Yahoo 2013 Annual Report Download - page 121

revenue ex-TAC (50 percent), operating income (30 percent) and free cash flow (20 percent). The financial
performance goals for each metric are established at the beginning of each performance period and, accordingly,
the portion (or “tranche”) of the award related to each performance period is treated as a separate grant for
accounting purposes. The grant date fair values of the first and second tranches of the November 2012 financial
performance stock options were $12 million and $14 million, respectively, and are being recognized over six and
twelve month service periods, respectively. The Company began recording stock-based compensation expense
for these tranches in January 2013, at the grant date, when the financial performance goals were established and
approved.
In February 2013, the Compensation Committee approved additional long-term performance-based incentive
equity awards to Ms. Mayer and other senior officers. These restricted stock units generally will be eligible to
vest in equal annual tranches over four years (three years for Ms. Mayer) based on the Company’s attainment of
annual financial performance goals as well as the executive’s continued employment through the vesting date.
The number of restricted stock units that ultimately vest each year will range from 0 percent to 200 percent of the
annual target amount stated in each executive’s award agreement based on the Company’s performance. The
annual financial performance metrics and goals are established at the beginning of each fiscal year and,
accordingly, the tranche of the award related to each annual performance period goal is treated as a separate
annual grant for accounting purposes. In February 2013, financial performance metrics and goals were
established for the first performance period (the fiscal year ending December 31, 2013). The financial
performance metrics (and their weightings) for fiscal year 2013 are revenue ex-TAC (60 percent), operating
income (20 percent) and free cash flow (20 percent). The grant date fair value of the first tranche of the February
2013 annual financial performance restricted stock unit grants was $9 million and is being recognized over a one-
year service period.
Note 15 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, the Q4’12 Korea Business Closure and the Q4’13 Restructuring Plan. 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, 2011, 2012, and 2013, restructuring charges, net was comprised of the
following (in thousands):
Year Ended
December 31,
2011 Year Ended December 31, 2012
Restructuring
Plans Prior
to
2012
Restructuring
Plans Prior
to
2012
Q2’12
Restructuring
Plan
Q4’12
Korea Business
Closure Total
Employee severance pay and related
costs ............................ $12,965 $1,169 $ 96,537 $ 4,998 $102,704
Non-cancelable lease, contract
terminations, and other charges ....... 10,251 8,462 9,541 8,996 26,999
Other non-cash charges, net ............ 990 — 40,462 69,434 109,896
Sub-total before accelerations (reversals)
of stock-based compensation
expense ......................... 24,206 9,631 146,540 83,428 239,599
Accelerations (reversals) of stock-based
compensation expense .............. 214 — (3,429) — (3,429)
Restructuring charges, net ......... $24,420 $9,631 $143,111 $83,428 $236,170
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