Yahoo 2009 Annual Report Download - page 103

Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
Restricted stock units granted under the Directors’ Plan generally vest in equal quarterly installments over a one
year period following the date of grant and, once vested, are generally payable in an equal number of shares of
the Company’s common stock on the earlier of the third anniversary of the grant date or the date the director
ceases to be a member of the Board.
Non-employee directors are also permitted to elect an award of restricted stock units or a stock option under the
Directors’ Plan in lieu of a cash payment of fees for serving as chairperson of a committee of the Board. Such stock
options or restricted stock unit awards granted in lieu of cash for chairperson fees are fully vested on the grant date.
Employee Stock Purchase Plan. The Company’s 1996 Employee Stock Purchase Plan allows employees to
purchase shares of the Company’s common stock through payroll deductions of up to 15 percent of their annual
compensation subject to certain Internal Revenue Code limitations. The price of common stock purchased under
the 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.
During 2009, the Board adopted an amended and restated version of the Purchase Plan (“the Restated Purchase
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 Purchase Plan. Among
other things, the Restated Purchase Plan reflects amendments to (i) increase the number of shares authorized for
issuance under the Restated Purchase Plan by 30 million shares (so that the maximum aggregate number of shares
that may be issued under the Restated Purchase Plan would increase to 75 million shares); and (ii) extend the term
of the Restated Purchase Plan so that no new offering period would commence after May 10, 2029.
The Restated Purchase Plan provides for the issuance of a maximum of 75 million shares of common stock of
which 40 million shares were available as of December 31, 2009. For the years ended December 31, 2007, 2008,
and 2009, stock-based compensation expense related to the activity under the plan was $48 million, $52 million,
and $55 million, respectively. As of December 31, 2009, there was $21 million of unamortized stock-based
compensation cost related to the Restated Purchase Plan which will be recognized over a weighted average
period of 0.7 years.
The Company’s Restated 1995 Plan, the Directors’ Plan, and other stock-based award plans assumed through
acquisitions are collectively referred to as the “Plans.” Stock option activity under the Company’s Plans is
summarized as follows (in thousands, except years and per share amounts):
Shares
Weighted Average
Exercise Price per
Share
Weighted Average
Remaining
Contractual Life
(in years)
Aggregate
Intrinsic Value
Outstanding at December 31, 2008 ................. 135,442 $30.10 3.88 $ 89,688
Options granted ................................ 30,010 $12.91
Options exercised(1) ............................. (5,376) $ 5.72
Options cancelled/forfeited ....................... (13,264) $23.74
Options expired ................................ (27,219) $38.22
Outstanding at December 31, 2009 ................. 119,593 $25.74 3.78 $209,807
Vested and expected to vest at December 31, 2009(2) . . . 113,706 $26.02 3.67 $194,215
Exercisable at December 31, 2009 ................. 76,551 $29.75 2.78 $103,672
(1) The Company issued new shares to satisfy stock option exercises.
(2) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to total
outstanding options.
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