Yahoo 2015 Annual Report Download - page 146

The fair value of option grants, including assumed options from acquisitions, 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,
2013 2014 2015 2013 2014
Expected dividend yield(1) 0% 0% 0% 0% 0%
Risk-free interest rate(2) 0.7% 1.4% 0.9% 0.1% 0%
Expected volatility(3) 33.3% 34.5% 34.5% 31.7% 36.8%
Expected life (in years)(4) 3.60 3.83 2.50 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 years in 2013 and 4 years in 2014. In 2015, the
Company did not issue new stock options. 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. During the first quarter of 2015, the Company discontinued
the offering of the Employee Stock Purchase Plan to its employees.
Restricted Stock and Restricted Stock Units. Restricted stock and restricted stock unit activity
under the Plans for the year ended December 31, 2015 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, 2014(1) 40,677 $32.38
Granted(2) 16,899 $41.53
Assumed in acquisitions —$—
Vested (16,969) $29.61
Forfeited (11,868) $32.99
Awarded and unvested at December 31, 2015(1) 28,739 $39.15
(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.
(2) Includes the maximum number of shares issuable under the performance-based restricted stock
unit awards granted during the year ended December 31, 2015 (including future-year tranches
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