Yahoo 2010 Annual Report Download - page 92

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 its stock options, awards, and employee stock purchase plan.
Stock Repurchases. In October 2006, the Board authorized a stock repurchase program allowing the Company to
repurchase up to $3 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.
On June 24, 2010, the Board approved a new stock repurchase program. Under the new program, which expires
in June 2013, the Company is authorized to repurchase up to $3 billion of its outstanding shares of common stock
from time to time. The 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 the October 2006 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 the
October 2006 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. During the
year ended December 31, 2010, 63 million shares were repurchased under the October 2006 program for a total of
$973 million, which exhausted the repurchase under the October 2006 program, and 56 million shares were
repurchased under the June 2010 program for a total of $776 million, resulting in aggregate repurchases during the
period of 119 million shares for a total of $1,749 million at an average price of $14.68 per share. As of
December 31, 2010, the June 2010 program had remaining authorized purchase capacity of $2,224 million.
As of December 31, 2010, the Company has repurchased and retired 335 million shares, resulting in reductions
of $0.3 million in common stock, $2.5 billion in additional paid-in capital, and $4.6 billion in retained earnings.
Treasury stock is accounted for under the cost method.
Note 11 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. During
2008 and 2009, employee contributions were fully vested, whereas vesting in matching Company contributions
occurred at a rate of 33 percent per year of employment. Beginning in 2010, both employee and employer
contributions vest immediately upon contribution. During 2008, 2009, and 2010, the Company’s contributions to
the 401(k) Plan amounted to approximately $21 million, $18 million, and $21 million, respectively. The
Company also contributed approximately $26 million, $20 million, and $23 million to its other benefit plans
outside of the U.S. for 2008, 2009, and 2010, respectively.
Stock Plans. The 1995 Stock Plan provides for the issuance of stock-based awards to employees, including
executive officers, and consultants. The 1995 Stock 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 Stock 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.
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