EQUITY COMPENSATION PLANS

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

EQUITY COMPENSATION PLANS

(16) EQUITY COMPENSATION PLANS

Share Incentive Plan

The 2006 Share Incentive Plan, which replaced the Company’s previous stock option plans (the 1997 Stock Plan and the 1998 Directors Options Plan), provides for grants of options to employees to purchase common stock at the fair market value of such shares on the grant date, as well as other forms of equity compensation. During the year ended December 31, 2016, awards issued under the 2006 Share Incentive Plan include both stock options and RSUs. Stock option awards granted to employees generally vest over a four-year period on a cliff basis six months after the grant date and then monthly thereafter. The term of the outstanding options is generally ten years. RSUs granted to employees generally vest annually over a straight-line four-year period after the grant date. RSUs granted to directors generally vest in full one year after the grant date.

As of December 31, 2016, options to purchase approximately 8.9 million shares were outstanding under the Company’s stock option plans.

As of December 31, 2016, an aggregate of approximately 41.5 million shares were authorized and 24.3 million shares were authorized for future issuance under the Share Incentive Plan.

Employee Stock Purchase Plan

Under BioMarin’s ESPP, which was initially approved in June 2006, replacing the Company’s previous plan, and was further amended on March 5, 2014, employees meeting specific employment qualifications are eligible to participate and can purchase shares on established dates (each purchase date) semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement of the offering period or each purchase date of the offering period. Each offering period will span up to two years. The ESPP permits eligible employees to purchase common stock through payroll deductions for up to 10% of qualified compensation, up to an annual limit of $25,000. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During the year ended December 31, 2016, the Company issued 0.2 million shares under the ESPP.

As of December 31, 2016, there were approximately 3.5 million shares were authorized and 0.8 million shares reserved for future issuance under the ESPP.

Board of Director Grants

The Board of Directors have approved the following awards to directors under the 2006 Share Incentive Plan. Each Independent Director is automatically granted an initial equity grant valued at $550,000, based on the Black-Scholes model valuation using a three-month trailing average closing price of the Company’s common stock, with such valuation allocated 40% to RSUs and 60% to options to purchase shares of the Company’s common stock on the date that such person first becomes an Independent Director. The shares of common stock subject to the initial grant vest quarterly over three years and the initial RSU grant vest annually over three years. On the date of the Company’s annual meeting of shareholders, each re-elected Independent Director is granted an additional equity grant valued at $375,000, based on the Black-Scholes model valuation using a three-month trailing average closing price of the Company’s common stock, with such valuation allocated 50% to RSUs and 50% to options. The shares of common stock subject to the annual option grant vest quarterly over one year and the additional annual RSUs vest in full on the one-year anniversary of the grant date. The additional option grant or RSU grant for a director that has served for less than a year is prorated to the nearest quarter. These options and RSUs continue to vest only while the director serves on the Board. The exercise price per share of each of these options is 100% of the fair market value of a share of the Company’s common stock on the date of the grant. These options have a term of 10 years.

Shares Available Under Equity Compensation Plans

At December 31, 2016, an aggregate of approximately 27.2 million unissued shares was authorized for future issuance under the Company’s stock plans, which includes shares issuable under the 2006 Share Incentive Plan, the ESPP and the Company’s expired plans. Under the 2006 Share Incentive Plan, awards that expire or are cancelled generally become available for future issuance under the respective plan.