Yahoo 2014 Annual Report Download - page 142

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The total net tax benefit attributable to stock options exercised in the year ended December 31, 2014
was $51 million.
The fair value of option grants is determined using the Black-Scholes option pricing model with the
following weighted average assumptions:
Stock Options Purchase Plan(5)
Years Ended December 31, Years Ended December 31,
2012 2013 2014 2012 2013 2014
Expected dividend yield(1)
0% 0% 0% 0% 0% 0%
Risk-free interest rate(2)
0.6% 0.7% 1.4% 0.4% 0.1% 0%
Expected volatility(3)
31.9% 33.3% 34.5% 33.7% 31.7% 36.8%
Expected life (in years)(4)
4.02 3.60 3.83 1.21 0.25 0.25
(1) The Company currently has no history or expectation of paying cash dividends on its common
stock in the near future.
(2) The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the
expected term of the awards in effect at the time of grant.
(3) The Company estimates the volatility of its common stock at the date of grant based on the
implied volatility of publicly traded options on its common stock, with a term of one year or
greater.
(4) The expected life of stock options granted under the Plans is based on historical exercise
patterns, which the Company believes are representative of future behavior. New grants issued
by the Company had an expected life of 4.00 years in 2012, 4.00 years in 2013, and 4.00 years
in 2014. Options assumed in acquisitions had expected lives of less than 3 years.
(5) Assumptions for the Employee Stock Purchase Plan relate to the annual average of the
enrollment periods. During the year ended December 31, 2012, enrollment was permitted in May
and November of each year. Beginning in 2013, enrollment was permitted in February, May,
August, and November of each year.
Restricted Stock and Restricted Stock Units. Restricted stock and restricted stock unit activity
under the Plans for the year ended December 31, 2014 is summarized as follows (in thousands, except
per share amounts):
Shares
Weighted Average
Grant Date Fair Value
Per Share
Awarded and unvested at December 31, 2013(1)
49,584 $24.20
Granted(2)
17,005 $39.18
Assumed in acquisitions
277 $40.85
Vested
(18,959) $20.31
Forfeited
(7,230) $24.20
Awarded and unvested at December 31, 2014(1)
40,677 $32.38
(1) Includes the maximum number of shares issuable under the Company’s performance-based
restricted stock unit awards (including future-year tranches for which performance goals had
not been set) as of the date shown.
138