Yahoo 2014 Annual Report Download - page 143

(2) Includes the maximum number of shares issuable under the performance-based restricted stock
unit awards granted during the year ended December 31, 2014 (including future-year tranches
for which performance goals had not been set during the period); excludes tranches of
previously granted performance-based restricted stock units for which performance goals were
set during the year ended December 31, 2014.
As of December 31, 2014, there was $743 million of unamortized stock-based compensation expense
related to unvested restricted stock and restricted stock units, which is expected to be recognized
over a weighted average period of 2.4 years.
The total fair value of restricted stock awards vested during the years ended December 31, 2012,
2013, and 2014 was $171 million, $220 million, and $415 million, respectively.
During the year ended December 31, 2014, 19.0 million shares that were subject to previously granted
restricted stock units vested. These vested restricted stock awards were net share settled. The
Company withheld 7.1 million shares based upon the Company’s closing stock price on the vesting
date, to satisfy the Company’s tax withholding obligation relating to the employees’ minimum
statutory obligation for the applicable income and other employment taxes. The Company then
remitted cash to the appropriate taxing authorities.
Total payments for the employees’ tax obligations to the relevant taxing authorities were $281 million
for the year ended December 31, 2014 and are reflected as a financing activity within the
consolidated statements of cash flows. The payments were used for tax withholdings related to the
net share settlements of restricted stock units and tax withholding related to the reacquisition of
shares of restricted stock. The payments had the effect of share repurchases by the Company as they
reduced the number of shares that would have otherwise been issued on the vesting date and were
recorded as a reduction of additional paid-in capital.
In 2012, 2013, and 2014, $36 million, $64 million, and $150 million, respectively, of excess tax benefits
from stock-based awards for options exercised and restricted stock awards that vested in current
and prior periods were included as a source of cash flows from financing activities. These excess tax
benefits represent the reduction in income taxes otherwise payable during the period, attributable to
the actual gross tax benefits in excess of the expected tax benefits for options exercised and
restricted stock awards that vested in current and prior periods. The Company has accumulated
excess tax deductions relating to stock options exercised and restricted stock awards that vested
prior to January 1, 2006 available to reduce income taxes otherwise payable. To the extent such
deductions reduce income taxes payable in the current year, they are reported as financing activities
in the consolidated statements of cash flows.
Performance-Based Executive Incentive Equity Awards.
CEO 2012 Annual Equity Awards. Marissa A. Mayer, the Company’s Chief Executive Officer, received
an equity award for 2012 that will vest over three years. A total of $6 million of the grant date fair
value of this equity award was granted as restricted stock units on July 26, 2012 and will vest over
three years. The remaining portion of this equity award (valued at $6 million per the offer letter) was
granted in November 2012 as a performance-based stock option that will vest over the two and a half
years after July 26, 2012, subject to satisfaction of performance criteria. See below for additional
discussion of the performance-based stock options.
After 2012, Ms. Mayer is eligible to receive annual equity grants when such grants are made to senior
executives. Subject to the discretion of the Compensation and Leadership Development Committee
of the Board of Directors (the “Compensation Committee”), the Company contemplates that the
target value of such awards will not be less than the target value of her 2012 annual grant.
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