,667
1,589,284
2009
289,231
1,262,215
100,000
1,651,446
8/09-12/09*
116,346
947,130
41,667
1,105,143
2009
269,615
560,985
100,000
930,600
8/09-12/09*
120,576
949,938
48,231
52,147
(9)
1,170,892
2009(8)
94,904
233,055
26,051
24,176
(9)
378,186
*
Effective September 2009, we changed our fiscal year-end from
July 31 to December 31. Amounts in this row are for
the five months ended December 31, 2009.
(1)
Effective in October 2008, the following named executive
officers received an increase in annual base salary to the
amounts set forth after their names:
Mr. Troughton $350,000;
Mr. Keatley $300,000 and
Mr. Ricci $275,000. Effective in July 2009,
Mr. Sowell received an increase in annual base salary to
$285,000. Effective in January 2010, the following named
executive officers received an increase in annual base salary to
the amounts set forth after their names:
Mr. Streit $525,000;
Mr. Troughton $475,000;
Mr. Keatley $425,000; and
Mr. Ricci $350,000.
(2)
The amount in this column represents the grant date fair value
of the stock award granted to Mr. Streit, as discussed in
note 11 of our notes to consolidated financial statements.
(3)
The amounts in this column represent the grant date fair values
of stock option awards granted to the named executive officers
in the applicable period, as discussed in note 11 of our
notes to consolidated financial statements. See the Grants
of Plan-Based Awards table below for information on stock
option grants made during fiscal 2009 and the five months ended
December 31, 2009.
(4)
The amounts in this column generally (see footnote 7) represent
total performance-based bonuses under our FY2010 and FY2009
Management Cash Incentive Compensation Plans earned for services
rendered in the applicable period. See the Grants of
Plan-Based Awards table below for information on awards
made under these plans.
(5)
The amounts in this column represent the sum of the compensation
amounts reflected in the other columns of this table.
(6)
Represents a health insurance premium paid by us in the
applicable period on behalf of Mr. Streit.
(7)
Includes a $50,000 incentive bonus awarded in January 2009 for
Mr. Troughtons success at securing a key commercial
agreement on acceptable terms. This bonus was not awarded under
our FY2009 Management Cash Incentive Compensation Plan.
(8)
Mr. Sowell joined our company in March 2009 and his
compensation set forth in this row represents the amount earned
from the commencement of his employment through July 31,
2009.
(9)
Represents perquisites and personal benefits received in the
applicable period pursuant to Mr. Sowells housing and
travel allowance.
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Number of
Grant Date
Shares
Exercise
Fair Value of
Estimated Possible Payouts Under
Number of
Underlying
Price of
Stock and
Grant
Non-Equity Incentive Plan Awards
Shares of
Option
Option
Option
Date
Threshold
Target
Maximum
Stock
Awards(1)
Awards(2)
Awards(3)
FY09(4)
$
37,500
$
75,000
$
75,000
FY10(4)
15,625
31,250
31,250
11/02/09
400,000
$
20.01
$
3,788,518
12/30/09(5)
257,984
5,162,260
FY09(4)
50,000
100,000
100,000
(6)
50,000
50,000
50,000
FY10(4)
20,833
41,667
41,667
11/02/09
200,000
20.01
1,894,259
FY09(4)
50,000
100,000
100,000
FY10(4)
20,833
41,667
41,667
12/11/08
225,000
10.75
1,262,215
11/02/09
150,000
20.01
1,420,694
FY09(4)
50,000
100,000
100,000
FY10(4)
20,833
41,667
41,667
12/11/08
100,000
10.75
560,985
11/02/09
100,000
20.01
947,130
FY09(4)(7)
1,325
32,708
32,708
FY10(4)
24,115
48,231
48,231
03/19/09
40,000
10.84
233,055
08/03/09
100,000
17.19
949,938
(1)
These option awards vest as to 25% of the shares of common stock
underlying the option on the first anniversary of the vesting
commencement date, with the remainder of the shares vesting
monthly in equal installments over the next three years. All
options were granted under our 2001 Stock Plan, which is
described below under Employee Benefit
Plans, and contain provisions that call for accelerated
vesting upon a change of control as discussed above in
Compensation Discussion and Analysis and
below in Severance and Change of Control
Agreements.
(2)
Represents the fair market value of a share of our common stock,
as determined by our board of directors, on the options
grant date. Please see Managements Discussion and
Analysis of Financial Condition and Results of
Operations Critical Accounting Policies and
Estimates
Stock-Based
Compensation above for a discussion of how we have valued
our common stock.
(3)
The amounts in this column represent the grant date fair values
for equity awards granted to the named executive officers as
discussed in note 11 of our notes to consolidated financial
statements.
(4)
These rows represent possible cash incentive awards under our
FY2009 Management Cash Incentive Compensation Plan (FY09) or
FY2010 Management Cash Incentive Compensation Plan (FY10), as
the case may be, upon our achievement of applicable corporate
profit goals. Actual awards are only payable if the corporate
objectives (i.e., PBT targets) are achieved at a level of at
least 90%. Actual awards cannot exceed 100% of the target amount
and are adjusted downward in the event corporate objectives are
achieved at a level between 90% and 100% by subtracting
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the actual percentage achievement from 100%, multiplying that
percentage by 5 and subtracting the resulting percentage from
100%, which is then multiplied against the target bonus amount.
Bonuses were paid on a semi-annual basis. See
Compensation Discussion and Analysis
above for further discussion of these awards.
(5)
In December 2009, our board of directors awarded
257,984 shares of common stock to Mr. Streit to
compensate him for past services rendered to our company. The
number of shares awarded was equal to the number of shares
underlying fully-vested stock options that were unintentionally
allowed to expire unexercised in June 2009.
(6)
Represents a cash incentive award conditioned upon
Mr. Troughtons success at securing a key commercial
agreement on acceptable terms. See
Compensation Discussion and Analysis
above for additional information regarding this award.
(7)
Mr. Sowells award under our FY2009 Management Cash
Incentive Compensation Plan was also based on individual
objectives intended to promote achievement of non-financial
operational goals within his area of responsibility, as further
discussed in Compensation Discussion and
Analysis above, including the re-launch of our new Green
Dot-branded GPR card, integration of PayPal as a network
acceptance member and developing enterprise processes for
coordinating new product development and assessing
organizational risk.
Option
Option
Number of Securities Underlying Unexercised Options(1)
Exercise
Expiration
Exercisable
Unexercisable
Price(2)
Date
536,602
$
1.55
6/05/14
116,666
83,334
4.64
2/12/18
400,000
20.01
11/02/19
145,833
7,292
1.41
1/17/16
262,500
187,500
4.64
2/12/18
200,000
20.01
11/02/19
4,375
1.41
9/15/14
3,125
1.41
8/22/15
22,917
1,042
1.41
1/17/16
24,374
4,167
1.41
4/24/16
165,000
125,000
4.64
2/12/18
56,250
168,750
10.75
12/9/18
150,000
20.01
11/02/19
65,012
0.83
4/25/13
192,029
5,209
1.41
1/17/16
71,154
52,084
4.64
2/12/18
25,000
75,000
10.75
12/9/18
100,000
20.01
11/02/19
40,000
10.84
3/17/19
100,000
17.19
08/03/19
(1)
All options vest as to 25% of the shares of common stock
underlying the option on the first anniversary of the vesting
commencement date, with the remainder of the shares vesting
monthly in equal installments over the next three years.
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(2)
Represents the fair market value of a share of our common stock,
as determined by our board of directors, on the options
grant date. Please see Managements Discussion and
Analysis of Financial Condition and Results of
Operations Critical Accounting Policies and
Estimates
Stock-Based
Compensation for a discussion of how we have valued our
common stock.
Option Awards
Stock Awards
Number
Number
Value
of Shares
Value
of Shares
Realized
Acquired
Realized
Acquired on
on
on
on
Exercise
Exercise
Vesting
Vesting
$
257,984
$
5,162,260
10,000
153,700
58,924
1,008,481
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Accelerated
Stock
Severance Amount
Options
$
225,000
$
175,000
150,000
137,000
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Accelerated
Stock Options
$
shares subject to options granted under our 2010 Equity
Incentive Plan that cease to be subject to the option for any
reason other than exercise of the option;
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shares subject to awards granted under our 2010 Equity Incentive
Plan that are subsequently forfeited or repurchased by us at the
original issue price; and
shares subject to awards granted under our 2010 Equity Incentive
Plan that otherwise terminate without shares being issued.
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for any breach of their duty of loyalty to our company or our
stockholders;
for any act or omission not in good faith or that involves
intentional misconduct or a knowing violation of law;
for unlawful payments of dividends or unlawful stock repurchases
or redemptions as provided in Section 174 of the Delaware
General Corporation Law; or
for any transaction from which they derived an improper personal
benefit.
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we have been or are to be a participant;
the amount involved exceeded or exceeds $120,000; and
any of our directors, executive officers or holders of more than
5% of our capital stock, or any immediate family member of or
person sharing the household with any of these individuals, had
or will have a direct or indirect material interest.
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each stockholder known by us to be the beneficial owner of more
than 5% of our common stock;
each of our directors;
each of our named executive officers;
all of our directors and executive officers as a group; and
each selling stockholder.
Shares Beneficially
Owned Prior to
the Offering
Shares of
Shares Beneficially Owned after the Offering
Class B
Class A
Class A
Class B
% of Total
Common Stock
Common Stock
Common Stock
Common Stock
Voting
Shares
%
Being Offered
Shares
%
Shares
%
Power
12,099,373
31.9
%
5,015,688
13.0
4,106,783
10.8
1,201,366
3.1
1,176,790
3.1
580,879
1.5
400,630
1.1
388,931
1.0
357,687
*
17,000
*
11,666
*
25,356,793
63.8
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*
Represents beneficial ownership of less than 1% of our
outstanding shares of common stock.
**
The shares of Class A common stock being offered by this
individual will be acquired through the exercise of options at
the closing of this offering, and thus the number of shares
shown in the footnotes as being subject to options will be
reduced by the same number after the offering.
Each share of Class B common stock is immediately
convertible into one share of Class A common stock. As of
March 31, 2010, there were no shares of Class A common
stock outstanding. Accordingly, as of March 31, 2010, the
percentage of shares of Class B common stock beneficially
owned by each person is equal to both that persons total
beneficial ownership percentage and that persons
percentage of total voting power.
Each share of Class B common stock is immediately
convertible into one share of Class A common stock.
Accordingly, for the purpose of computing the percentage of
Class A shares beneficially owned by each person who holds
Class B common stock after the offering, each share of
Class B common stock is deemed to have been converted into
a share of Class A common stock, but such shares of
Class B common stock are not deemed to have been converted
into Class A common stock for the purpose of computing the
percentage ownership of any other person.
Holders of Class A common stock are entitled to one vote
per share and holders of Class B common stock are entitled
to ten votes per share. Holders of common stock vote together as
a single class on all matters submitted to a vote of
stockholders, subject to certain exceptions or unless otherwise
required by law. For the purpose of computing the percentage of
total voting power after the offering, each share of
Class B common stock is deemed not to have been converted
into a share of Class A common stock, and thus represents
ten votes per share.
(1)
Represents 7,778,099 shares owned by Sequoia Capital
Franchise Fund, 1,850,387 shares owned by Sequoia Capital
IX, 1,246,945 shares owned by Sequoia Capital US Growth
Fund IV, L.P., 1,060,650 shares owned by Sequoia
Capital Franchise Partners and 163,292 shares owned by
Sequoia Capital Entrepreneurs Annex Fund. SCFF Management,
LLC is the sole general partner of Sequoia Capital Franchise
Fund and Sequoia Capital Franchise Partners. SCIX Management,
LLC is the sole general partner of Sequoia Capital IX and
Sequoia Capital Entrepreneurs Annex Fund. SCGF IV Management, LP
(Cayman) is the mid-tier general partner and SCGF GenPar, Ltd.
(Cayman) is the top tier general partner of Sequoia Capital US
Growth Fund IV, LP. Michael J. Moritz, one of our
directors, is a Managing Director of SCGF GenPar, Ltd. (Cayman),
and he is a Managing Member of SCFF Management, LLC, SCIX
Management, LLC, SCGF IV Management, LP and SCGF IV Management,
LP (Cayman). Mr. Moritz may be deemed to have shared voting
and investment power over the shares held by Sequoia Capital
Franchise Fund, Sequoia Capital IX, Sequoia Capital US Growth
Fund IV, L.P., Sequoia Capital Franchise Partners and
Sequoia Capital Entrepreneurs Annex Fund, as applicable.
Mr. Moritz disclaims beneficial ownership of those shares,
except to the extent of his pecuniary interest therein. The
address for Mr. Moritz and each of these entities is 3000
Sand Hill Road, Building 4, Suite 250, Menlo Park,
California 94025.
(2)
Represents 4,311,713 shares owned by the Steven W. Streit
Family Trust, of which Mr. Streit is the trustee,
34,040 shares owned by his children and 669,935 shares
subject to options held by Mr. Streit that are exercisable
within 60 days of March 31, 2010.
(3)
W. Thomas Smith, Jr., one of our directors, is a managing
partner of Total Technology Ventures, LLC, the general partner
of TTP Fund, L.P. The other managing partner is Gardiner W.
Garrard. The address for Mr. Smith and each of these
entities is 1230 Peachtree Street, Promenade II,
Suite 1190, Atlanta, Georgia 30309.
(4)
Includes 453,125 shares subject to options held by
Mr. Troughton that are exercisable within 60 days of
March 31, 2010.
(5)
Represents 1,029,955 shares held by the David William Hanna
Trust dated October 30, 1989, 78,635 shares held by
Tim J. Morgan, Trustee of the Hanna 2008 Annuity
Trust Dated 6/5/08
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and 68,200 shares held by the Virginia L. Hanna Trust dated
August 16, 2001. Ms. Hanna disclaims beneficial
ownership of the shares held by the David William Hanna Trust
dated October 30, 1989 and the shares held by Tim J.
Morgan, Trustee of the Hanna 2008 Annuity Trust dated 6/5/08,
except to the extent of her pecuniary interest therein. The
address of these trusts is
c/o Hanna
Capital Management, 8105 Irvine Center Drive, Suite 1170,
Irvine, California 92618.
(6)
Represents 330,190 shares held by The Greenleaf Family
Trust Dated May 16, 1999, of which Timothy R.
Greenleaf, one of our directors, is the trustee, and
250,689 shares held by Mr. Greenleaf.
(7)
Represents shares held by YKA Partners Ltd., of which Kenneth C.
Aldrich, one of our directors, is the agent of the general
partner.
(8)
Represents 5,234 shares held by John C. Ricci,
4,460 shares held by his minor children and
379,237 shares subject to options held by Mr. Ricci that
are exercisable within 60 days of March 31, 2010.
(9)
Represents 25,000 shares held by John L. Keatley,
3,000 shares held by his minor daughters and
329,687 shares subject to options held by Mr. Keatley
that are exercisable within 60 days of March 31, 2010.
This amount does not include 10,000 shares held by the
Keatley Family Trust, of which he is neither a trustee nor a
beneficiary.
(10)
Represents shares subject to options held by Mr. Ott that
are exercisable within 60 days of March 31, 2010.
(11)
Represents shares subject to options held by Mr. Sowell
that are exercisable within 60 days of March 31, 2010.
(12)
Includes 1,860,650 shares subject to options that are
exercisable within 60 days of March 31, 2010.
(13)
Represents shares held
by
selling stockholders, no one of whom owns more than 1% of our
outstanding shares of Class B common stock or is selling
more
than shares.
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each stockholder known by us to be the beneficial owner of more
than 5% of our common stock;
each of our directors;
each of our named executive officers;
all of our directors and executive officers as a group; and
each selling stockholder.
Shares Beneficially Owned
after Offering if the
Number of Shares
Underwriters Option is
to be Sold if the
Exercised in Full
Underwriters
Class A
Class B
% Total
Option is
Common Stock
Common Stock
Voting
Exercised in Full
Shares
%
Shares
%
Power
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If we were to seek to amend our certificate of incorporation to
increase the authorized number of shares of a class of stock, or
to increase or decrease the par value of a class of stock, then
that class would be required to vote separately to approve the
proposed amendment; and
If we were to seek to amend our certificate of incorporation in
a manner that altered or changed the powers, preferences or
special rights of a class of stock in a manner that affected its
holders adversely, then that class would be required to vote
separately to approve the proposed amendment.
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Total Number of
Shares Subject
Exercise Price
to Warrants
Per Share
Expiration Date
4,283,456
(1)
$
23.70
March 3, 2017(2)
283,786
1.41
February 11, 2012
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*
This warrant is redeemable for cash if we fail to perform under
our commercial agreement with the holder. In addition, we have
the right to repurchase any shares previously issued upon the
exercise of the warrant if the holder fails to perform under the
same agreement.
(1)
Of these shares, 3,426,765 shares will vest and become
exercisable only upon the achievement of certain performance
goals prior to the earlier of March 3, 2014 or the
termination of our commercial agreement with the holder, and the
remaining shares will vest and become exercisable only if
certain other performance goals also take place prior to the
same deadline.
(2)
The warrant may expire earlier than this date. The warrant
provides that it expires on the earlier of March 3, 2014 or
the termination of our commercial agreement with the holder if
none of the shares subject to the warrant have vested prior to
the earlier event. Should any of the shares subject to the
warrant vest, the warrant expires on the earliest of the date on
which our commercial agreement with the holder is terminated,
the date of a change in control of our company or March 3,
2017.
(3)
If this warrant to purchase shares of our
Series C-1
preferred stock remains outstanding following the completion of
this offering, it will become exercisable for a like number of
shares of our Class B common stock.
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Board of Directors Vacancies.
Our restated
certificate of incorporation and restated bylaws authorize only
our board of directors to fill vacant directorships. In
addition, the number of directors constituting our board of
directors is permitted to be set only by a resolution adopted by
a majority vote of our entire board of directors. These
provisions would prevent a stockholder from increasing the size
of our board of directors and then gaining control of our board
of directors by filling the resulting vacancies with its own
nominees.
Classified Board.
Our restated certificate of
incorporation and restated bylaws provide that our board is
classified into three classes of directors. This could delay a
successful tender offeror from obtaining majority control of our
board of directors, and the prospect of that delay might
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deter a potential offeror. In addition, stockholders are not
permitted to cumulate their votes for the election of directors.
Stockholder Action; Special Meeting of
Stockholders.
Our restated certificate of
incorporation provides that our stockholders may not take action
by written consent, but may only take action at annual or
special meetings of our stockholders. Our restated bylaws
further provide that special meetings of our stockholders may be
called only by a majority of our board of directors, the
chairman of our board of directors, our chief executive officer
or our president.
Advance Notice Requirements for Stockholder Proposals and
Director Nominations
. Our restated bylaws provide advance
notice procedures for stockholders seeking to bring business
before our annual meeting of stockholders, or to nominate
candidates for election as directors at our annual meeting of
stockholders. Our restated bylaws also specify certain
requirements regarding the form and content of a
stockholders notice. These provisions might preclude our
stockholders from bringing matters before our annual meeting of
stockholders or from making nominations for directors at our
annual meeting of stockholders.
Limits on Voting Power.
Our restated
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 and
Class B common stock. These provisions might make it more
difficult for, or discourage an attempt by, such a stockholder
to obtain control of us by means of a merger, tender offer,
proxy contest or other means.
Issuance of Undesignated Preferred Stock.
Our
board of directors has the authority, without further action by
the stockholders, to issue up to 5,000,000 shares of
undesignated preferred stock with rights and preferences,
including voting rights, designated from time to time by our
board of directors. The existence of authorized but unissued
shares of preferred stock would enable our board of directors to
render more difficult, or to discourage an attempt to obtain
control of us by means of, a merger, tender offer, proxy contest
or similar transaction.
115
Table of Contents
shares
will be eligible for sale immediately upon completion of this
offering;
shares
will be eligible for sale beginning 90 days after the date
of this prospectus; and
shares
will be eligible for sale upon the expiration of the
lock-up
and/or
market standoff agreements described below, subject in some
cases to the volume and other restrictions of Rule 144 and
Rule 701 also described below.
116
Table of Contents
1% of the number of shares of our Class A and Class B
common stock then outstanding, which will equal
approximately shares
immediately after this offering; or
the average weekly trading volume of our Class A common
stock during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to that sale.
117
Table of Contents
118
Table of Contents
Number of
Shares
Paid by Us
Paid by Selling Stockholders
Total
No Exercise
Full Exercise
No Exercise
Full Exercise
No Exercise
Full Exercise
$
$
$
$
$
$
$
$
$
$
$
$
119
Table of Contents
120
Table of Contents
the information set forth in this prospectus and otherwise
available to the representatives;
our prospects and the history of and prospects for the industry
in which we compete;
an assessment of our management;
our prospects for future earnings;
the general condition of the securities markets at the time of
this offering;
121
Table of Contents
the recent market prices of, and demand for, publicly traded
common stock of generally comparable companies; and
other factors deemed relevant by the underwriters and us.
to legal entities that are authorized or regulated to operate in
the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
to any legal entity that has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
to fewer than 100 natural or legal persons (other than qualified
investors as defined in the EU Prospectus Directive) subject to
obtaining the prior consent of the book-running managers for any
such offer; or
in any other circumstances that do not require the publication
by the issuer of a prospectus pursuant to Article 3 of the
EU Prospectus Directive.
122
Table of Contents
123
Page
F-2
F-3
F-4
Stockholders Equity (Deficit)
F-5
F-6
F-7
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
Year Ended July 31,
Five Months Ended
2007
2008
2009
December 31, 2009
(In thousands, except per share data)
$
45,717
$
91,233
$
119,356
$
50,895
25,419
45,310
62,396
30,509
12,488
31,583
53,064
31,353
83,624
168,126
234,816
112,757
38,838
69,577
75,786
31,333
20,610
28,303
40,096
26,610
9,809
21,944
32,320
17,480
13,212
19,124
22,944
14,020
82,469
138,948
171,146
89,443
1,155
29,178
63,670
23,314
771
665
396
115
(625
)
(247
)
(1
)
(2
)
1,301
29,596
64,065
23,427
(3,346
)
12,261
26,902
9,764
4,647
17,335
37,163
13,663
(5,157
)
(13,650
)
(29,000
)
(9,170
)
$
(510
)
$
3,685
$
8,163
$
4,493
$
(0.05
)
$
0.34
$
0.68
$
0.37
$
(0.05
)
$
0.26
$
0.52
$
0.29
11,100
10,757
12,036
12,222
11,100
14,154
15,712
15,425
$
1.01
$
0.37
$
0.91
$
0.34
36,978
37,164
40,654
40,367
F-4
Table of Contents
Consolidated Statements of Changes in Redeemable
Convertible
Preferred Stock and in Stockholders Equity (Deficit)
Stockholders Equity (Deficit)
Redeemable
Related
(Accumulated
Total
Convertible
Convertible
Additional
Party
Deficit)
Stockholders
Preferred Stock
Preferred Stock
Common Stock
Paid-in
Notes
Retained
Equity
Shares
Amount
Shares
Amount
Shares
Amount
Capital
Receivable
Earnings
(Deficit)
(In thousands)
$
24,088
$
18,540
11,508
$
12
$
1,318
$
(4,020
)
$
(9,695
)
$
6,155
1,361
1
1,065
1,066
(711
)
(711
)
191
(191
)
156
156
2,926
18,701
(251
)
(195
)
(2,675
)
(3
)
(2,191
)
(16,419
)
(18,808
)
3,635
(3,635
)
(3,635
)
4,647
4,647
2,926
22,336
23,837
18,345
10,194
10
539
(4,922
)
(25,102
)
(11,130
)
1,559
2
1,621
1,623
(120
)
(120
)
193
(193
)
1,240
1,240
4,480
(4,480
)
(4,480
)
17,335
17,335
2,926
26,816
23,837
18,345
11,753
12
3,593
(5,235
)
(12,247
)
4,468
308
415
415
(364
)
(364
)
215
(215
)
2,468
2,468
1,956
(1,956
)
(1,956
)
(2,926
)
(28,772
)
1,105
12,977
(21
)
(1,778
)
(9,197
)
2,002
(1,958
)
(1,958
)
37,163
37,163
24,942
31,322
12,040
12
2,955
(5,814
)
13,763
42,238
562
1
2,811
2,812
55
(55
)
5,869
5,869
258
6,782
6,782
13,663
13,663
$
24,942
$
31,322
12,860
$
13
$
12,603
$
$
27,426
$
71,364
F-5
Table of Contents
Year Ended July 31,
Five Months Ended
2007
2008
2009
December 31, 2009
(In thousands)
$
4,647
$
17,335
$
37,163
$
13,663
3,524
4,407
4,593
2,254
7,909
16,135
22,548
11,218
156
1,240
2,468
6,782
(133
)
50
61
60
405
77
(2,635
)
40
(1,731
)
3,530
(524
)
(1,866
)
(2,544
)
(2,033
)
(18,125
)
(6,999
)
(11,001
)
(24,717
)
(29,853
)
(20,241
)
(551
)
(2,263
)
(903
)
(919
)
(862
)
(2,750
)
2,297
(5,548
)
2,607
4,665
3,170
8,135
3,983
4,529
18,125
6,999
3,888
10,785
(5,309
)
5,153
(2,000
)
4,394
(978
)
7,603
(4,527
)
3,713
1,366
(3,780
)
2,461
35,006
35,297
26,121
(260
)
(43
)
(13,039
)
(14
)
(4,298
)
(5,120
)
(6,361
)
(5,049
)
(4,558
)
(5,163
)
(19,400
)
5,063
(2,584
)
(2,446
)
(148,560
)
(76,961
)
(12,404
)
151,056
74,465
12,404
355
1,154
110
946
524
1,866
(1,958
)
20,000
13,000
(20,109
)
(39,770
)
5,869
158
(3,264
)
(28,618
)
8,681
(1,939
)
26,579
(12,721
)
29,739
14,645
12,706
39,285
26,564
$
12,706
$
39,285
$
26,564
$
56,303
$
427
$
100
$
1
$
$
3,805
$
8,104
$
27,403
$
10,032
F-6
Table of Contents
1.
Organization
2.
Summary of
Significant Accounting Policies
F-7
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
Five Months Ended
December 31, 2008
(In thousands)
$
46,460
24,391
18,212
89,063
35,001
15,409
11,765
9,463
71,638
F-8
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
Five Months Ended
December 31, 2008
(In thousands)
17,425
255
(1
)
17,679
7,424
10,255
(11,153
)
$
(898
)
$
(0.07
)
$
(0.07
)
12,028
12,028
Five Months Ended
December 31, 2008
(In thousands)
$
5,999
(2,452
)
(26,140
)
$
(22,593
)
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
F-10
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
F-11
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
3 4 years
3 years
2 years
Shorter of the useful life or the lease term
F-12
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
F-13
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
F-14
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
F-15
Table of Contents
2.
Summary of
Significant Accounting Policies (Continued)
3.
Accounts
Receivable
July 31,
December 31,
2008
2009
2009
$
9,231
$
10,165
$
12,072
(5,277
)
(6,448
)
(7,460
)
3,954
3,717
4,612
558
1,143
647
(248
)
(114
)
(110
)
310
1,029
537
8,989
14,870
22,123
2,417
827
1,708
598
$
14,080
$
21,324
$
30,287
July 31,
December 31,
2007
2008
2009
2009
$
2,104
$
2,718
$
5,277
$
6,448
6,519
13,652
20,187
10,255
1,390
2,483
2,361
963
(7,295
)
(13,576
)
(21,377
)
(10,206
)
$
2,718
$
5,277
$
6,448
$
7,460
F-16
Table of Contents
3.
Accounts
Receivable (Continued)
4.
Property and
Equipment
July 31,
December 31,
2008
2009
2009
$
6,296
$
7,812
$
10,180
2,062
2,879
3,802
9,470
13,078
15,114
882
1,097
1,277
18,710
24,866
30,373
(11,614
)
(16,187
)
(18,400
)
$
7,096
$
8,679
$
11,973
5.
Related Party
Transactions
F-17
Table of Contents
5.
Related Party
Transactions (Continued)
6.
Income
Taxes
Five Months Ended
Year Ended July 31,
December 31,
2007
2008
2009
2009
$
(629
)
$
9,611
$
22,645
$
4,389
(82
)
2,610
5,988
1,845
(711
)
12,221
28,633
6,234
(2,121
)
74
(1,662
)
3,114
(514
)
(34
)
(69
)
416
(2,635
)
40
(1,731
)
3,530
$
(3,346
)
$
12,261
$
26,902
$
9,764
Five Months Ended
Year Ended July 31,
December 31,
2007
2008
2009
2009
35.0
%
35.0
%
35.0
%
35.0
%
6.1
5.7
6.1
6.7
(288.9
)
(9.4
)
0.7
0.9
(257.2
)%
41.4
%
42.0
%
41.7
%
F-18
Table of Contents
6.
Income Taxes
(Continued)
July 31,
December 31,
2008
2009
2009
$
3,102
$
2,827
$
3,280
696
1,898
479
600
1,002
1,454
648
956
874
5,046
6,683
6,087
(975
)
(2,019
)
(2,423
)
(1,572
)
(364
)
(2,697
)
(77
)
(147
)
(487
)
(2,624
)
(2,530
)
(5,607
)
$
2,422
$
4,153
$
480
July 31,
December 31,
2008
2009
2009
$
4,446
$
5,681
$
4,634
(2,024
)
(1,528
)
(4,154
)
$
2,422
$
4,153
$
480
F-19
Table of Contents
6.
Income Taxes
(Continued)
7.
Borrowing
Agreements
8.
Fair Values of
Financial Instruments
9.
Concentrations of
Credit Risk
10.
Redeemable
Convertible Preferred Stock and Stockholders Equity
(Deficit)
F-20
Table of Contents
10.
Redeemable
Convertible Preferred Stock and Stockholders Equity
(Deficit) (Continued)
Proceeds Net of
Number of Shares
Liquidation
Issuance
Authorized
Outstanding
Amount
Costs
6,520
6,481
$
1,953
$
1,899
3,197
3,177
2,186
2,008
10,114
9,939
8,230
8,136
4,541
4,240
5,976
5,976
24,372
23,837
$
18,345
$
18,019
F-21
Table of Contents
10.
Redeemable
Convertible Preferred Stock and Stockholders Equity
(Deficit) (Continued)
Proceeds Net of
Number of Shares
Liquidation
Issuance
Authorized
Outstanding
Amount
Costs
6,520
6,404
$
1,930
$
1,877
3,197
3,177
2,186
2,008
10,114
9,939
8,230
8,136
4,541
4,240
5,976
5,976
1,182
1,182
13,000
12,979
25,554
24,942
$
31,322
$
30,976
Proceeds Net of
Number of Shares
Liquidation
Issuance
Authorized
Outstanding
Amount
Costs
6,520
6,404
$
1,930
$
1,877
3,197
3,177
2,186
2,008
10,114
9,939
8,230
8,136
4,541
4,240
5,976
5,976
1,182
1,182
13,000
12,979
25,554
24,942
$
31,322
$
30,976
F-22
Table of Contents
10.
Redeemable
Convertible Preferred Stock and Stockholders Equity
(Deficit) (Continued)
F-23
Table of Contents
10.
Redeemable
Convertible Preferred Stock and Stockholders Equity
(Deficit) (Continued)
F-24
Table of Contents
11.
Stock-Based
Compensation
Five Months
Ended
Year Ended July 31,
December 31,
2007
2008
2009
2009
4.52
%
2.98
%
2.26
%
2.56
%
6.08
6.08
6.08
6.08
54.3
%
54.3
%
53.2
%
46.9
%
F-25
Table of Contents
11.
Stock-Based
Compensation (Continued)
Per Share
Grant Date
Estimated
Number of
Per Share Fair
Weighted
Shares Subject
Per Share
Value of Our
Average Fair
to Options
Exercise Price
Common
Value of
Granted
of Options
Stock
Options
50,000
$
10.84
$
10.84
$
5.83
85,800
15.65
15.65
8.80
127,500
17.19
17.19
9.50
1,261,750
20.01
20.01
9.47
F-26
Table of Contents
11.
Stock-Based
Compensation (Continued)
Number
Weighted-Average
Aggregate
of Shares
Exercise Price
Intrinsic Value
5,164
$
1.00
410
4.36
(444
)
1.7
(264
)
1.04
4,866
1.22
1,914
4.64
(163
)
2.81
(1,822
)
0.63
4,795
2.76
812
11.32
(664
)
4.24
(35
)
3.21
4,908
3.88
1,389
19.75
(48
)
10.15
(562
)
1.68
5,687
$
7.98
$
68,408
5,552
$
7.79
$
67,845
3,016
$
2.96
$
51,445
F-27
Table of Contents
11.
Stock-Based
Compensation (Continued)
Options Outstanding
Options Currently Exercisable
Weighted-Average
Weighted-
Weighted-Average
Weighted-
Remaining
Average
Number
Remaining
Average
Number
Contractual
Exercise
Currently
Contractual
Exercise
Outstanding
Life (in Years)
Price
Exercisable
Life (in Years)
Price
462,163
2.9
$ 0.56
462,163
2.9
$
0.56
1,436,762
5.4
1.69
1,383,780
5.4
1.65
2,315,146
8.3
6.12
1,170,484
8.2
5.44
211,500
9.5
15.56
1,261,750
9.9
20.01
5,687,321
3,016,427
12.
Earnings per
Common Share
F-28
Table of Contents
12.
Earnings per
Common Share (Continued)
Year Ended July 31,
Five Months Ended
2007
2008
2009
December 31, 2009
$
4,647
$
17,335
$
37,163
$
13,663
(3,635
)
(4,480
)
(1,956
)
(1,522
)
(9,634
)
(9,170
)
(17,410
)
(9,170
)
(510
)
3,685
8,163
4,493
11,100
10,757
12,036
12,222
$
(0.05
)
$
0.34
$
0.68
$
0.37
$
(510
)
$
3,685
$
8,163
$
4,493
11,100
10,757
12,036
12,222
2,747
2,978
2,941
650
698
262
11,100
14,154
15,712
15,425
$
(0.05
)
$
0.26
$
0.52
$
0.29
F-29
Table of Contents
12.
Earnings per
Common Share (Continued)
Year Ended July 31,
Five Months Ended
2007
2008
2009
December 31, 2009
3,307
392
97
223
25,707
26,763
25,674
24,942
29,014
27,155
25,771
25,165
Year Ended
Five Months Ended
July 31, 2009
December 31, 2009
(Unaudited)
$
8,163
$
4,493
1,956
9,634
17,410
9,170
$
37,163
$
13,663
12,036
12,222
24,942
24,942
36,978
37,164
$
1.01
$
0.37
$
8,163
$
4,493
1,956
9,634
17,410
9,170
$
37,163
$
13,663
12,036
12,222
2,978
2,941
698
262
24,942
24,942
40,654
40,367
$
0.91
$
0.34
F-30
Table of Contents
12.
Earnings per
Common Share (Continued)
13.
401(k)
Plan
14.
Commitments and
Contingencies
$
1,780
1,580
1,111
36
$
4,507
$
20,353
17,499
2,760
$
40,612
F-31
Table of Contents
14.
Commitments and
Contingencies (Continued)
15.
Significant
Customer Concentrations
F-32
Table of Contents
15.
Significant
Customer Concentrations (Continued)
16.
Subsequent
Events
F-33
Table of Contents
16.
Subsequent Events
(Continued)
F-34
Table of Contents
J.P.
Morgan
Morgan Stanley
Piper Jaffray
UBS Investment Bank
Table of Contents
ITEM 13.
Other Expenses
of Issuance and Distribution.
$
10,695
15,500
*
*
*
*
*
*
*
*
$
*
*
To be provided by amendment.
ITEM 14.
Indemnification
of Directors and Officers.
for any breach of the directors duty of loyalty to the
Registrant or its stockholders;
for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
under Section 174 of the Delaware General Corporation Law
(regarding unlawful dividends and stock purchases); or
for any transaction from which the director derived an improper
personal benefit.
the Registrant is required to indemnify its directors and
officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to very limited exceptions;
the Registrant may indemnify its other employees and agents as
set forth in the Delaware General Corporation Law;
the Registrant is required to advance expenses, as incurred, to
its directors and officers in connection with a legal proceeding
to the fullest extent permitted by the Delaware General
Corporation Law, subject to very limited exceptions; and
the rights conferred in the bylaws are not exclusive.
II-1
Table of Contents
1
.01
3
.02
3
.04
4
.01
10
.01
ITEM 15.
Recent Sales
of Unregistered Securities.
II-2
Table of Contents
ITEM 16.
Exhibits and
Financial Statement Schedules.
Exhibit
1
.01*
Form of Underwriting Agreement.
3
.01
Ninth Amended and Restated Certificate of Incorporation of the
Registrant.
3
.02
Form of Tenth Amended and Restated Certificate of Incorporation
of the Registrant, to be effective upon the consummation of this
offering.
3
.03
Second Amended and Restated Bylaws of the Registrant, as amended.
3
.04
Form of Amended and Restated Bylaws of the Registrant, to be
effective upon the consummation of this offering.
4
.01
Eighth Amended and Restated Registration Rights Agreement by and
among the Registrant, the preferred stockholders and certain
warrant holders of the Registrant.
5
.01*
Opinion of Fenwick & West LLP regarding the legality
of the securities being registered.
10
.01
Form of Indemnity Agreement.
10
.02
Second Amended and Restated 2001 Stock Plan and form of option
grant.
10
.03*
2010 Equity Incentive Plan and form of option grant.
10
.04**
Lease Agreement between Registrant and Foothill Technology
Center, dated July 8, 2005, as amended on August 21,
2008 and July 30, 2009.
10
.05**
Prepaid Card Program Agreement, dated as of October 20,
2006, by and among the Registrant, Wal-Mart Stores, Inc.,
Wal-Mart Stores Texas, L.P., Wal-Mart Louisiana, LLC, Wal-Mart
Stores East, Inc., Wal-Mart Stores, L.P. and GE Money Bank, as
amended.
10
.06**
Card Program Services Agreement, dated as of October 27,
2006, by and between the Registrant and GE Money Bank, as
amended.
10
.07**
Program Agreement, dated as of November 1, 2009, by and
between the Registrant and Columbus Bank and Trust Company.
10
.08**
Agreement for Services, dated as of September 1, 2009, by
and between the Registrant and Total System Services, Inc.
10
.09**
Master Services Agreement, dated as of May 28, 2009, by and
between the Registrant and Genpact International, Inc.
10
.10
Sixth Amended and Restated Loan and Line of Credit Agreement
between Columbus Bank and Trust Company and Registrant,
dated March 24, 2010.
10
.11**
Offer letter to William D. Sowell from the Registrant, dated
January 28, 2009.
10
.12
Form of Executive Severance Agreement.
10
.13**
FY2009 Management Cash Incentive Compensation Plan.
10
.14
Description of FY2010 Management Cash Incentive Compensation
Plan.
II-3
Table of Contents
Exhibit
10
.15**
Warrant to purchase shares of common stock of the Registrant.
10
.16**
Preferred Stock Warrant to purchase shares of
Series C-1
preferred stock of the Registrant.
23
.01*
Consent of Fenwick & West LLP (included in
Exhibit 5.01).
23
.02
Consent of Ernst & Young LLP, independent registered
public accounting firm.
24
.01**
Power of Attorney.
*
To be filed by amendment.
**
Previously filed.
Registrant has omitted portions of the referenced exhibit and
filed such exhibit separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment
under Rule 406 promulgated under the Securities Act.
(b)
Financial
Statement Schedules.
ITEM 17.
Undertakings.
II-4
Table of Contents
By:
Principal Executive Officer:
Chairman, President and
Chief Executive Officer
April 26, 2010
Principal Financial Officer:
Chief Financial Officer
April 26, 2010
Principal Accounting Officer:
Chief Accounting Officer
April 26, 2010
Additional Directors:
*
Director
April 26, 2010
*
Director
April 26, 2010
*
Director
April 26, 2010
*
Director
April 26, 2010
*
Director
April 26, 2010
*
Director
April 26, 2010
* By:
Attorney-in-Fact
II-5
Table of Contents
Exhibit
1
.01*
Form of Underwriting Agreement.
3
.01
Ninth Amended and Restated Certificate of Incorporation of the
Registrant.
3
.02
Form of Tenth Amended and Restated Certificate of Incorporation
of the Registrant, to be effective upon the consummation of this
offering.
3
.03
Second Amended and Restated Bylaws of the Registrant, as amended.
3
.04
Form of Amended and Restated Bylaws of the Registrant, to be
effective upon the consummation of this offering.
4
.01
Eighth Amended and Restated Registration Rights Agreement by and
among the Registrant, the preferred stockholders and certain
warrant holders of the Registrant.
5
.01*
Opinion of Fenwick & West LLP regarding the legality
of the securities being registered.
10
.01
Form of Indemnity Agreement.
10
.02
Second Amended and Restated 2001 Stock Plan and form of option
grant.
10
.03*
2010 Equity Incentive Plan and form of option grant.
10
.04**
Lease Agreement between Registrant and Foothill Technology
Center, dated July 8, 2005, as amended on August 21,
2008 and July 30, 2009.
10
.05**
Prepaid Card Program Agreement, dated as of October 20,
2006, by and among the Registrant, Wal-Mart Stores, Inc.,
Wal-Mart Stores Texas, L.P., Wal-Mart Louisiana, LLC, Wal-Mart
Stores East, Inc., Wal-Mart Stores, L.P. and GE Money Bank, as
amended.
10
.06**
Card Program Services Agreement, dated as of October 27,
2006, by and between the Registrant and GE Money Bank, as
amended.
10
.07**
Program Agreement, dated as of November 1, 2009, by and
between the Registrant and Columbus Bank and Trust Company.
10
.08**
Agreement for Services, dated as of September 1, 2009, by
and between the Registrant and Total System Services, Inc.
10
.09**
Master Services Agreement, dated as of May 28, 2009, by and
between the Registrant and Genpact International, Inc.
10
.10
Sixth Amended and Restated Loan and Line of Credit Agreement
between Columbus Bank and Trust Company and Registrant,
dated March 24, 2010.
10
.11**
Offer letter to William D. Sowell from the Registrant, dated
January 28, 2009.
10
.12
Form of Executive Severance Agreement.
10
.13**
FY2009 Management Cash Incentive Compensation Plan.
10
.14
Description of FY2010 Management Cash Incentive Compensation
Plan.
10
.15**
Warrant to purchase shares of common stock of the Registrant.
10
.16**
Preferred Stock Warrant to purchase shares of
Series C-1
preferred stock of the Registrant.
23
.01*
Consent of Fenwick & West LLP (included in
Exhibit 5.01).
23
.02
Consent of Ernst & Young LLP, independent registered
public accounting firm.
24
.01**
Power of Attorney.
*
To be filed by amendment.
**
Previously filed.
Registrant has omitted portions of the referenced exhibit and
filed such exhibit separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment
under Rule 406 promulgated under the Securities Act.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
GREEN DOT CORPORATION | ||||
|
||||
|
By: | /s/ Steven W. Streit | ||
|
||||
|
Steven W. Streit | |||
|
Its: | President and Chief Executive Officer |
24
Dated: |
Green Dot Corporation
|
|||
By: | ||||
Name: | Steve Streit | |||
Title: | President and Chief Executive Officer |
1
2
3
4
5
6
7
8
5. | Definitions . For purposes of this Article V: |
9
10
11
12
13
14
Effective as of March 31, 2010, the Bylaws of Green Dot Corporation, duly adopted by the Board of Directors, are hereby amended as follows: | ||
1. | The first paragraph of Article VIII, Section 8.3 of the Bylaws is amended to read in its entirety as follows: |
2. | The first sentence of Article VIII, Section 8.4 of the Bylaws is hereby amended to read in its entirety as follows: |
3. | The first sentence of Article VIII, Section 8.10 of the Bylaws is hereby amended to read in its entirety as follows: |
4. | Article VIII, Section 8.11 of the Bylaws is hereby amended to read in its entirety as follows: |
PAGE(S) | ||||
ARTICLE I CORPORATE OFFICES
|
1 | |||
1.1 REGISTERED OFFICE
|
1 | |||
1.2 OTHER OFFICES
|
1 | |||
ARTICLE II MEETINGS OF STOCKHOLDERS
|
1 | |||
2.1 PLACE OF MEETINGS
|
1 | |||
2.2 ANNUAL MEETING
|
1 | |||
2.3 SPECIAL MEETING
|
1 | |||
2.4 NOTICE OF STOCKHOLDERS MEETINGS
|
2 | |||
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
|
2 | |||
2.6 QUORUM
|
2 | |||
2.7 ADJOURNED MEETING; NOTICE
|
2 | |||
2.8 VOTING
|
2 | |||
2.9 WAIVER OF NOTICE
|
3 | |||
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
3 | |||
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
|
3 | |||
2.12 PROXIES
|
4 | |||
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE
|
4 | |||
ARTICLE III DIRECTORS
|
4 | |||
3.1 POWERS
|
4 | |||
3.2 NUMBER OF DIRECTORS
|
5 | |||
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
|
5 | |||
3.4 RESIGNATION AND VACANCIES
|
5 | |||
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
|
6 | |||
3.6 FIRST MEETINGS
|
6 | |||
3.7 REGULAR MEETINGS
|
6 | |||
3.8 SPECIAL MEETINGS; NOTICE
|
6 | |||
3.9 QUORUM
|
6 | |||
3.10 WAIVER OF NOTICE
|
7 | |||
3.11 ADJOURNED MEETING; NOTICE
|
7 | |||
3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
7 | |||
3.13 FEES AND COMPENSATION OF DIRECTORS
|
7 | |||
3.14 APPROVAL OF LOANS TO OFFICERS
|
7 | |||
3.15 REMOVAL OF DIRECTORS
|
7 | |||
ARTICLE IV COMMITTEES
|
8 | |||
4.1 COMMITTEES OF DIRECTORS
|
8 | |||
4.2 COMMITTEE MINUTES
|
9 | |||
4.3 MEETINGS AND ACTION OF COMMITTEES
|
9 |
-i-
PAGE(S) | ||||
ARTICLE V OFFICERS
|
9 | |||
5.1 OFFICERS
|
9 | |||
5.2 ELECTION OF OFFICERS
|
9 | |||
5.3 SUBORDINATE OFFICERS
|
9 | |||
5.4 REMOVAL AND RESIGNATION OF OFFICERS
|
9 | |||
5.5 VACANCIES IN OFFICES
|
10 | |||
5.6 CHAIRMAN OF THE BOARD
|
10 | |||
5.7 PRESIDENT
|
10 | |||
5.8 VICE PRESIDENT
|
10 | |||
5.9 SECRETARY
|
10 | |||
5.10 TREASURER
|
11 | |||
5.11 ASSISTANT SECRETARY
|
11 | |||
5.12 ASSISTANT TREASURER
|
11 | |||
5.13 AUTHORITY AND DUTIES OF OFFICERS
|
11 | |||
ARTICLE VI INDEMNITY
|
11 | |||
6.1 LIMITATION OF DIRECTORS LIABILITY
|
11 | |||
6.2 PERMISSIVE INDEMNIFICATION OF CORPORATE AGENTS
|
12 | |||
6.3 MANDATORY INDEMNIFICATION OF DIRECTORS AND OFFICERS
|
12 | |||
6.4 PREPAYMENT OF EXPENSES OF DIRECTORS AND OFFICERS
|
12 | |||
6.5 CLAIMS BY DIRECTORS AND OFFICERS
|
12 | |||
6.6 NON-EXCLUSIVITY OF RIGHTS
|
13 | |||
6.7 INSURANCE
|
13 | |||
6.8 REPEAL OR MODIFICATION
|
13 | |||
ARTICLE VII RECORDS AND REPORTS
|
13 | |||
7.1 MAINTENANCE AND INSPECTION OF RECORDS
|
13 | |||
7.2 INSPECTION BY DIRECTORS
|
14 | |||
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
|
14 | |||
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
|
14 | |||
ARTICLE VIIIGENERAL MATTERS
|
14 | |||
8.1 CHECKS
|
14 | |||
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
|
14 | |||
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES
|
15 | |||
8.4 SPECIAL DESIGNATION ON CERTIFICATES
|
15 | |||
8.5 LOST CERTIFICATES
|
15 | |||
8.6 CONSTRUCTION; DEFINITIONS
|
16 | |||
8.7 DIVIDENDS
|
16 | |||
8.8 FISCAL YEAR
|
16 | |||
8.9 SEAL
|
16 | |||
8.10 TRANSFER OF STOCK
|
16 | |||
8.11 STOCK TRANSFER AGREEMENTS
|
16 | |||
8.12 REGISTERED STOCKHOLDERS
|
16 |
ii
PAGE(S) | ||||
ARTICLE IX AMENDMENTS
|
17 | |||
ARTICLE X DISSOLUTION
|
17 | |||
ARTICLE XI CUSTODIAN
|
18 | |||
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
|
18 | |||
11.2 DUTIES OF CUSTODIAN
|
18 |
iii
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3
4
5
6
7
8
9
10
11
12
13
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15
16
17
18
Page (s) | ||||||||
ARTICLE I: |
STOCKHOLDERS
|
1 | ||||||
Section 1.1: |
Annual Meetings
|
1 | ||||||
Section 1.2: |
Special Meetings
|
1 | ||||||
Section 1.3: |
Notice of Meetings
|
1 | ||||||
Section 1.4: |
Adjournments
|
1 | ||||||
Section 1.5: |
Quorum
|
2 | ||||||
Section 1.6: |
Organization
|
2 | ||||||
Section 1.7: |
Voting; Proxies
|
2 | ||||||
Section 1.8: |
Fixing Date for Determination of Stockholders of Record
|
2 | ||||||
Section 1.9: |
List of Stockholders Entitled to Vote
|
3 | ||||||
Section 1.10: |
Inspectors of Elections
|
3 | ||||||
Section 1.11: |
Notice of Stockholder Business; Nominations
|
4 | ||||||
|
||||||||
ARTICLE II: |
BOARD OF DIRECTORS
|
8 | ||||||
Section 2.1: |
Number; Qualifications
|
8 | ||||||
Section 2.2: |
Election; Vacancies
|
8 | ||||||
Section 2.3: |
Regular Meetings
|
8 | ||||||
Section 2.4: |
Special Meetings
|
8 | ||||||
Section 2.5: |
Remote Meetings Permitted
|
9 | ||||||
Section 2.6: |
Quorum; Vote Required for Action
|
9 | ||||||
Section 2.7: |
Organization
|
9 | ||||||
Section 2.8: |
Written Action by Directors
|
9 | ||||||
Section 2.9: |
Powers
|
9 | ||||||
Section 2.10: |
Compensation of Directors
|
9 | ||||||
|
||||||||
ARTICLE III: |
COMMITTEES
|
9 | ||||||
Section 3.1: |
Committees
|
9 | ||||||
Section 3.2: |
Committee Rules
|
10 | ||||||
|
||||||||
ARTICLE IV: |
OFFICERS
|
10 | ||||||
Section 4.1: |
Generally
|
10 | ||||||
Section 4.2: |
Chief Executive Officer
|
10 | ||||||
Section 4.3: |
Chairperson of the Board
|
11 | ||||||
Section 4.4: |
President
|
11 | ||||||
Section 4.5: |
Vice President
|
11 | ||||||
Section 4.6: |
Chief Financial Officer
|
11 | ||||||
Section 4.7: |
Treasurer
|
11 |
-i-
Page (s) | ||||||||
Section 4.8: |
Secretary
|
12 | ||||||
Section 4.9: |
Delegation of Authority
|
12 | ||||||
Section 4.10: |
Removal
|
12 | ||||||
|
||||||||
ARTICLE V: |
STOCK
|
12 | ||||||
Section 5.1: |
Uncertificated Shares
|
12 | ||||||
Section 5.2: |
Multiple Classes of Stock
|
12 | ||||||
Section 5.3: |
Signatures
|
13 | ||||||
Section 5.4: |
Consideration and Payment for Shares
|
13 | ||||||
Section 5.5: |
Destroyed or Wrongfully Taken Certificates
|
13 | ||||||
Section 5.6: |
Transfer of Stock
|
14 | ||||||
Section 5.7: |
Registered Stockholders
|
14 | ||||||
Section 5.8: |
Effect of the Corporations Restriction on Transfer
|
14 | ||||||
Section 5.9: |
Regulations
|
15 | ||||||
|
||||||||
ARTICLE VI: |
INDEMNIFICATION
|
15 | ||||||
Section 6.1: |
Indemnification of Officers and Directors
|
15 | ||||||
Section 6.2: |
Advance of Expenses
|
16 | ||||||
Section 6.3: |
Non-Exclusivity of Rights
|
16 | ||||||
Section 6.4: |
Indemnification Contracts
|
16 | ||||||
Section 6.5: |
Right of Indemnitee to Bring Suit
|
16 | ||||||
Section 6.6: |
Nature of Rights
|
17 | ||||||
Section 6.7: |
Insurance
|
17 | ||||||
|
||||||||
ARTICLE VII: |
NOTICES
|
17 | ||||||
Section 7.1: |
Notice.
|
17 | ||||||
Section 7.2: |
Waiver of Notice
|
18 | ||||||
|
||||||||
ARTICLE VIII: |
INTERESTED DIRECTORS
|
19 | ||||||
Section 8.1: |
Interested Directors
|
19 | ||||||
Section 8.2: |
Quorum
|
19 | ||||||
|
||||||||
ARTICLE IX: |
MISCELLANEOUS
|
19 | ||||||
Section 9.1: |
Fiscal Year
|
19 | ||||||
Section 9.2: |
Seal
|
19 | ||||||
Section 9.3: |
Form of Records
|
19 | ||||||
Section 9.4: |
Reliance upon Books and Records
|
19 | ||||||
Section 9.5: |
Certificate of Incorporation Governs
|
20 | ||||||
Section 9.6: |
Severability
|
20 | ||||||
Section 9.7: |
Time Periods
|
20 | ||||||
|
||||||||
ARTICLE X: |
AMENDMENT
|
20 |
-ii-
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Dated: |
|
|||
John Ricci, Secretary | ||||
21
2
3
4
5
6
7
8
9
10
If to a Holder, to:
|
The name and address set forth on Schedule 1 hereto. | |
|
||
If to the Company:
|
Green Dot Corporation | |
|
605 E. Huntington Drive, Suite 205 | |
|
Monrovia, California 91016 | |
|
Attention: Chief Executive Officer and General Counsel | |
|
Facsimile: (626) 775-3704 | |
|
||
with a copy to:
|
Fenwick & West LLP | |
|
801 California Street | |
|
Mountain View, CA 94041 | |
|
Attention: Gordon Davidson | |
|
Andrew Luh
|
|
|
Facsimile: (650) 938-5200 |
11
12
THE COMPANY | ||||
|
||||
GREEN DOT CORPORATION | ||||
|
||||
|
By: | /s/ Steve Streit | ||
|
||||
|
Steve Streit, President |
HOLDER | ||||
|
||||
TCV VII, L.P. | ||||
a Cayman Islands exempted limited partnership, | ||||
acting by its general partner | ||||
|
||||
Technology Crossover Management VII, L.P. | ||||
a Cayman Islands exempted limited partnership, | ||||
acting by its general partner | ||||
|
||||
Technology Crossover Management VII, Ltd. | ||||
a Cayman Islands exempted company | ||||
|
||||
|
By: | /s/ F. Fenton | ||
|
||||
|
Name: | |||
|
Title: Authorized Signatory | |||
|
||||
TCV VII (A), L.P. | ||||
a Cayman Islands exempted limited partnership, | ||||
acting by its general partner | ||||
|
||||
Technology Crossover Management VII, L.P. | ||||
a Cayman Islands exempted limited partnership, | ||||
acting by its general partner | ||||
|
||||
Technology Crossover Management VII, Ltd. | ||||
a Cayman Islands exempted company | ||||
|
||||
|
By: | /s/ F. Fenton | ||
|
||||
|
Name: | |||
|
Title: Authorized Signatory | |||
|
||||
TCV Member Fund, L.P. | ||||
a Cayman Islands exempted limited partnership, | ||||
acting by its general partner | ||||
|
||||
Technology Crossover Management VII, Ltd. | ||||
a Cayman Islands exempted company | ||||
|
||||
|
By: | /s/ F. Fenton | ||
|
||||
|
Name: | |||
|
Title: Authorized Signatory |
|
By: | SCFF Management, LLC | ||||
|
A Delaware Limited Liability Company | |||||
|
General Partner of Each | |||||
|
||||||
|
/s/ Michael Moritz | |||||
Michael Moritz, Managing Member |
|
By: |
SCIX.1 Management, LLC
A Delaware Limited Liability Company General Partner of Each |
||
|
||||
|
/s/ Michael Moritz | |||
Michael Moritz, Managing Member |
|
By: | SCGF IV Management, L.P. | ||
|
A Cayman Islands exempted limited | |||
|
partnership | |||
Its General Partner | ||||
|
||||
|
By: |
SCGF GenPar, Ltd
A Cayman Islands limited liability company Its General Partner |
||
|
||||
|
By: | /s/ Michael Moritz | ||
|
||||
|
Managing Director |
By: | /s/ Donald B. Wiener | |||||
|
||||||
|
Donald B. Wiener, Vice President |
YKA PARTNERS LTD.
|
||||
By: | /s/ Kenneth Aldrich | |||
Kenneth Aldrich | ||||
General Partner | ||||
DAVID WILLIAM HANNA
TRUST DATED
OCTOBER 30, 1989 |
||||||
|
||||||
By: | /s/ David W. Hanna | |||||
|
||||||
|
David W. Hanna |
HOLDER | ||||
|
||||
TENAYA CAPITAL V, L.P. | ||||
by: Tenaya Capital V GP, L.P., its General Partner | ||||
By: Tenaya Capital V GP, LLC, its General Partner | ||||
|
By: | /s/ Thomas E. Banahan | ||
|
||||
|
Name: | Thomas E. Banahan | ||
|
||||
|
Title: | Managing Director | ||
|
||||
|
||||
TENAYA CAPITAL V-P, L.P. | ||||
By: Tenaya Capital V GP, L.P., its General Partner | ||||
By: Tenaya Capital V GP, LLC, its General Partner | ||||
|
By: | /s/ Thomas E. Banahan | ||
|
||||
|
Name: | Thomas E. Banahan | ||
|
||||
|
Title: | Managing Director | ||
|
TTP FUND, LP | ||||||
|
||||||
By: | Total Technology Partners, LLC | |||||
Its: | General Partner | |||||
|
||||||
|
By: | /s/ Gardiner W. Garrard, III | ||||
|
||||||
|
Gardiner W. Garrard III, | |||||
|
Managing Partner |
-2-
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-8-
-9-
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GREEN DOT CORPORATION
|
||||
By: | ||||
Its: | ||||
INDEMNITEE:
|
||||
Address: | ||||
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SECTION 1. Establishment And Purpose
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SECTION 2. Administration
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(a) Committees of the Board of Directors
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(b) Authority of the Board of Directors
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SECTION 3. Eligibility
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(a) General Rule
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(b) Ten-Percent Stockholders
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SECTION 4. Stock Subject To Plan
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(a) Basic Limitation
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(b) Additional Shares
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SECTION 5. Terms And Conditions Of Awards Or Sales
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(a) Stock Purchase Agreement
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(b) Duration of Offers and Nontransferability of Rights
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(c) Purchase Price
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(d) Withholding Taxes
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(e) Restrictions on Transfer of Shares and Minimum Vesting
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(f) Accelerated Vesting
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SECTION 6. Terms And Conditions Of Options
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(a) Stock Option Agreement
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(b) Number of Shares
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(c) Exercise Price
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(d) Withholding Taxes
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(e) Exercisability
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(f) Accelerated Exercisability
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(g) Basic Term
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(h) Nontransferability
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(i) Termination of Service (Except by Death)
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(j) Leaves of Absence
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(k) Death of Optionee
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(l) No Rights as a Stockholder
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(m) Modification, Extension and Assumption of Options
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(n) Restrictions on Transfer of Shares and Minimum Vesting
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SECTION 7. Payment For Shares
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(a) General Rule
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(b) Surrender of Stock
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(c) Services Rendered
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(d) Promissory Note
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(e) Exercise/Sale
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(f) Exercise/Pledge
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SECTION 8. Adjustment Of Shares
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(a) General
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(b) Mergers and Consolidations
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(c) Reservation of Rights
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SECTION 9. Securities Law Requirements
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SECTION 10. No Retention Rights
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SECTION 11. Duration and Amendments
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(a) Term of the Plan
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(b) Right to Amend or Terminate the Plan
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(c) Effect of Amendment or Termination
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SECTION 12. Definitions
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SECTION 13. Execution
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(a) | Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist of two or more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function. |
(b) | Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee. |
(a) | General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Options or the direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs. |
(b) | Ten-Percent Stockholders. In the case of an ISO, with respect to an individual who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries the Exercise Price of such ISO shall be at least 110% of the Fair Market Value of a Share on the date of grant and such ISO shall not be exercisable after the expiration of five years from the date of grant. For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied. |
(a) | Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares. The aggregate number of Shares that may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall not exceed 11,208,384 Shares, subject to adjustment pursuant to Section 8. The number of Shares that are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. |
(b) | Additional Shares. In the event that any outstanding Option or other right for any reason expires or is canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option or other right shall again be available for the purposes of the Plan. In the event that Shares issued under the Plan are reacquired by the Company pursuant to any forfeiture provision, right of repurchase or right of first refusal, such Shares shall again be available for the purposes of the Plan, except that the aggregate number of Shares which may be issued pursuant to Options intended to be ISOs shall in no event exceed 11,208,384 Shares (subject to adjustment pursuant to Section 8). |
(a) | Stock Purchase Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement. The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical. |
(b) | Duration of Offers and Nontransferability of Rights. Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company. Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted. |
(c) | Purchase Price. The Purchase Price of Shares to be offered under the Plan shall be determined by the Board of Directors at its sole discretion. The Purchase Price shall be payable in a form described in Section 7. |
(d) | Withholding Taxes. As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase. |
(e) | Restrictions on Transfer of Shares and Minimum Vesting. Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. In addition, the applicable Stock Purchase Agreement may provide the Company an additional right to repurchase the Purchasers Shares at a purchase price not less than the Fair Market Value of the Shares on the date Purchasers Service terminates, and such right of repurchase shall terminate when the Companys securities become publicly traded. Any such rights of repurchase may be exercised only within 90 days after the termination of the Purchasers Service for cash or for cancellation of indebtedness incurred in purchasing the Shares. |
(f) | Accelerated Vesting. Unless the applicable Stock Purchase Agreement provides otherwise, any right to repurchase a Purchasers Shares at the original Purchase Price (if any) upon termination of the Purchasers Service shall lapse and all of such Shares shall become vested if: |
(i) | The Company is subject to a Change in Control before the Purchasers Service terminates; and | ||
(ii) | Either (A) the repurchase right is not assigned to the entity that employs the Purchaser immediately after the Change in Control or to its parent or subsidiary or (B) the Purchaser is subject to an Involuntary Termination within 6 months following such Change in Control. |
(a) | Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. | |
(b) | Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option. | |
(c) | Exercise Price . Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and a higher percentage may be required by Section 3(b). The Exercise Price of a Nonstatutory Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant. Subject to the preceding two sentences, the |
Exercise Price under any Option shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7. |
(d) | Withholding Taxes . As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. | |
(e) | Exercisability . Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The exercisability provisions of any Stock Option Agreement shall be determined by the Board of Directors at its sole discretion, and unless otherwise determined by the Board of Directors, no Option shall be exercisable during the first six months following the date of the option grant. | |
(f) | Accelerated Exercisability. Unless the applicable Stock Option Agreement provides otherwise (including additional accelerating vesting provisions), all of an Optionees Options shall become exercisable in full if: |
(i) | The Company is subject to a Change in Control before the Optionees Service terminates; and | ||
(ii) | Either (A) such Options do not remain outstanding, such Options are not assumed by the surviving corporation or its parent, and the surviving corporation or its parent does not substitute options with substantially the same terms for such Options or (B) the Optionee is subject to an Involuntary Termination within 6 months following such Change in Control. |
(g) | Basic Term. The Stock Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the date of grant, and a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire. |
(h) | Nontransferability. No Option shall be transferable by the Optionee other than by beneficiary designation, will or the laws of descent and distribution. An Option may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionees guardian or legal representative. No Option or interest therein may be transferred, assigned, pledged or hypothecated by the Optionee during the Optionees lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process. |
(i) | Termination of Service (Except by Death). Unless the applicable Stock Option Agreement provides for a longer period of time, if an Optionees Service terminates for any reason other than the Optionees death, then the Optionees Options shall expire on the earliest of the following occasions: |
(i) | The expiration date determined pursuant to Subsection (g) above; | ||
(ii) | The date three months after the termination of the Optionees Service for any reason other than Disability, or such later date as the Board of Directors may determine; | ||
(iii) | The date six months after the termination of the Optionees Service by reason of Disability, or such later date as the Board of Directors may determine; or | ||
(iv) | The date of the termination of the Optionees Service for Cause, or such later date as the Board of Directors may determine. |
The Optionee may exercise all or part of the Optionees Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionees Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionees Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionees Service terminates. In the event that the Optionee dies after the termination of the Optionees Service but before the expiration of the Optionees Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionees estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionees Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionees Service terminated (or vested as a result of the termination). |
(j) | Leaves of Absence . For purposes of Subsection (i) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). |
(k) | Death of Optionee . If an Optionee dies while the Optionee is in Service, unless the applicable Stock Option Agreement provides for a longer period of time, then the Optionees Options shall expire on the earlier of the following dates: |
(i) | The expiration date determined pursuant to Subsection(g) above; or | ||
(ii) | The date 12 months after the Optionees death. |
All or part of the Optionees Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionees estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that |
such Options had become exercisable before the Optionees death or became exercisable as a result of the death. The balance of such Options shall lapse when the Optionee dies. |
(l) | No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionees Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. | |
(m) | Modification, Extension and Assumption of Options . Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionees rights or increase the Optionees obligations under such Option. | |
(n) | Restrictions on Transfer of Shares and Minimum Vesting . Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. |
(a) | General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7. | |
(b) | Surrender of Stock. To the extent that a Stock Option Agreement so provides, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date when the Option is exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. | |
(c) | Services Rendered. At the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award. | |
(d) | Promissory Note. To the extent that a Stock Option Agreement or Stock Purchase Agreement so provides, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares issued under the Plan, other than the par value of such Shares, which must be paid in cash or cash equivalents, may be paid with a full-recourse |
promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note. |
(e) | Exercise/Sale . To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. | |
(f) | Exercise/Pledge . To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. |
(a) | General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option. |
(b) | Mergers and Consolidations. In the event that the Company is a party to a merger or consolidation, outstanding Options shall be subject to the agreement of merger or consolidation. Such agreement, without the Optionees consent, may provide for: |
(i) | The continuation of such outstanding Options by the Company (if the Company is the surviving corporation); | ||
(ii) | The assumption of the Plan and such outstanding Options by the surviving corporation or its parent; | ||
(iii) | The substitution by the surviving corporation or its parent of options with substantially the same terms for such outstanding Options; | ||
(iv) | The cancellation of each outstanding Option after payment to the Optionee of an amount in cash or cash equivalents equal to (a) the Fair Market Value of the |
Shares subject to such Option at the time of the merger or consolidation minus (b) the Exercise Price of the Shares subject to such Option; or |
(v) | The cancellation of such outstanding Option without payment of any consideration. |
(c) | Reservation of Rights. Except as provided in this Section 8, an Optionee or Purchaser shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. |
(a) | Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Companys stockholders. In the event that the stockholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, any grants of Options or sales or awards of Shares that have already occurred shall be rescinded, and no additional grants, sales or awards shall be made thereafter under the Plan. The Plan shall terminate automatically 10 years after its adoption by the Board of Directors and may be terminated on any earlier date pursuant to Subsection (b) below. |
(b) | Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan which increases the number of Shares available for issuance under the Plan (except as provided in Section 8), or which materially changes the class of persons who are eligible for the grant of ISOs, shall be subject to the approval of the Companys stockholders. Stockholder approval shall not be required for any other amendment of the Plan. | |
(c) | Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan. |
(a) | Board of Directors shall mean the Board of Directors of the Company, as constituted from time to time. | |
(b) | Cause shall mean (i) the unauthorized use or disclosure of the confidential information or trade secrets of the Company, which use or disclosure causes material harm to the Company, (ii) conviction of, or a plea of guilty or no contest to, a felony under the laws of the United States or any state thereof, (iii) gross negligence or (iv) continued failure to perform assigned duties after receiving written notification from the Board of Directors. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions that the Company (or a Parent or Subsidiary) may consider as grounds for the discharge of an Optionee or Purchaser. | |
(c) | Change in Control shall mean the sale, conveyance, disposal, or encumbrance of all or substantially all of the Companys property or business or the Companys merger into or consolidation with any other corporation where the stockholders of the Company immediately prior to such merger or consolidation own less than fifty percent (50%) of such corporation, directly or indirectly, after such merger or consolidation or if the Company effects any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is transferred. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Companys incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction. | |
(d) | Code shall mean the Internal Revenue Code of 1986, as amended. | |
(e) | Committee shall mean a committee of the Board of Directors, as described in Section 2(a). | |
(f) | Company shall mean Green Dot Corporation, a Delaware corporation. |
(g) | Consultant shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors. | |
(h) | Disability shall mean that the Optionee or Purchaser is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. | |
(i) | Employee shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. | |
(j) | Exercise Price shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement. | |
(k) | Fair Market Value shall mean the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all persons. Notwithstanding the foregoing, Fair Market Value shall at all times be determined in accordance with the requirements of Section 409A of the Code and the regulations and guidance issued thereunder. | |
(l) | Involuntary Termination shall mean the termination of the Optionees or Purchasers Service by reason of: |
(i) | The involuntary discharge of the Optionee or Purchaser by the Company (or the Parent or Subsidiary employing him or her) for reasons other than Cause; or | ||
(ii) | The voluntary resignation of the Optionee or Purchaser following (A) a change in his or her position with the Company (or the Parent or Subsidiary employing him or her) that materially reduces his or her level of authority or responsibility or (B) a reduction in his or her compensation (including base salary, fringe benefits and participation in bonus or incentive programs based on corporate performance) by more than 10%. |
(m) | ISO shall mean an employee incentive stock option described in Section 422(b) of the Code. | |
(n) | Nonstatutory Option shall mean a stock option not described in Sections 422(b) or 423(b) of the Code. | |
(o) | Option shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. | |
(p) | Optionee shall mean an individual who holds an Option. |
(q) | Outside Director shall mean a member of the Board of Directors who is not an Employee. | |
(r) | Parent shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. | |
(s) | Plan shall mean this Green Dot Corporation First Amended and Restated 2001 Stock Plan. | |
(t) | Purchase Price shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors. | |
(u) | Purchaser shall mean an individual to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than upon exercise of an Option). | |
(v) | Retirement shall mean that the Optionee or Purchaser has given up his or her employment in the Company. | |
(w) | Service shall mean service as an Employee, Outside Director or Consultant. | |
(x) | Share shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable). | |
(y) | Stock shall mean the Class B Common Stock of the Company. | |
(z) | Stock Option Agreement shall mean the agreement between the Company and an Optionee which contains the terms, conditions and restrictions pertaining to the Optionees Option. | |
(aa) | Stock Purchase Agreement shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan which contains the terms, conditions and restrictions pertaining to the acquisition of such Shares. | |
(bb) | Subsidiary means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. |
/s/ Steve Streit | |
By: Steve Streit | |
Its: President |
(a) | Option . On the terms and conditions set forth in the Notice of Stock Option Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant. The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of Grant (110% of Fair Market Value if Section 3(b) of the Plan applies). This option is intended to be an ISO or a Nonstatutory Option, as provided in the Notice of Stock Option Grant. | |
(b) | Stock Plan and Defined Terms. This option is granted pursuant to the Plan, a copy of which the Optionee acknowledges having received. The provisions of the Plan are incorporated into this Agreement by this reference. Capitalized terms are defined in Section 13 of this Agreement. |
(a) | Exercisability. Subject to Subsection (b) below and the other conditions set forth in this Agreement, all or part of this option may be exercised prior to its expiration at the time or times set forth in the Notice of Stock Option Grant. This option shall become exercisable in full if (i) the Company is subject to a Change in Control before the Optionees Service terminates, and either (A) such Options do not remain outstanding, such Options are not assumed by the surviving corporation or its parent, and the surviving corporation or its parent does not substitute options with substantially the same terms for such Options or (B) the Optionee is subject to an Involuntary Termination within 6 months following such Change in Control. |
(b) | Stockholder Approval. Any other provision of this Agreement notwithstanding, no portion of this option shall be exercisable at any time prior to the approval of the Plan by the Companys stockholders. |
(a) | Notice of Exercise. The Optionee or the Optionees representative may exercise this option by giving written notice to the Company pursuant to Section 12(d). The notice shall specify the election to exercise this option, the number of Shares for which it is being exercised and the form of payment. The notice shall be signed by the person exercising this option. In the event that this option is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory to the Company) of the representatives right to exercise this option. The Optionee or the Optionees representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 5 for the full amount of the Purchase Price. | |
(b) | Issuance of Shares. After receiving a proper notice of exercise, the Company shall cause to be issued a certificate or certificates for the Shares as to which this option has been exercised, registered in the name of the person exercising this option (or in the names of such person and his or her spouse as community property or as joint tenants with right of survivorship). The Company shall cause such certificate or certificates to be deposited in escrow or delivered to or upon the order of the person exercising this option. | |
(c) | Withholding Taxes. In the event that the Company determines that it is required to withhold any tax as a result of the exercise of this option, the Optionee, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements. The Optionee shall also make arrangements satisfactory to the Company to enable it to satisfy any withholding requirements that may arise in connection with the vesting or disposition of Shares purchased by exercising this option. |
(a) | Cash. All or part of the Purchase Price may be paid in cash or cash equivalents. | |
(b) | Surrender of Stock. With the consent of the Board of Directors, all or any part of the Purchase Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date when this option is exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Purchase Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to this option for financial reporting purposes. |
(c) | Exercise/Sale. If Stock is publicly traded, all or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company. |
(d) | Exercise/Pledge. If Stock is publicly traded, all or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company. |
(e) | Promissory Note. With the consent of the Board of Directors, all or part of the Purchase Price, other than the par value of any Shares, which must be paid in cash or cash equivalents, may be paid with a full-recourse promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note. |
(a) | Basic Term. This option shall in any event expire on the expiration date set forth in the Notice of Stock Option Grant, which date is 10 years after the Date of Grant (five years after the Date of Grant if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies). | |
(b) | Termination of Service. (Except by Death) . If the Optionees Service terminates for any reason other than death, then this option shall expire on the earliest of the following occasions: |
(i) | The expiration date determined pursuant to Subsection (a) above; | ||
(ii) | The date three months after the termination of the Optionees Service for any reason other than Disability; | ||
(iii) | The date six months after the termination of the Optionees Service by reason of Disability; or | ||
(iv) | The date of the termination of the Optionees Service for Cause. |
(c) | Death of the Optionee. If the Optionee dies while in Service, then this option shall expire on the earlier of the following dates: |
(i) | The expiration date determined pursuant to Subsection (a) above; or | ||
(ii) | The date 12 months after the Optionees death. |
(d) | Leaves of Absence. For any purpose under this Agreement, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). | |
(e) | Notice Concerning ISO Treatment. If this option is designated as an ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the extent it is exercised (i) more than three months after the date the Optionee ceases to be an Employee for any reason other than death or permanent and total disability (as defined in Section 22 (e)(3) of the Code), (ii) more than 12 months after the date the Optionee ceases to be an Employee by reason of such permanent and total disability or (iii) after the Optionee has been on a leave of absence for more than 90 days, unless the Optionees reemployment rights are guaranteed by statute or by contract. |
(a) | Right of First Refusal. In the event that the Optionee proposes to sell, pledge or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in such Shares, the Company shall have the Right of First Refusal with respect to all (and not less than all) of such Shares. If the Optionee desires to transfer Shares acquired under this Agreement, the Optionee shall give a written Transfer Notice to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price, the name and address of the proposed Transferee and proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal or state securities laws. The Transfer Notice shall be signed both by the Optionee and by the proposed Transferee and must constitute a binding commitment of both parties to the transfer of the Shares. The Company shall have the right to purchase all, and not less than all, of the Shares on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted under Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the Company. The Companys rights under this Subsection (a) shall be freely assignable, in whole or in part. |
(b) | Transfer of Shares. If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received the Transfer Notice, the Optionee may, not later than 90 days following receipt of the Transfer Notice by the Company, conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice, provided that any such sale is made in compliance with applicable federal and state securities laws and not in violation of any other contractual restrictions to which the Optionee is bound. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in Subsection (a) above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Shares on the terms set forth in the Transfer Notice within 60 days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Shares was to be made in a form other than cash or cash equivalents paid at the time of transfer, the Company shall have the option of paying for the Shares with cash or cash equivalents equal to the present value of the consideration described in the Transfer Notice. |
(c) | Additional Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Companys outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such transaction distributed with respect to any Shares subject to this Section 7 or into which such Shares thereby become convertible shall immediately be subject to this Section 7. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class of the Shares subject to this Section 7. |
(d) | Termination of Right of First Refusal. Any other provision of this Section 7 notwithstanding, in the event that the Stock is readily tradable on an established securities market when the Optionee desires to transfer Shares, the Company shall have no Right of First Refusal, and the Optionee shall have no obligation to comply with the procedures prescribed by Subsections (a) and (b) above. |
(e) | Permitted Transfers. This Section 7 shall not apply to (i) a transfer by beneficiary designation, will or intestate succession or (ii) a transfer to the Optionees spouse, children or to a trust established by the Optionee for the benefit of the Optionee or the Optionees spouse, children or grandchildren, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If the Optionee transfers any Shares acquired under this Agreement, either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Section 7 shall apply to the Transferee to the same extent as to the Optionee. |
(f) | Termination of Rights as Stockholder. If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Shares to be purchased in accordance with this Section 7, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement. |
(a) | It and the Optionee have taken any actions required to register the Shares under the Securities Act or to perfect an exemption from the registration requirements thereof; | ||
(b) | Any applicable listing requirement of any stock exchange or other securities market on which Stock is listed has been satisfied; and | ||
(c) | Any other applicable provision of state or federal law has been satisfied. |
(a) | Securities Law Restrictions. Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act, the securities laws of any state or any other law. |
(b) | Market Stand-Off. In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Companys initial public offering, the Optionee shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any Shares acquired under this Agreement without the prior written consent of the Company or its underwriters. Such restriction (the Market Stand-Off) shall be in effect for such period of time following the date of the final prospectus for the offering as may be requested by the Company or such underwriters. In no event, however, shall such period exceed 180 days. The Market Stand-Off shall in any event terminate two years after the date of the Companys initial public offering. In the event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Companys outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Agreement until the end of the applicable stand-off period. The Companys underwriters shall be beneficiaries of the agreement set forth in this Subsection (b). This Subsection (b) shall not apply to Shares registered in the public offering under the Securities Act, and the Optionee shall be subject to this Subsection (b) only if the directors and officers of the Company are subject to similar arrangements. |
(c) | Investment Intent at Grant. The Optionee represents and agrees that the Shares to be acquired upon exercising this option will be acquired for investment, and not with a view to the sale or distribution thereof. | |
(d) | Investment Intent at Exercise . In the event that the sale of Shares under the Plan is not registered under the Securities Act but an exemption is available which requires an investment representation or other representation, the Optionee shall represent and agree at the time of exercise that the Shares being acquired upon exercising this option are being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel. | |
(e) | Legends. All certificates evidencing Shares purchased under this Agreement shall bear the following legend: | |
THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS |
TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE. |
All certificates evidencing Shares purchased under this Agreement in an unregistered transaction shall bear the following legend (and such other restrictive legends as are required or deemed advisable under the provisions of any applicable law): | ||
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. |
(f) | Removal of Legends . If, in the opinion of the Company and its counsel, any legend placed on a stock certificate representing Shares sold under this Agreement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend. | |
(g) | Administration . Any determination by the Company and its counsel in connection with any of the matters set forth in this Section 10 shall be conclusive and binding on the Optionee and all other persons. |
(a) | Rights as a Stockholder. Neither the Optionee nor the Optionees representative shall have any rights as a Stockholder with respect to any Shares subject to this option until the Optionee or the Optionees representative becomes entitled to receive such Shares by filing a notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5. | |
(b) | No Retention Rights. Nothing in this option or in the Plan shall confer upon the Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without Cause. |
(c) | Proprietary Information. Optionee agrees that all financial and other information relating to the Company furnished to Optionee pursuant to the Plan constitutes Proprietary Information of the Company. Optionee further agrees to hold in confidence and not disclose or, except within the scope of Optionees Service, use any Proprietary Information. Optionee shall not be obligated under this paragraph with respect to information Optionee can document is or becomes readily publicly available without restriction through no fault of Optionee. Upon termination of Optionees employment, Optionee shall promptly return to Company all items containing or embodying Proprietary Information (including all copies), except that Optionee may keep personal copies of materials distributed to stockholders generally. | |
(d) | Notice . Any notice required or permitted to be delivered under this Agreement shall be in writing and shall be deemed received (i) the business day following electronic verification of receipt by the receiving machine, if sent by facsimile, provided an additional copy is sent by First Class mail as provided herein, (ii) upon personal delivery to the party to whom the notice is directed, if sent by a reputable messenger service, (iii) the business day following deposit with a reputable overnight courier, or (iv) five days after deposit in the U.S. mail, First Class with postage prepaid. Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most recently provided to the Company. | |
(e) | Entire Agreement. The Notice of Stock Option Grant, this Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof. | |
(f) | Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, as such laws are applied to contracts entered into and performed in such State. |
(a) | Agreement shall mean this Stock Option Agreement. | |
(b) | Board of Directors shall mean the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee. | |
(c) | Cause shall mean (i) the unauthorized use or disclosure of the confidential information or trade secrets of the Company, which use or disclosure causes material harm to the Company, (ii) conviction of, or a plea of guilty or no contest to, a felony under the laws of the United States or any state thereof, (iii) gross negligence or (iv) continued failure to perform assigned duties after receiving written notification from the Board of Directors. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions that the Company (or a Parent or Subsidiary) may consider as grounds for the discharge of an Optionee. |
(d) | Change in Control shall mean the sale, conveyance, disposal, or encumbrance of all or substantially all of the Companys property or business or the Companys merger into or consolidation with any other corporation where the stockholders of the Company immediately prior to such merger or consolidation own less than fifty percent (50%) of such corporation, directly or indirectly, after such merger or consolidation or if the Company effects any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is transferred. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Companys incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction. | |
(e) | Code shall mean the Internal Revenue Code of 1986, as amended. | |
(f) | Committee shall mean a committee of the Board of Directors, as described in Section 2 of the Plan. | |
(g) | Company shall mean Green Dot Corporation, a Delaware corporation. | |
(h) | Consultant shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors. | |
(i) | Date of Grant shall mean the date specified in the Notice of Stock Option Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to grant this option or (ii) the first day of the Optionees Service. | |
(j) | Disability shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. | |
(k) | Employee shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. | |
(l) | Exercise Price shall mean the amount for which one Share may be purchased upon exercise of this option, as specified in the Notice of Stock Option Grant. | |
(m) | Fair Market Value shall mean the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all persons. Notwithstanding the foregoing, Fair Market Value shall at all times be determined in accordance with the requirements of Section 409A of the Code and the regulations and guidance issued thereunder. | |
(n) | Involuntary Termination shall mean the termination of the Optionees or Purchasers Service by reason of: |
(i) | The involuntary discharge of the Optionee or Purchaser by the Company (or the Parent or Subsidiary employing him or her) for reasons other than Cause; or |
(ii) | The voluntary resignation of the Optionee or Purchaser following (A) a change in his or her position with the Company (or the Parent or Subsidiary employing him or her) that materially reduces his or her level of authority or responsibility or (B) a reduction in his or her compensation (including base salary, fringe benefits and participation in bonus or incentive programs based on corporate performance) by more than 10%. |
(o) | ISO shall mean an employee incentive stock option described in Section 422(b) of the Code. | |
(p) | Nonstatutory Option shall mean a stock option not described in Sections 422(b) or 423(b) of the Code. | |
(q) | Notice of Stock Option Grant shall mean the document so entitled to which this Agreement is attached. | |
(r) | Optionee shall mean the individual named in the Notice of Stock Option Grant. | |
(s) | Outside Director shall mean a member of the Board of Directors who is not an Employee. | |
(t) | Parent shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. | |
(u) | Plan shall mean the Green Dot Corporation First Amended and Restated 2001 Stock Plan, as in effect on the Date of Grant. | |
(v) | Purchase Price shall mean the Exercise Price multiplied by the number of Shares with respect to which this option is being exercised. | |
(w) | Right of First Refusal shall mean the Companys right of first refusal described in Section 7. | |
(x) | Securities Act shall mean the Securities Act of 1933, as amended. | |
(y) | Service shall mean service as an Employee, Outside Director or Consultant. | |
(z) | Share shall mean one share of Stock, as adjusted in accordance with Section 8 of the Plan (if applicable). | |
(aa) | Stock shall mean the Class B Common Stock of the Company. |
(bb) | Subsidiary shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. | |
(cc) | Transferee shall mean any person to whom the Optionee has directly or indirectly transferred any Share acquired under this Agreement. | |
(dd) | Transfer Notice shall mean the notice of a proposed transfer of Shares described in Section 7. |
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BORROWER: | ||||
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GREEN DOT CORPORATION, a Delaware | ||||
corporation | ||||
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By: | /s/ Steven W. Streit | ||
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Steven W. Streit, President | |||
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Attest: | /s/ John C. Ricci | ||
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John C. Ricci, Secretary | |||
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[Corporate Seal] | |||
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BANK: | ||||
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COLUMBUS BANK AND TRUST COMPANY, a | ||||
Georgia banking corporation | ||||
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By: | /s/ Steve Adams | ||
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Vice President | |||
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[Bank Seal] |
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COMPANY: |
Green Dot Corporation
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By: | ||||
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EMPLOYEE: | ||||
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