Yahoo 2010 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2010 Yahoo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

The Company’s 1995 Stock 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, 2009 .............. 119,593 $25.74 3.78 $209,807
Options granted ............................. 11,138 $14.85
Options assumed ............................ 649 $ 2.27
Options exercised(1) .......................... (7,629) $ 9.36
Options cancelled/forfeited .................... (10,424) $17.90
Options expired ............................. (32,351) $37.21
Outstanding at December 31, 2010 .............. 80,976 $22.02 3.87 $147,887
Vested and expected to vest at December 31,
2010(2) ................................... 77,203 $22.19 3.78 $138,988
Exercisable at December 31, 2010 ............... 52,671 $24.83 3.05 $ 82,158
(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.
The weighted average grant date fair value of options granted in the years ended December 31, 2008, 2009, and
2010 was $7.66, $5.59, and $5.27 per share, respectively.
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate
difference between the closing stock price of the Company’s common stock on December 31, 2010 and the
exercise price for in-the-money options) that would have been received by the option holders if all in-the-money
options had been exercised on December 31, 2010.
The total intrinsic value of options exercised in the years ended December 31, 2008, 2009, and 2010 was $233
million, $51 million, and $49 million, respectively.
As of December 31, 2010, there was $115 million of unamortized stock-based compensation expense related to
unvested stock options, which is expected to be recognized over a weighted average period of 2.3 years.
Cash received from option exercises and purchases of shares under the Employee Stock Purchase Plan for the
year ended December 31, 2010 was $167 million.
The total tax benefit attributable to stock options exercised in the year ended December 31, 2010 was $72
million.
The fair value of option grants is determined using the Black-Scholes option pricing model with the following
weighted average assumptions:
Stock Options Purchase Plans(5)
Years Ended December 31, Years Ended December 31,
2008 2009 2010 2008 2009 2010
Expected dividend yield(1) ............................ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Risk-free interest rate(2) .............................. 2.6% 1.9% 1.6% 2.4% 2.7% 2.1%
Expected volatility(3) ................................ 47.4% 45.8% 34.7% 71.8% 63.2% 60.5%
Expected life (in years)(4) ............................ 3.97 4.00 4.06 1.15 1.04 0.55
(1) The Company currently has no history or expectation of paying cash dividends on its common stock.
92