2/24/2018 S-1 Table of Contents Conversion of Class C Common Stock Shares of Class C common stock will convert automatically into Class A common stock, on a share­for­share basis, upon the conversion of all outstanding shares of Class B common stock into shares of Class A common stock. Fully Paid and Non­Assessable In connection with this offering, our legal counsel will opine that the shares of our Class A common stock to be issued in this offering will be fully paid and non­assessable. Preferred Stock Our Board of Directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications, limitations, or restrictions, in each case without further vote or action by our stockholders. Our Board of Directors can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without any further vote or action by our stockholders. Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring, or preventing a change in control of our company and might adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. We have no current plan to issue any shares of preferred stock. RSAs As of December 31, 2017, we had outstanding 22,100,000 shares of our Class A common stock subject to RSAs, which were granted pursuant to the Co­Founder Grants. The Co­Founder Grants vest upon the satisfaction of the service condition and achievement of certain stock price goals. While the Co­Founder Grants provide the holders with certain stockholder rights, such as the right to vote the shares with the other holders of our Class A common stock, the Co­Founder Grants will be excluded from Class A common stock issued and outstanding until the satisfaction of the vesting conditions. See “Executive Compensation—Co­Founder Restricted Stock Awards” for additional information. Options As of December 31, 2017, we had outstanding options to purchase an aggregate of 7,439,253 shares of our Class B common stock, with a weighted­average exercise price of $7.01 per share, under our equity compensation plans. RSUs As of December 31, 2017, we had outstanding 57,329,003 shares of our Class B common stock subject to RSUs under our 2008 Plan and 25,061,536 shares of our Class A common stock subject to RSUs under our 2017 Plan. RSUs granted on and after August 1, 2015, which we refer to as one­tier RSUs, generally vest upon the satisfaction of a service­based vesting condition. The service­based vesting condition generally is satisfied over a four­year period. 25% of the one­tier RSUs vest upon completion of one year of service measured from the vesting commencement date, and as to the balance in successive equal quarterly installments, subject to continued service through each such vesting date. Our RSUs granted prior to August 1, 2015, which we refer to as two­tier RSUs, generally vest upon the satisfaction of both a service­based vesting condition and the 160 https://www.sec.gov/Archives/edgar/data/1467623/000119312518055809/d451946ds1.htm 168/235