Yahoo 2013 Annual Report Download - page 116

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In June 2010, 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. That repurchase program, which by its
terms, would have expired in June 2013, was exhausted during the third quarter of 2012. In May 2012, the Board
authorized a stock repurchase program allowing the Company to repurchase up to an additional $5 billion of its
outstanding shares of common stock from time to time. The May 2012 repurchase program, according to its
terms, will expire in June 2015. In November 2013, the Board authorized an additional stock repurchase program
with an authorized level of $5 billion. The November 2013 program, according to its terms, will expire in
December 2016. Repurchases under the repurchase programs 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.
During the year ended December 31, 2012, the Company repurchased approximately 126 million shares of its
common stock under the June 2010 and May 2012 stock repurchase programs at an average price of $17.20 per
share for a total of $2.2 billion. The June 2010 program was exhausted during 2012. During the year ended
December 31, 2013, the Company repurchased approximately 129 million shares of its common stock under the
May 2012 stock repurchase programs at an average price of $25.95 per share for a total of $3.3 billion. These
repurchases included the Company’s repurchase of 40 million shares of its common stock beneficially owned by
Third Point LLC on July 25, 2013. These shares were repurchased pursuant to a purchase agreement entered into
on July 22, 2013, prior to the market opening for trading in Yahoo stock, and at $29.11 per share, which was the
closing price of the Company’s common stock on July 19, 2013. The total purchase price for these shares was
$1.2 billion. The repurchase transaction was funded primarily with cash as well as borrowings of $150 million
under the Company’s unsecured revolving credit facility that have been repaid. As of December 31, 2013, the
May 2012 program had remaining authorized purchase capacity of $93 million and the November 2013 program
had remaining authorized purchase capacity of $5 billion.
During the year ended December 31, 2012, the Company retired 79 million shares, resulting in reductions of
$79,000 in common stock, $631 million in additional paid-in capital, and $585 million in retained earnings.
During the year ended December 31, 2013, the Company retired 198 million shares, resulting in reductions of
$198,000 in common stock, $1.6 billion in additional paid-in capital, and $2.9 billion in retained earnings.
Treasury stock is accounted for under the cost method.
Note 14 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. Both employee and employer contributions vest immediately upon
contribution. During 2011, 2012, and 2013, the Company’s contributions to the 401(k) Plan amounted to
approximately $20 million, $19 million, and $18 million, respectively. The Company also contributed
approximately $24 million, $22 million, and $17 million to its other defined contribution retirement benefit plans
outside of the U.S. for 2011, 2012, and 2013, 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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