Stockholders' Deficit

12 Months Ended

Dec. 31, 2013

Stockholders' Deficit

Stockholders' Deficit

Note 9. Stockholders' Deficit

        Preferred Stock.    We are authorized to issue 5,000,000 shares of preferred stock, none of which was outstanding as of December 31, 2013 and 2012. The Board of Directors may determine the rights, preferences and privileges of any preferred stock issued in the future.

        Common Stock.    We are authorized to issue 400,000,000 shares of common stock.

        Stock Compensation Plans.    As of December 31, 2013, we had reserved a total of 21,222,357 shares of our common stock for future issuance related to our stock plans as described below. Summaries of stock option activity for our stock option plans as of December 31, 2013, 2012 and 2011, and related information for the years ended December 31 are included in the plan descriptions below.

        2010 Stock Incentive Plan.    In May 2010 the Board of Directors adopted the 2010 Stock Incentive Plan, which was amended and restated in May 2013 (the "2010 Plan") for issuance of common stock to employees, non-employee directors, consultants, and scientific advisors. Options granted to employees, consultants, and scientific advisors under the 2010 Plan vest over three years, pursuant to a formula determined by our Board of Directors, and expire after seven years. All options are exercisable at the fair market value of the stock on the date of grant. Non-employee director options expire after ten years. In May 2011, our stockholders approved an increase in the number of shares of common stock reserved for issuance under the 2010 Plan from 6,053,475 to 12,553,475. In May 2012, our stockholders approved an increase in the number of shares of common stock reserved for issuance under the 2010 Plan from 12,553,475 to 16,553,475. In May 2013, our stockholders approved an increase in the number of shares of common stock reserved for issuance under the 2010 Plan from 16,553,475 to 21,753,475.

        Activity under the combined plans was as follows:

				Shares Subject to Outstanding Options
	Shares Available for Grant			Shares			Weighted Average Exercise Price
Balance at December 31, 2010		4,786,694			20,107,923		$	8.44
Additional authorization		6,500,000			—			—
Options granted		(5,095,333	)		5,095,333		$	15.12
Options exercised		—			(2,294,586	)	$	7.17
Options expired		—			(592,085	)	$	17.44
Options cancelled		264,740			(320,006	)	$	13.89
Balance at December 31, 2011		6,456,101			21,996,579		$	9.78
Additional authorization		4,000,000			—			—
Options granted		(5,469,000	)		5,469,000		$	18.12
Options exercised		—			(5,117,374	)	$	8.51
Vesting of restricted stock units		—			(50,000	)		—
Options expired		—			(44,167	)	$	6.14
Options cancelled		419,176			(437,427	)	$	16.02
Balance at December 31, 2012		5,406,277			21,816,611		$	12.05
Additional authorization		5,200,000			—			—
Options granted		(5,754,500	)		5,754,500		$	21.42
Options exercised		—			(6,872,901	)	$	10.15
Vesting of restricted stock units		—			(50,000	)		—
Options cancelled		524,837			(525,121	)	$	17.53
Balance at December 31, 2013		5,376,614			20,123,089		$	15.16

        Options to purchase a total of 12,474,119, 14,596,823 and 15,604,786 shares as of December 31, 2013, 2012 and 2011, respectively, were exercisable and vested. The aggregate intrinsic value of options exercised for the years ended December 31, 2013, 2012 and 2011 were $141.8 million, $61.3 million and $23.5 million, respectively. At December 31, 2013 the aggregate intrinsic value of options outstanding and vested options are $713.8 million and $705.1 million, respectively.

        The following table summarizes information about stock options outstanding as of December 31, 2013 for the 2010 Plan:

	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
$2.67 - $5.46		2,143,766		2.18	$	3.89		2,143,766	$	3.89
$6.04 - $9.41		2,736,317		2.19		8.92		2,736,317		8.92
$9.50 - $13.83		2,069,899		2.29		12.22		2,031,637		12.20
$13.92 - $14.60		75,282		3.89		13.99		66,670		13.99
$14.72 - $14.72		2,361,483		4.06		14.72		2,280,828		14.72
$14.74 - $17.50		920,643		5.02		16.35		547,532		16.10
$17.79 - $17.79		3,345,871		5.04		17.79		2,027,356		17.79
$17.89 - $18.30		401,972		5.27		18.12		184,525		18.18
$18.32 - $18.32		4,222,000		6.10		18.32		—		—
$18.97 - $47.24		1,845,856		6.66		28.15		455,488		20.92
		20,123,089						12,474,119

        The above table excludes restricted stock units. In December 2011, 100,000 restricted stock units were granted, of which 50,000 vested in December 2012 and 50,000 vested in December 2013.

        In January 2014, Hervé Hoppenot, our new President and Chief Executive Officer, was granted a one-time grant of 400,000 restricted stock units outside of our 2010 Plan. Each restricted stock unit represents the right to acquire one share of our common stock. Vesting of the restricted stock unit will be subject to Mr. Hoppenot's continued employment on the applicable vesting dates, with one-sixth of the restricted stock units vesting at the end of each of the calendar years 2014 through 2019, subject to earlier acceleration of vesting upon the occurrence of certain events in accordance with the terms of his employment agreement.

        Employee Stock Purchase Plan.    On May 21, 1997, our stockholders adopted the 1997 Employee Stock Purchase Plan (the "ESPP"). In May 2011, our stockholders approved an increase in the number of shares available for grant from 7,350,000 shares to 8,350,000 shares. Each regular full-time and part-time employee working 20 hours or more per week is eligible to participate after one month of employment. We issued 390,000, 378,041 and 896,939 shares under the ESPP in 2013, 2012 and 2011, respectively. For the year ended December 31, 2013, 2012 and 2011 we recorded stock compensation expense of $1.5 million, $1.4 million and $1.0 million, respectively, as the ESPP is considered compensatory under the FASB stock compensation rules. As of December 31, 2013, 1,099,268 shares remain available for issuance under the ESPP.