Yahoo 2009 Annual Report Download - page 101

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
a person or group attempting to take over the Company without the approval of the Board, the Company’s rights
plan could make it more difficult for a third-party to acquire the Company (or a significant percentage of its
outstanding capital stock) without first negotiating with the Board regarding that acquisition.
In addition, the Board has the authority to issue up to 10 million shares of Preferred Stock (of which 2 million
shares have been designated as Series A Junior Participating Preferred Stock) and to determine the price, rights,
preferences, privileges, and restrictions, including voting rights, of those shares without any further vote or action
by the stockholders. The stockholder rights plan was not adopted in response to any effort to acquire control of
the Company. The Company repurchases its common stock from time to time in part to reduce the dilutive
effects of our stock options, awards, and employee stock purchase plan.
Stock Repurchases. In October 2006, the Board authorized a new stock repurchase program allowing it to
repurchase up to $3.0 billion of its outstanding shares of common stock from time to time over the next five
years from the date of authorization, dependent on market conditions, stock price, and other factors. Repurchases
may take place in the open market or in privately negotiated transactions, including derivative transactions, and
may be made under a Rule 10b5-1 plan.
Under this program, in the year ended December 31, 2007, the Company repurchased 58 million shares of
common stock directly at an average price of $27.34 per share. Total cash consideration for the repurchased stock
was $1.6 billion. Under this program, in the year ended December 31, 2008, the Company repurchased 3 million
shares of common stock directly at an average price of $23.39 per share, for total consideration of $79 million.
Under this program, in the year ended December 31, 2009, the Company repurchased 7 million shares of
common stock directly at an average price of $15.31 per share, for total consideration of $113 million. The
remaining authorization under the Company’s share repurchase program is approximately $973 million.
Structured Stock Repurchase. During the year ended December 31, 2007, the Company entered into a $250
million structured stock repurchase transaction. This transaction matured and settled in 2007. The Company
received 8 million shares of its common stock at an effective buy-back price of $29.80 per share. The structured
stock repurchase transaction was recorded in stockholders’ equity on the consolidated balance sheets. During the
years ended December 31, 2008 and 2009, the Company had no structured stock repurchase transactions.
As of December 31, 2009, the Company has repurchased 216 million shares; 208 million have been retired,
resulting in reductions of $0.2 million in common stock, $1.5 billion in additional paid-in-capital, and $3.8
billion in retained earnings, and 8 million 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 2007, 2008, and 2009, the Company’s contributions to the 401(k)
Plan amounted to approximately $19 million, $21 million, and $18 million, respectively. The Company also
contributed approximately $18 million, $26 million, and $20 million to its other benefit plans outside of the U.S.
for 2007, 2008, and 2009, respectively.
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