Shares Subject to the Equity Incentive Plan
Up to 198,000,000 shares, subject to adjustment in the event of certain corporate events, stock splits, and similar transactions, may be issued pursuant
to awards granted under the equity incentive plan, including with respect to grants made before and to be made after the 2021 Annual Meeting. This number of shares has been reduced from the 236,000,000 shares that were originally reserved for
issuance under the equity incentive plan. Of the 236,000,000 shares that were originally reserved for issuance under the equity incentive plan, as of September 30, 2020, 139,206,766 shares remained available for the grant of new awards and
11,471,849 shares were subject to outstanding awards. For clarity, if the proposed share reduction of 38,000,000 had been approved and applied on September 30, 2020, 101,206,766 shares would be available for the grant of new awards from such
date onwards. The number of shares subject to awards that were granted between September 30, 2020 and November 1, 2020 further reduces the number of shares that would be available for the grant of new awards, as further described under the
heading Equity Plan Share Reservation Summary Table. Awards granted after November 1, 2020 would further reduce the number of shares available for grant below the 101,206,766 shares described above.
As of November 1, 2020, 127,552,157 shares had been issued under the plan, 11,455,425 shares were subject to outstanding awards (including
5,779,311 subject to stock options, 0 subject to restricted stock, 4,681,314 subject to restricted stock units, and 994,800 subject to performance share awards), and 139,204,318 shares remained available for grant. Moreover, as of November 1,
2020, the closing price of a share of our class A common stock was $181.71 per share, such that the maximum aggregate market value of the 139,204,318 shares that could be issued under the equity incentive plan was approximately $25.29 billion
on such date. As of November 1, 2020, the weighted average remaining term of outstanding stock options was 6.81 years, and the weighted average exercise price of outstanding stock options was $114.69. The shares subject to awards under the
equity incentive plan may be authorized and unissued shares or previously issued shares that we re-acquired. As of November 1, 2020, we did not have any equity awards outstanding under other equity
compensation plans, other than purchase rights under our Employee Stock Purchase Plan.
Shares subject to awards that have been canceled,
terminated, expired, forfeited or settled in cash will generally be available for delivery in connection with future awards under the equity incentive plan, as amended, to the extent of any such cancellation, termination, expiration, forfeiture or
cash settlement, provided that any shares delivered upon settlement of an award will not again be available for future grant or sale under the plan. However, the equity incentive plan, as amended and restated, provides that shares used to pay the
exercise or purchase price of an award and/or shares withheld to satisfy the tax withholding obligations related to an award shall not again be available for future grant or sale under the plan. If we or one of our subsidiaries acquires or combines
with another company, any awards that may be granted under the equity incentive plan in substitution or exchange for outstanding stock options or other awards of the other company will not reduce the shares available for issuance under the equity
incentive plan.
Types of Awards
Under the equity
incentive plan, the Compensation Committee is authorized to grant stock options, stock appreciation rights, restricted stock and restricted stock unit awards, performance units, performance shares, cash-based awards, and other stock-based awards,
provided that only employees may receive incentive stock options.
Stock
Options. A stock option is the right to purchase a specified number of shares of Class A common stock in the future at a specified exercise price and subject to the other terms and conditions
specified in the award agreement and equity incentive plan. Stock options may either be granted in the form of incentive stock options, which may be eligible for special tax treatment under the Internal Revenue Code of 1986, as amended (the
Code), or nonqualified stock options. The Compensation Committee sets the exercise price of each stock option, which cannot be less than 100% of the fair market value of our Class A common stock at the time of grant.
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