Yahoo 2008 Annual Report Download - page 100

Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
To date, the Company has repurchased 208.7 million shares, which are recorded as part of treasury stock.
Treasury stock is accounted for under the cost method.
Note 12 E MPLOYEE B ENEFITS
Benefit Plans. The Company maintains a Yahoo! Inc. 401(k) Plan (the “401(k) Plan”) for its full-time employees
in the U.S. The 401(k) Plan allows employees of the Company to contribute up to the Internal Revenue Code
prescribed maximum amount. Employees may elect to contribute from 1 to 50 percent of their annual
compensation to the 401(k) Plan. The Company matches employee contributions at a rate of 25 percent.
Employee contributions are fully vested, whereas vesting in matching Company contributions occurs at a rate of
33 percent per year of employment. During 2006, 2007, and 2008, the Company’s contributions to the 401(k)
Plan amounted to approximately $16 million, $19 million, and $21 million, respectively. The Company also
contributed approximately $13 million, $18 million, and $26 million to its other benefit plans outside of the U.S.
for 2006, 2007, and 2008, respectively.
Stock Plans. The 1995 Plan and stock-based award plans assumed through acquisitions are collectively referred
to as the “Plans.” The 1995 Plan provides for the issuance of stock-based awards to employees, including
executive officers, and consultants. The 1995 Plan permits the granting of incentive stock options, non-statutory
stock options, restricted stock, restricted stock units, stock appreciation rights, indexed options, and dividend
equivalents.
Options granted under the 1995 Plan before May 19, 2005 generally expire 10 years after the grant date, and
options granted after May 19, 2005 generally expire seven years after the grant date. Options generally become
exercisable over a four-year period based on continued employment and vest either monthly, quarterly, semi-
annually, or annually.
The 1995 Plan permits the granting of restricted stock and restricted stock units (collectively referred to as
“restricted stock awards”). The vesting of restricted stock awards is generally the passage of time, to meeting
certain performance-based objectives, or a combination of both, and continued employment through the vesting
period. 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. Each share of the Company’s common stock issued in settlement
of restricted stock awards is counted as 1.75 until June 11, 2007 and 2.00 shares beginning on June 12, 2007
against the 1995 Plan’s share limit.
The 1995 Plan provides for the issuance of a maximum of 704 million shares of which 78 million were still
available for issuance as of December 31, 2008.
The Directors’ Plan provides for the grant of nonqualified stock options and restricted stock units to
non-employee directors of the Company. The Directors’ Plan provides for the issuance of up to 9 million shares
of the Company’s common stock, of which approximately 4.9 million were still available for issuance as of
December 31, 2008. Each share of the Company’s common stock issued in settlement of restricted stock units
granted under the Directors’ Plan is counted as 1.75 shares against the Directors’ Plans’ share limit.
Options granted under the Directors’ Plan before May 25, 2006 generally become exercisable, based on
continued service as a director, for initial grants to new directors, in equal monthly installments over four years,
and for annual grants, with 25 percent of such options vesting on the one year anniversary of the date of grant
and the remaining options vesting in equal monthly installments over the remaining 36-month period thereafter.
Such options generally expire 10 years after the grant date. Options granted on or after May 25, 2006 become
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