Yahoo 2011 Annual Report Download - page 98

Note 10 S TOCKHOLDERS ’E QUITY
The Board has the authority to issue up to 10 million shares of 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.
Stock Repurchases. 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.
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 five-year period following its
authorization, dependent on market conditions, stock price, and other factors. Under the program, repurchases
could take place in the open market or in privately negotiated transactions, including derivative transactions, and
could be made under a Rule 10b5-1 plan. The Company exhausted its authority to repurchase shares of the
Company’s common stock under this program in July 2010.
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, 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. During the year ended December 31, 2011, 110 million shares were repurchased under the June 2010
program for a total of $1,619 million at an average price of $14.75 per share. As of December 31, 2011, the June
2010 program had remaining authorized purchase capacity of $605 million.
During the year ended December 31, 2010, the Company had 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. During the year ended December 31, 2011, the Company has repurchased and retired
82 million shares, resulting in reductions of $82 thousand in common stock, $643 million in additional paid-in
capital, and $559 million in retained earnings. Treasury stock is accounted for under the cost method.
Note 11 E MPLOYEE B ENEFITS
Benefit Plans. The Company maintains the 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,
up to the IRS prescribed amount. For 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 2009, 2010, and 2011,
the Company’s contributions to the 401(k) Plan amounted to approximately $18 million, $21 million, and $20
million, respectively. The Company also contributed approximately $20 million, $23 million, and $24 million to
its other retirement benefit plans outside of the U.S. for 2009, 2010, and 2011, 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.
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