upgrade ubuntu 14.04 LTS to ubuntu 16.04 LTS

1. make sure your server system up-to-date as follows
   $ sudo apt-get update && sudo apt-get dist-upgrade

2. reboot
   $ sudo reboot

3. install the update-manager-core package using the command below that is if it is not yet installed on your server:
   $ sudo apt-get install update-manager-core

4. After that, edit this file, /etc/update-manager/release-upgrades using your favorite editor and set Prompt=lts as in the output below:
   $ sudo vi /etc/update-manager/release-upgrades

5. start the upgrade process as follows:
   sudo do-release-upgrade -d

Reference:
http://www.tecmint.com/upgrade-ubuntu-14-04-to-16-04/#ubuntu-14-04-server