LinkedIn 2012 Annual Report Download - page 93

Warrant
In connection with the line of credit agreement, on September 20, 2004, the Company issued a
warrant to purchase 70,365 shares of Series A convertible preferred stock with an exercise price of $0.32
per share. The fair value of the warrant, based on an option valuation model, which approximates a
binomial lattice model, was insignificant and was reflected as a discount to borrowings under the
financing. The warrant was exercisable for seven years from the date of issuance. In May 2010, the
warrant was exercised. As a result, the Company issued 70,365 shares of Series A convertible preferred
stock and received an insignificant amount of proceeds.
Common Stock
Following its IPO, the Company had two classes of authorized common stock outstanding; Class A
common stock and Class B common stock at a maximum aggregate number authorized of 1,000,000,000
and 120,000,000, respectively. As of December 31, 2012, the Company had outstanding 88,829,278 shares
of Class A common stock and 19,817,923 shares of Class B common stock. The rights of the holders of
Class A and Class B common stock are identical, except with respect to voting and conversion. Each share
of Class A common stock is entitled to one vote per share and each share of Class B common stock is
entitled to ten votes per share. Shares of Class B common stock may be converted into Class A common
stock at any time at the option of the stockholder, and are automatically converted upon sale or transfer
to Class A common stock, subject to certain limited exceptions. After its IPO, the Company had an
additional 1,000,000,000 shares of common stock authorized, none of which were issued and outstanding
as of December 31, 2012 and 2011.
Common Stock Reserved for Future Issuance
As of December 31, 2012, the Company had reserved shares of common stock for future issuances in
connection with the following:
Options outstanding ....................................... 8,251,850
Restricted stock units outstanding ............................. 3,239,272
Available for future stock option and restricted stock unit grants ...... 11,039,588
Available for future employee stock purchase plan options ........... 3,102,639
Total reserved for future issuance ............................... 25,633,349
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, 2012. 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 the Company or
otherwise terminate unexercised will become available under the 2011 Plan. As of December 31, 2012, the
total number of shares available under the 2011 Plan is 22,754,032 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 ten 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.
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