Common Stock, Preferred Stock and Equity Plans

During 2015, the Company’s shareholders approved an amendment to the Company’s Restated Articles of Organization increasing the number of authorized shares of common stock from 300,000,000 to 500,000,000. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by the Company’s Board of Directors, and to share ratably in the Company’s assets legally available for distribution to the Company’s shareholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The holders of common stock do not have cumulative voting rights.

The Company is authorized to issue 1,000,000 shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by the Company’s shareholders. As of December 31, 2015 and 2014, the Company had no shares of preferred stock issued or outstanding.

Stock and Option Plans

The purpose of each of the Company’s stock and option plans is to attract, retain and motivate its employees, consultants and directors. Awards granted under these plans can be incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), restricted stock (“RSs”), restricted stock units (“RSUs”) or other equity-based awards, as specified in the individual plans.

Shares issued under all of the Company’s plans are funded through the issuance of new shares. The following table contains information about the Company’s equity plans:



			As of December 31, 2015
Title of Plan	Group Eligible	Type of Award Granted	Awards Outstanding	Additional Awards Authorized for Grant
2013 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, RS and RSU	5,851,040	14,124,989
2006 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, RS and RSU	8,274,211	—
1996 Stock and Option Plan	Employees, Non-employee Directors, Advisors and Consultants	NSO	43,664	—
		Total	14,168,915	14,124,989

All options granted under the Company’s 2013 Stock and Option Plan (“2013 Plan”), 2006 Stock and Option Plan (“2006 Plan”) and 1996 Stock and Option Plan were granted with an exercise price equal to the fair value of the underlying common stock on the date of grant. As of December 31, 2015, the stock and option plan under which the Company makes new equity awards is the Company’s 2013 Plan. Under the 2013 Plan, no stock options can be awarded with an exercise price less than the fair market value on the date of grant. The Company’s shareholders (i) approved an increase in the number of shares authorized for issuance pursuant to the 2013 Plan of 7,800,000 shares, plus the number of shares that remained available for issuance under the Company’s 2006 Stock and Option Plan, which rolled-over into the 2013 Stock and Option Plan in 2015, (ii) approved an increase in the number of shares authorized for issuance pursuant to the 2013 Plan of 9,500,000 shares in 2014 and (iii) authorized 3,300,000 shares for issuance pursuant to the 2013 Plan in 2013.

During the three years ended December 31, 2015, grants to current employees and directors primarily had a grant date that was the same as the date the award was approved by the Company’s Board of Directors. During the three years ended December 31, 2015, for grants to new employees and directors, the date of grant for awards was the employee’s first day of employment or the date the director was elected to the Company’s Board of Directors. All options awarded under the Company’s stock and option plans expire not more than 10 years from the grant date.

During the three years ended December 31, 2015, all shares of outstanding restricted stock and restricted stock units have been granted at a price equal to $0.01, the par value of the Company’s common stock. Vesting of options, restricted stock and restricted stock units generally is ratable over specified periods and is determined by the Company’s Board of Directors.

The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2015:



	Stock Options		Weighted-average Exercise Price		Weighted-average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)		(per share)		(in years)	(in thousands)
Outstanding at December 31, 2014	12,003		$	56.81
Granted	3,531		$	119.09
Exercised	(3,289	)	$	50.34
Forfeited	(1,100	)	$	81.77
Outstanding at December 31, 2015	11,145		$	75.99	7.15	$	567,531
Exercisable at December 31, 2015	5,541		$	56.85	5.80	$	385,214
Exercisable and Expected to Vest at December 31, 2015	10,461		$	74.11	7.04	$	551,593

The aggregate intrinsic value in the table above represents the total pre-tax amount, net of exercise price, that would have been received by option holders if all option holders had exercised all options with an exercise price lower than the market price on December 31, 2015, which was $126.26 based on the average of the high and low price of the Company’s common stock on that date.

The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during 2015, 2014 and 2013 was $252.9 million, $316.5 million and $291.6 million, respectively. The total cash received by the Company as a result of employee stock option exercises during 2015, 2014 and 2013 was $165.6 million, $255.5 million and $246.8 million, respectively.

The following table summarizes information about stock options outstanding and exercisable at December 31, 2015:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted-average Remaining Contractual Life	Weighted-average Exercise Price		Number Exercisable	Weighted-average Exercise Price
	(in thousands)	(in years)	(per share)		(in thousands)	(per share)
$18.93–$20.00	138	2.10	$	18.93	138	$	18.93
$20.01–$40.00	2,247	3.70	$	34.38	2,155	$	34.24
$40.01–$60.00	2,310	6.61	$	48.09	1,444	$	49.03
$60.01–$80.00	1,434	8.09	$	75.96	557	$	75.15
$80.01–$100.00	1,785	7.99	$	90.28	702	$	87.55
$100.01–$120.00	1,727	9.05	$	109.31	294	$	109.23
$120.01–$134.69	1,504	9.53	$	131.04	251	$	128.90
Total	11,145	7.15	$	75.99	5,541	$	56.85

The following table summarizes the restricted stock and restricted stock units activity of the Company during the year ended December 31, 2015:



	Restricted Stock				Restricted Stock Units
	Number of Units		Weighted-average Grant-date Fair Value		Number of Shares		Weighted-average Grant-date Fair Value
	(in thousands)		(per share)		(in thousands)		(per share)
Unvested at December 31, 2014	2,907		$	78.18	185		$	76.79
Granted	1,407		$	116.63	97		$	118.26
Vested	(1,033	)	$	68.39	(66	)	$	70.24
Cancelled	(450	)	$	91.21	(23	)	$	89.97
Unvested at December 31, 2015	2,831		$	98.80	193		$	98.36

The total fair value of restricted stock that vested during 2015, 2014 and 2013 (measured on the date of vesting) was $124.0 million, $54.5 million and $50.9 million, respectively. The total fair value of restricted stock units that vested during 2015, 2014 and 2013 (measured on the date of vesting) was $8.0 million, $2.9 million and $1.7 million, respectively.

Employee Stock Purchase Plan

The Company has an employee stock purchase plan (the “ESPP”). The ESPP permits eligible employees to enroll in a twelve-month offering period comprising two six-month purchase periods. Participants may purchase shares of the Company’s common stock, through payroll deductions, at a price equal to 85% of the fair market value of the common stock on the first day of the applicable twelve-month offering period, or the last day of the applicable six-month purchase period, whichever is lower. Purchase dates under the ESPP occur on or about May 14 and November 14 of each year. As of December 31, 2015, there were 1,163,614 shares of common stock authorized for issuance pursuant to the ESPP.

In 2015, the following shares were issued to employees under the ESPP:



	Year Ended December 31, 2015
	(in thousands, except per share amount)
Number of shares	233
Average price paid per share	$	84.50