NOTE 10. STOCKHOLDERS’ EQUITY

(a) Stock Purchase Rights

All shares of the Company’s common stock, if issued prior to the termination by the Company of its rights agreement, dated as of December 4, 2006, include stock purchase rights. The rights are exercisable only if a person or group acquires twenty percent or more of the Company’s common stock or announces a tender or exchange offer which would result in ownership of twenty percent or more of the Company’s common stock. Following the acquisition of twenty percent or more of the Company’s common stock, the holders of the rights, other than the acquiring person or group, may purchase Medivation common stock at half of its fair market value. In the event of a merger or other acquisition of the Company, the holders of the rights, other than the acquiring person or group, may purchase shares of the acquiring entity at half of their fair market value. The rights were not exercisable at March 31, 2015.

(b) Medivation Equity Incentive Plan

The Medivation Equity Incentive Plan provides for the issuance of options and other stock-based awards, including restricted stock units, performance share awards and stock appreciation rights. The vesting of all outstanding awards under the Medivation Equity Incentive Plan will accelerate, and all such share awards will become immediately exercisable, upon a “change of control” of Medivation, as defined in the Medivation Equity Incentive Plan. At March 31, 2015, there were 21,150,000 shares of common stock authorized for issuance under the Medivation Equity Incentive Plan, of which approximately 2.0 million shares of common stock were available for issuance under the Medivation Equity Incentive Plan.

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2015:


	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value ⁽¹⁾
Outstanding at December 31, 2014		5,067,957		$	33.52
Granted		507,916		$	114.56
Exercised		(374,281	)	$	23.07
Forfeited		(18,502	)	$	78.60

Outstanding at March 31, 2015		5,183,090		$	42.06		6.56	$	451.0

Vested and exercisable at March 31, 2015		3,323,776		$	22.56		5.33	$	354.0

⁽¹⁾

The aggregate intrinsic value is calculated as the pre-tax difference between the weighted average exercise price of the underlying awards and the closing price per share of $129.07 of the Company’s common stock on March 31, 2015. The calculation excludes any awards with an exercise price higher than the closing price of the Company’s common stock on March 31, 2015. The amounts are presented in millions.

The weighted-average grant-date fair value per share of options granted during the three months ended March 31, 2015 was $51.07.

Restricted Stock Units

The following table summarizes restricted stock unit activity for the three months ended March 31, 2015:


	Number of Shares			Weighted- Average Grant-Date Fair Value
Unvested at December 31, 2014		483,580		$	76.20
Granted		194,171		$	110.36
Vested		(74,370	)	$	81.28
Forfeited		(7,932	)	$	87.36

Unvested at March 31, 2015		595,449		$	86.56

Stock Appreciation Rights

The following table summarizes stock appreciation rights activity for the three months ended March 31, 2015:


	Number of Rights			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value ⁽¹⁾
Outstanding at December 31, 2014		688,228		$	24.05
Granted		—			—
Exercised		(26,912	)	$	23.20
Forfeited		—			—

Outstanding at March 31, 2015		661,316		$	24.08		6.72	$	69.4

Vested and exercisable at March 31, 2015		520,222		$	24.11		6.71	$	54.6

(1)

(c) ESPP

The ESPP permits eligible employees to purchase shares of the Company’s common stock through payroll deductions at the lower of 85% of the fair market value of the common stock at the beginning or end of a purchase period. Eligible employee contributions are limited on an annual basis to $25,000 in accordance with Section 423 of the Internal Revenue Code. As of March 31, 2015, a total of 3,000,000 shares of the Company’s common stock were authorized for issuance under the ESPP, and 123,680 shares have been issued.

(d) Stock-Based Compensation

The Company estimates the fair value of stock options, stock appreciation rights, and ESPP shares using the Black-Scholes valuation model. The Black-Scholes assumptions used to estimate the fair value of stock options granted were as follows:


	Three Months Ended March 31,
	2015			2014
Risk-free interest rate		1.56%-1.61	%		1.57-1.65	%
Estimated term (in years)		4.98			5.23
Estimated volatility		50	%		64	%
Estimated dividend yield		—			—

No ESPP offering periods commenced during the three months ended March 31, 2015 and 2014, respectively.

Stock-based compensation expense was as follows:


	Three Months Ended March 31,
	2015		2014
Stock-based compensation expense recognized as:
R&D expenses	$	5,811	$	4,122
SG&A expenses		7,561		5,539

Total	$	13,372	$	9,661

Unrecognized stock-based compensation expense totaled $104.3 million at March 31, 2015 and is expected to be recognized over a weighted-average period of 2.7 years.