Item 1.01. Entry into a Material Definitive Agreement.
On October 29, 2019, Green Dot Corporation (the “Company”) and its subsidiary bank, Green Dot Bank, entered into the 2020 Amended and Restated Walmart MoneyCard Program Agreement (the “Program Agreement”) with Walmart Inc. (“Walmart”) and certain of Walmart’s subsidiaries. The Program Agreement sets forth the terms under which the Company and Green Dot Bank will continue to serve as the program manager and issuing bank for the Walmart MoneyCard suite of reloadable debit card products. The Amended and Restated Walmart MoneyCard Program Agreement, dated as of May 1, 2015, among the parties thereto, as amended (the “Prior Agreement”), is superseded by the Program Agreement with respect to the sale and reload of MoneyCards.
The Program Agreement sets forth the terms for the sale, marketing, load or reload of MoneyCards at Walmart locations, as well as the potential sale of such other Walmart-branded financial products and services as may be mutually agreed by the parties from time to time (collectively, “Products”). The Products will be issued by Green Dot Bank, and the Company has agreed to pay Walmart a revenue sharing fee, based on certain fees, interchange income and other customer-generated revenue derived from the Products. The term of the Program Agreement expires on January 31, 2027 and shall automatically renew for an additional year to January 31, 2028, unless a party provides notice of its election not to renew at least one year prior to January 31, 2027. The Program Agreement may be earlier terminated by Walmart in certain circumstances, such as the Company’s material breach or insolvency or its failure to meet agreed-upon service levels, and certain changes in control of the Company.
The Company will seek confidential treatment from the Securities and Exchange Commission for certain portions of the Program Agreement in connection with filing such agreement as an exhibit to the Company’s Annual Report on Form 10-K for the period ended December 31, 2019.
The information provided under Item 3.02 herein is incorporated into this Item 1.01 by reference.
Item 1.02. Termination of a Material Definitive Agreement
The Program Agreement supersedes and replaces the Prior Agreement with respect to the sale and reload of MoneyCards.
Item 3.02. Unregistered Sales of Equity Securities.
On October 29, 2019, in recognition of the many different lines of business in which Walmart and Green Dot are engaged, inclusive of the new agreements announced today, the Company agreed to issue to Walmart, in a private placement, 975,000 restricted shares (the “Walmart Shares”) of the Company’s Class A Common Stock, par value $0.001 per share (the “Issuance”) to serve as an incentive for the parties to work together to achieve growth across all of their current and future mutual lines of business. The Issuance will occur on January 2, 2020, and the Walmart Shares will vest in equal monthly increments between January 2, 2020 and December 1, 2022. Walmart will be entitled to vote and receive dividends paid on the Walmart Shares from the issuance date. Walmart has agreed to vote the Walmart Shares in the manner recommended by the Company’s board of directors to the Company’s stockholders generally.
The Walmart Shares will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and will be issued in reliance on the exemption from registration under the Securities Act provided by Section 4(a)(2) and Regulation D (Rule 506) under the Securities Act. Walmart has represented that it is an accredited investor, as defined in Rule 501 of Regulation D promulgated under the Securities Act.
Item 8.01. Other Events.
On October 29, 2019, the Company and Walmart issued a joint press release announcing the Program Agreement and their agreement to jointly establish a new fintech accelerator with a mission to develop innovative products, services and technologies that sit at the intersection of retail shopping and consumer financial services. A copy of the press release is furnished as Exhibit 99.01 to this Current Report on Form 8-K and is incorporated herein by reference.