Yahoo 2015 Annual Report Download - page 144

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, 2015. 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.During the first quarter of 2015, the Company discontinued the
offering of the Employee Stock Purchase Plan to its employees. The Employee Stock Purchase Plan
allowed 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 was 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.
For the years ended December 31, 2013, 2014, and 2015, stock-based compensation expense related
to the activity under the plan was $16 million, $12 million, and $2 million, respectively. As of
December 31, 2015, there was no unamortized stock-based compensation expense related to the
Company’s Employee Stock Purchase Plan.
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