Yahoo 2009 Annual Report Download - page 102

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
Stock 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, 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 Restricted stock award vesting criteria is generally the passing of time, meeting
certain performance-based objectives, or a combination of both, and continued employment through the vesting
period, (which varies but does not exceed four years). 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.
During 2009, the Board adopted an amended and restated version of the Yahoo! Inc. 1995 Stock Plan (the
“Restated 1995 Plan”), subject to approval of the amendments by the Company’s stockholders. At the
Company’s annual meeting of stockholders held on June 25, 2009, the Company’s stockholders approved the
Restated 1995 Plan. Among other things, the Restated 1995 Plan reflects amendments to (i) increase the number
of shares of the Company’s common stock available for award grants under the Restated 1995 Plan by 50 million
shares (so that a maximum of 754 million shares of the Company’s common stock may be issued or delivered
pursuant to awards granted under the Restated 1995 Plan); (ii) change the share-counting provisions so that each
share issued in respect of restricted stock and other “full-value” awards under the Restated 1995 Plan will count
as 1.75 shares against the share limits; (iii) extend the Company’s ability to grant new awards under the Restated
1995 Plan until April 2, 2019; (iv) extend the Company’s authority to grant awards under the Restated 1995 Plan
intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the U.S.
Internal Revenue Code through the 2014 annual meeting of stockholders as well as to grant such performance-
based awards that would be payable only in cash; and (v) revise the performance criteria listed in Appendix A to
the Restated 1995 Plan for use in connection with such performance-based awards.
The 1995 Restated Plan provides for the issuance of a maximum of 754 million shares of which 114 million
shares were still available for issuance as of December 31, 2009.
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 5 million were still available for issuance as of
December 31, 2009. 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
exercisable, based on continued service as a director, in equal quarterly installments over one year. Such options
generally expire seven years after the grant date.
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