Yahoo 2012 Annual Report Download - page 115

value of $6.5 million on the date of grant (the “Thompson Make-Whole RSUs”). On February 10, 2012,
Mr. Thompson received a make-whole cash bonus of $1.5 million (the “Make-Whole Cash Bonus”). The
Thompson Make-Whole RSUs and the Make-Whole Cash Bonus compensated Mr. Thompson for the forfeiture
of the value of his cash bonus and equity awards from his previous employer. The Thompson Make-Whole RSUs
vested as to a number of stock units with a grant date value of $5.5 million on March 15, 2012 and the remaining
stock units were forfeited upon Mr. Thompson’s resignation as Yahoo!’s Chief Executive Officer and President
effective May 12, 2012.
The Company recorded total stock-based compensation expense of $6 million for year ended December 31, 2012
in connection with the equity grants made to Mr. Thompson pursuant to the terms of his employment letter
agreement with the Company.
Performance-Based Executive Incentive Equity Awards. In November 2012, the Compensation Committee
approved long-term performance-based stock options to Ms. Mayer and other senior officers that vest based on
the Company’s achievement of certain performance goals. The number of stock options which ultimately vest
will range from 0 percent to 100 percent of the target amount stated in each executive’s award agreement based
on the attainment of performance targets. The stock options generally will vest in equal installments over periods
ranging from six months to four and a half years based on the Company’s attainment of certain financial
performance targets as well as the executive’s continued employment through the vesting period. The financial
performance metrics (and their weightings) are revenue ex-TAC (50 percent), operating income (30 percent) and
free cash flow (20 percent), in each case subject to adjustments specified in the award agreements. The financial
performance targets for each metric are established at the beginning of each performance period and,
accordingly, the tranche of the award subject to each target is treated as a separate annual grant for accounting
purposes. In January 2013, financial performance targets were established for the first performance period (the
six months ending June 30, 2013) and the second performance period (the full year ending December 31, 2013).
The fair values of the first and second tranche of the November 2012 financial performance stock option grant
were $12 million and $14 million, respectively. The Company began recording stock-based compensation
expense in January 2013, when the financial performance targets were established and approved.
Note 14 R ESTRUCTURING C HARGES ,N ET
Restructuring charges, net consists of costs associated with the Restructuring Plans Prior to 2012, the Q2’12
Restructuring Plan, and the Q4’12 Korea Business Closure. These charges include employee severance pay and
related costs, accelerations and reversals of stock-based compensation expense, facility restructuring costs,
contract termination and other non-cash charges associated with the exit of facilities, as well as reversals of
restructuring charges arising from changes in estimates.
For the years ended December 31, 2010, 2011, and 2012, restructuring charges, net was comprised of the
following (in thousands):
101