LinkedIn 2011 Annual Report Download - page 89

Common Stock Reserved for Future Issuance
As of December 31, 2011, the Company had reserved the following shares of common stock for future
issuances in connection with the following:
Options outstanding ................................... 14,784,701
Restricted stock units outstanding ........................ 1,139,910
Available for future stock option and restricted stock unit
grants ............................................ 12,585,455
Available for future employee stock purchase plan options .... 3,335,633
Total available for future issuance ........................... 31,845,699
Equity Incentive Plans
The Company has two equity incentive plans: the Amended and Restated 2003 Stock Incentive Plan (the
“2003 Plan”) and the 2011 Equity Incentive Plan (the “2011 Plan”). Under the 2003 Plan, 34,814,756 shares of
common stock were reserved for the issuance of incentive stock options (“ISOs”), nonstatutory stock options
(“NSOs”), or to eligible participants as of December 31, 2010. Upon the IPO, 2,000,000 shares were initially
reserved under the 2011 Plan and all shares that were reserved under the 2003 Plan but not issued were assumed
by the 2011 Plan. Following the IPO, any shares subject to options or other similar awards granted under the
2003 Plan that expire, are forfeited, are repurchased by us or otherwise terminate unexercised will become
available under the 2011 Plan. As of December 31, 2011 the total number of shares available under the 2011 Plan
is 29,300,703 shares. No additional shares will be issued under the 2003 Plan. Under the 2011 Plan, the Company
has the ability to issue ISOs, NSOs, stock appreciation rights, restricted stock, restricted stock units (“RSUs”),
performance units and/or performance shares. The ISOs and NSOs will be granted at a price per share not less
than the fair value at date of grant. Options granted to date generally vest over a four-year period with 25%
vesting at the end of one year and the remaining vest monthly thereafter. Options granted generally are
exercisable up to 10 years. The Company began granting RSUs in June 2011, which generally vest over a four-
year period with 25% vesting at the end of one year and the remaining vest quarterly thereafter.
Early Exercise of Stock Options
The Company typically allows employees to exercise options granted under the 2003 Plan prior to vesting.
The unvested shares are subject to the Company’s repurchase right at the original purchase price. The proceeds
initially are recorded as an accrued liability from the early exercise of stock options (see Note 8, Accrued
Liabilities), and reclassified to common stock as the Company’s repurchase right lapses. The Company has
issued common stock of approximately 980,000 and 655,000 shares during the years ended December 31, 2011
and 2010, respectively, for stock options exercised prior to vesting. During the years ended December 31, 2011
and 2010, the Company repurchased 21,830 and 233,812 shares, respectively, of common stock related to
unvested stock options, at the original exercise price due to the termination of employees. At December 31, 2011
and 2010, 789,137 and 981,172 shares held by employees and directors were subject to repurchase at an
aggregate price of $4.8 million and $3.6 million, respectively.
On March 3, 2009, the Company’s Board of Directors approved an executive loan program. The program
allowed certain executives of the Company to exercise options to purchase common stock of the Company
granted to them by executing promissory notes payable to the Company in an aggregate principal amount not to
exceed $0.8 million per participating executive. The loan program contained provisions to ensure compliance
with federal securities laws, which prohibit companies from extending credit to certain executives. The Company
had the right to repurchase some or all of the shares by cancellation of the notes in advance of filing a registration
statement with the SEC. As of December 31, 2010, $3.6 million of promissory notes payable to the Company
were outstanding, but not recorded within the consolidated balance sheet as the notes were considered in
substance non-recourse. There were no promissory notes outstanding as of December 31, 2011 as they were
repaid in full during 2011.
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