Yahoo 1998 Annual Report Download - page 54

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The following table summarizes information concerning outstanding and exercis-
able options at December 31, 1998 (in thousands, except per share amounts):
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Average Average Average
Remaining Exercise Exercise
Range of Number Contractual Price Number Price
Exercise Prices Outstanding Life (in years) per Share Exercisable per Share
less than $0.01 8,002 6.6 $ 0.00 5,187 $ 0.00
$0.03 - $1.17 6,473 7.1 0.60 3,141 0.69
$1.25 - $3.21 5,940 7.6 2.57 1,765 2.53
$3.33 - $8.08 5,518 8.3 5.41 912 5.15
$10.78 - $13.47 7,711 8.9 12.96 1,766 13.09
$13.94 - $29.14 6,100 9.2 20.58 141 14.41
$30.38 - $57.75 6,481 9.6 47.12 – –
$62.41 - $135.00 6,624 9.9 95.89 – –
52,849 8.4 $ 22.99 12,912 $ 2.83
Options to purchase approximately 7.9 million shares and 3.3 million shares were
vested at December 31, 1997 and 1996, respectively. The weighted average exercise
prices per share for options vested at December 31, 1997 and 1996 were $0.99 and
less than $0.01, respectively. Through December 31, 1998, Yahoo! and certain
acquired entities recorded compensation expense related to certain stock options
issued with exercise prices below the fair market value of the related common stock.
The Company recorded compensation expense in the amount of $926,000, $1,215,000,
and $164,000 in 1998, 1997, and 1996, respectively. Approximately $1,017,000
remains to be amortized over the remaining vesting periods of the options.
Employee Stock Purchase Plan. Effective March 6, 1996, the Company’s Board of
Directors adopted the Employee Stock Purchase Plan (the “Purchase Plan”), which
provides for the issuance of a maximum of 1,800,000 shares of Common Stock.
Eligible employees can have up to 15% of their earnings withheld, up to certain
maximums, to be used to purchase shares of the Company’s Common Stock on
every December 31st and J une 30th. The price of the Common Stock purchased
under the Purchase Plan will be equal to 85% of the lower of the fair market value
of the Common Stock on the commencement date of each six-month offering period
or the specified purchase date. During 1998, 126,000 shares were purchased at
prices from $14.72 to $36.10 per share. During 1997, 537,000 shares were purchased
at prices from $1.85 to $4.83 per share. There were no shares issued under the
Purchase Plan during 1996. At December 31, 1998, 1,137,000 shares were available
under the Purchase Plan for future issuance.
Stock Compensation. The Company accounts for stock-based compensation in accor-
dance with the provisions of APB 25. Had compensation expense been determined
based on the fair value at the grant dates, as prescribed in SFAS 123, the Company’s
results would have been as follows (in thousands, except per share amounts):
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