STOCKHOLDERS’ EQUITY

A summary of changes in stockholders’ equity is as follows (dollars in thousands):



	Common Stock			Additional Paid-in Capital			Retained Earnings		Total Green Brick Partners, Inc. Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital			Retained Earnings		Total Green Brick Partners, Inc. Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
Balance as of December 31, 2017	50,598,901	$	506	$	289,938		$	125,903	$	416,347		$	16,691		$	433,038
Share-based compensation	—	—		215			—		215			—			215
Issuance of common stock under 2014 Omnibus Equity Incentive Plan, net of shares withheld for employee taxes	100,983	1		668			—		669			—			669
Amortization of deferred share-based compensation	—	—		301			—		301			—			301
Common stock issued in connection with the investment in Challenger Homes	20,000	—		—			—		—			—			—
Accretion of redeemable noncontrolling interest	—	—		(115		)	—		(115		)	—			(115		)
Distributions	—	—		—			—		—			(10,746		)	(10,746		)
Net income	—	—		—			38,269		38,269			8,563			46,832
Balance as of September 30, 2018	50,719,884	$	507	$	291,007		$	164,172	$	455,686		$	14,508		$	470,194

Common Stock

Pursuant to the Company’s amended and restated certificate of incorporation (“Certificate of Incorporation”), the Company is authorized to issue up to 100,000,000 shares of common stock, par value $0.01 per share. As of September 30, 2018, there were 50,719,884 shares of common stock issued and outstanding.

On March 16, 2018, 20,000 shares of common stock were issued as additional consideration for the investment in Challenger Homes upon resolution of terms for such holdback shares.

The Company’s Board of Directors (the “BOD”) authorized a share repurchase program for the period beginning on October 3, 2018 and ending on October 3, 2020 of the Company’s common stock for an aggregate price not to exceed $30.0 million. The timing, volume and nature of share repurchases will be at the discretion of management and dependent on market conditions, corporate and regulatory requirements and other factors, and may be suspended or discontinued at any time. Authorized repurchases may be made from time to time in the open market, through block trades or in privately negotiated transactions. No assurance can be given that any particular amount of common stock will be repurchased. All or part of the repurchases may be implemented under a trading plan under Rule 10b5-1 established by the SEC, which would allow repurchases under pre-set terms at times when the Company might otherwise be prevented from doing so under insider trading laws or because of self-imposed blackout periods. This repurchase program may be modified, extended or terminated by the BOD at any time. The Company intends to finance any repurchases with available cash and proceeds from borrowings under lines of credit.

Preferred Stock

Pursuant to the Company’s Certificate of Incorporation, the Company is authorized to issue up to 5,000,000 shares of preferred stock, par value $0.01 per share. The BOD has the authority, subject to any limitations imposed by law or NASDAQ listing rules, without further action by the stockholders, to issue such preferred stock in one or more series and to fix the voting powers, if any, the preferences and relative, participating, optional or other special rights or privileges, if any, of such series and the qualifications, limitations or restrictions thereof. These rights, preferences and privileges may include, but are not limited to, dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of that series. As of September 30, 2018, there were no shares of preferred stock issued and outstanding.

Section 382 Transfer Restrictions

If the Company were to experience an ownership change, Section 382 of the Internal Revenue Code imposes an annual limitation which could impact the utilization of our net operating loss carryforwards. To reduce the likelihood of such an ownership change, the BOD implemented certain transfer restrictions, including Article V of the Company’s Certificate of Incorporation, and a Section 382 rights agreement (the “Rights Agreement”) regarding preservation of our net operating loss carryforwards. On March 27, 2014, the BOD declared a dividend of one preferred share purchase right with respect to each outstanding share of common stock to purchase one one-thousandth of a share of Series B Junior Participating Preferred Stock, par value $0.01 per share, at a price of $30.00 per one one-thousandth of a share, subject to adjustment as provided in the Rights Agreement. The dividend was payable to stockholders of record at the close of business on April 7, 2014. As of September 30, 2018, the Rights Agreement has not been triggered.

Redeemable Noncontrolling Interest in Equity of Consolidated Subsidiary

As part of the GRBK GHO Homes business combination, we entered into a put/call agreement (“Put/Call Agreement”) with respect to the equity interest in the joint venture held by the minority partner. The Put/Call Agreement provides that the 20% ownership interest in GRBK GHO Homes held by the minority partner is subject to put and purchase options starting in April 2021. The exercise price is based on the financial results of GRBK GHO Homes for the three years prior to exercise of the option. Based on the final allocation of purchase price as discussed in Note 3, the fair value of the estimated payment to repurchase these shares was $7.0 million. If the minority partner does not exercise the put option, we have the option, but not the obligation, to buy the 20% interest in GRBK GHO Homes from our partner.

Based on the nature of the put/call structure, the minority partner’s interest in GRBK GHO Homes is classified as redeemable noncontrolling interest on the condensed consolidated balance sheets.

The following table shows the changes in redeemable noncontrolling interest in equity of consolidated subsidiary during the period April 26, 2018 to September 30, 2018 (in thousands):



Balance at beginning of period	$	6,346
Purchase accounting adjustment	605
Adjusted balance at beginning of period	6,951
Net income	775
Accretion of redeemable noncontrolling interest	115
Balance at end of period	$	7,841