Yahoo 2013 Annual Report Download - page 117

The 1995 Stock Plan permits the granting of restricted stock and restricted stock units (collectively referred to as
“restricted stock awards”). The restricted stock award vesting criteria are generally the passing of time, meeting
certain performance-based objectives, or a combination of both, and continued employment through the vesting
period (which varies but generally does not exceed four years). Restricted stock award grants are generally
measured at fair value on the date of grant based on the number of shares granted and the quoted price of the
Company’s common stock. Such value is recognized as an expense over the corresponding service period.
The 1995 Stock Plan provides for the issuance of a maximum of 754 million shares of which 65 million shares
were still available for award grant purposes as of December 31, 2013. Each share of the Company’s common
stock issued in settlement of “full-value awards” (which include all awards other than options and stock
appreciation rights) granted on or after June 25, 2009 under the 1995 Stock Plan is counted as 1.75 shares against
the 1995 Stock Plan’s share limit.
The Directors’ Plan provides for the grant of nonqualified stock options and restricted stock units to non-
employee directors of the Company. The Directors’ Plan provides for the issuance of up to 9 million shares of the
Company’s common stock, of which approximately 5 million were still available for award grant purposes as of
December 31, 2013. Each share of the Company’s common stock issued in settlement of restricted stock units
granted after the Company’s 2006 annual meeting of shareholders under the Directors’ Plan is counted as 1.75
shares against the Directors’ Plan’s share limit.
Options granted under the Directors’ Plan before May 25, 2006 generally become exercisable, based on
continued service as a director, for initial grants to new directors, in equal monthly installments over four years,
and for annual grants, with 25 percent of such options vesting on the one year anniversary of the date of grant
and the remaining options vesting in equal monthly installments over the remaining 36-month period thereafter.
Such options generally expire seven to 10 years after the grant date. Options granted on or after May 25, 2006
become exercisable, based on continued service as a director, in equal quarterly installments over one year. Such
options generally expire seven years after the grant date.
Restricted stock units granted under the Directors’ Plan generally vest in equal quarterly installments over a one-
year period following the date of grant and, once vested, are generally payable in an equal number of shares of
the Company’s common stock on the earlier of the end of the one-year vesting period or the date the director
ceases to be a member of the Board (subject to any deferral election that may be made by the director).
Non-employee directors are also permitted to elect an award of restricted stock units or a stock option under the
Directors’ Plan in lieu of a cash payment of their quarterly Board retainer and any cash fees for serving on
committees of the Board. Such stock options or restricted stock unit awards granted in lieu of cash fees are fully
vested on the grant date.
From time to time the Company also assumes stock-based awards in connection with corporate mergers and
acquisitions, which awards become payable in shares of the Company’s common stock.
Employee Stock Purchase Plan. The Employee Stock Purchase Plan allows employees to purchase shares of the
Company’s common stock through payroll deductions of up to 15 percent of their compensation subject to
certain Internal Revenue Code limitations. Prior to November 2012, the price of common stock purchased under
the plan was equal to 85 percent of the lower of the fair market value of the common stock on the
commencement date of each 24-month offering period or the specified purchase date. Beginning in November
2012, the Employee Stock Purchase Plan was modified to consist of three-month offering periods. The price of
the common stock purchased under the plan after November 2012 will be equal to 90 percent of the lower of the
fair market value of the common stock on the commencement date of each three-month offering period or the
specified purchase date.
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