Yahoo 2005 Annual Report Download - page 95

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The following table summarizes information concerning outstanding and exercisable options as of
December 31, 2005 (in thousands, except years and per share amounts):
Options Outstanding Options Exercisable
Range of
Exercise Prices
per Share
Number
Outstanding
Average Remaining
Contractual Life
(in years)
Weighted Average
Exercise Price
per Share
Number
Exercisable
Weighted Average
Exercise Price
per Share
$0.02 - $3.37 2,688 2.2 $ 2.35 2,593 $ 2.41
$3.48 - $7.93 17,096 5.6 5.52 15,123 5.39
$7.94 - $15.00 30,310 6.2 10.56 20,903 10.92
$15.02 - $20.85 25,048 7.5 19.82 13,715 19.96
$20.96 - $30.00 21,315 5.9 27.29 15,608 27.92
$30.15 - $35.95 31,106 6.9 34.30 9,116 35.01
$36.13 - $40.68 37,291 7.2 38.09 12,928 37.68
$41.09 - $46.37 4,977 4.2 43.28 4,268 43.42
$47.13 - $52.75 365 4.4 51.86 365 51.86
$53.14 - $292.07 12,498 4.2 73.21 12,492 73.20
Total 182,694 6.4 $ 28.11 107,111 $ 27.55
The weighted average fair value of options granted in the years ended December 31, 2003, 2004, and 2005
was $6.87, $12.09 and $11.60 per share, respectively.
Options to purchase approximately 128 million shares and 119 million shares were exercisable as of
December 31, 2003 and 2004, respectively. The weighted average exercise prices per share for options
exercisable as of December 31, 2003 and 2004 were $24.63 and $26.46, respectively.
Restricted Stock. The 1995 Stock Plan permits the granting of restricted stock and restricted stock units,
collectively referred to as “restricted stock awards”. The 1995 Stock Plan permits the granting of restricted
stock awards either alone, in addition to, or in tandem with other equity-based awards made by the
Company. Rights of repurchase on restricted stock awards grants generally lapse upon meeting certain
performance-based milestones, or passage of time, or a combination of both. Restricted stock award
grants are generally measured at fair value on the date of grant based on the number of shares granted and
the quoted price of the Company’s common stock. Such value is recognized as an expense over the
corresponding service period. Restricted stock awards that have performance criteria are subject to
variable accounting treatment. Approximately 0.4 million, 0.4 million, and 7 million shares of restricted
stock awards were granted during 2003, 2004, and 2005, respectively, with average fair market values of
$20.58, $34.99, and $36.86 per share on the date of grant.
Employee Stock Purchase Plan. The Company has an Employee Stock Purchase Plan (the “Purchase
Plan”), which allows employees to purchase shares of the Company’s common stock through payroll
deductions of up to 15 percent of their annual compensation up to certain Internal Revenue Code
prescribed maximums. The price of the common stock purchased under the Purchase Plan is equal to
85 percent of the lower of the fair market value of the common stock on the commencement date of each
24-month offering period or the specified purchase date. The Purchase Plan provides for the issuance of a
maximum of approximately 30 million shares of common stock. During 2003, approximately 3 million
shares were purchased at prices from $4.63 to $10.53 per share. During 2004, approximately 2 million
shares were purchased at prices from $18.58 to $21.48 per share. During 2005, approximately 3 million
shares were purchased at prices from $18.58 to $29.33 per share. Shares available for future issuance
under the Purchase Plan as of December 31, 2005 totaled approximately 15 million shares.
Stock-Based Compensation. The Company measures compensation expense for its stock-based employee
compensation plans using the intrinsic value method. The Company recorded compensation expense of
approximately $22 million, $32 million and $52 million in 2003, 2004, and 2005, respectively. The recorded