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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K


Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

December 10, 2013

YANDEX N.V.

Laan Copes van Cattenburch 52
The Hague, the Netherlands, 2585 GB. Tel: +31-70-3454700

(Address, Including ZIP Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F   X      Form 40-F             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) :                          

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) :                          

   


Filed as Exhibit 99.1 to this Report on Form 6-K are the Amended Articles of Association of Yandex N.V. (the "Company"), dated May 22, 2013.

Furnished as Exhibit 99.2 to this Report on Form 6-K are the unaudited condensed consolidated financial statements for the three and nine months periods ended September 30, 2013 and 2012; as Exhibit 99.3 to this Report on Form 6-K is "Management's Discussion and Analysis of Financial Condition and Results of Operations" with respect to the nine months ended September 30, 2013; and as Exhibit 99.4 to this Report on Form 6-K are certain Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable U.S. GAAP Measures.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    YANDEX N.V.

 

 

By:

 

/s/ ALEXANDER SHULGIN

Alexander Shulgin
Chief Financial Officer

Date: December 10, 2013



INDEX TO EXHIBITS

Number
  Description

99.1

  Amended Articles of Association of Yandex N.V., dated May 22, 2013.

99.2

 

Unaudited condensed consolidated financial statements for the three and nine months periods ended September 30, 2013 and 2012.

99.3

 

Management's Discussion and Analysis of Financial Condition and Results of Operations with respect to the nine months ended September 30, 2013.

99.4

 

Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable U.S. GAAP Measures.




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Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
SIGNATURES
INDEX TO EXHIBITS

EXHIBIT 99.1

 

VAN DOORNE N.V.

 

TB/SH/60007213

 

In this translation an attempt has been made to be as literal as possible without jeopardising the overall continuity. Inevitably, differences may occur in translation, and if so, the Dutch text will by law govern

 

AMENDMENT TO THE ARTICLES OF ASSOCIATION OF YANDEX N.V.

 

Today, the twenty-second day of May two thousand and thirteen, appears before me, Siego Boslooper, candidate civil-law notary, hereinafter referred to as: “civil-law notary”, acting as deputy of Daan ter Braak, civil-law notary practising in Amsterdam (the Netherlands):

 

Sanne Elizabeth Hermans, born in Den Helder (the Netherlands) on the thirtieth day of June nineteen hundred eighty-four, with office address at Jachthavenweg 121, 1081 KM Amsterdam (the Netherlands).

 

The appearer declares that:

 

·                                the general meeting of shareholders of Yandex N.V., a company limited by shares (naamloze vennootschap) incorporated under the laws of the Netherlands, having its registered office in ‘s-Gravenhage (the Netherlands) and its business office at Laan Copes van Cattenburch 52, 2585 GB ‘s-Gravenhage (the Netherlands), registered with the trade register of the Chambers of Commerce under number 27265167 (the “Company”), has resolved on the twenty-first day of May two thousand and thirteen to (i) amend the articles of association of the company as stated hereinafter and (ii) authorise the appearer to execute this deed, which resolutions appear from the shareholders’ resolution attached to this deed as Exhibit I;

 

·                                the articles of association of the company were established by deed of amendment, executed on the twenty-first day of May two thousand and twelve, by me, civil-law notary.

 

In order to carry out the (legal) acts contemplated in the shareholders’ resolution, the appearer, acting in the aforementioned capacity, declares to amend the articles of association of the company as follows:

 

ARTICLES OF ASSOCIATION

 

Definitions.

 

Article 1.

 

1.                           In the Articles of Association the following words and expressions shall have the meaning hereby assigned to them:

 

a.                            Affiliate” means, with respect to an Initial Qualified Holder that is not a natural person: (a) a natural person or legal entity that, directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Initial Qualified Holder (a “Direct Affiliate”); (b) subject to the limitations set forth in the fourth paragraph of this definition, any direct or

 



 

indirect beneficial holder (as of the tenth day of October two thousand and eight) of the securities or other membership interests of (x) any Initial Qualified Holder or (y) any party that was (as of the tenth day of October two thousand and eight) a Direct Affiliate of such Initial Qualified Holder, in each case to the extent of its pro rata beneficial interest in the Class B Ordinary Shares held directly or indirectly by such Initial Qualified Holder or Direct Affiliate as of the tenth day of October two thousand and eight (a “Qualified Beneficial Holder”), (c) any legal entity that is under common investment control with, or acts solely as bare nominee holder on behalf of, such Initial Qualified Holder, any Direct Affiliate or any Qualified Beneficial Holder, and (d) where such Initial Qualified Holder is an estate or tax planning vehicle (including a trust, corporation and partnership) any direct or indirect beneficiary thereof (as of the tenth day of October two thousand and eight) to the extent of its pro rata beneficial interest in the Class B Ordinary Shares held by such Initial Qualified Holder as of the tenth day of October two thousand and eight.

 

The term “control” shall mean the ownership, directly or indirectly, of shares possessing more than fifty percent (50%) of the voting power of a legal entity, or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such legal entity; provided that, for purposes of clause (a) of the first paragraph of this definition, all voting power held by entities under common control (including investment funds under common investment control) shall be aggregated together and attributed to each other such entity under common control for the purpose of determining the voting power percentage of each such entity.

 

The term “investment control” shall mean, with respect to any person, the possession, directly or indirectly (whether through the ownership of voting securities, by contract or otherwise), of the sole and exclusive power to direct or cause the direction of the voting or disposition of all securities held by such person.  Two entities shall be considered to be under common investment control if they are subject to investment control by the same party.

 

Notwithstanding the foregoing, (x) in no event shall a limited partner of (or comparable passive investor in) any entity be deemed to be an Affiliate of such entity pursuant to clauses (b) and (c) of the first paragraph of this definition; (y) a party shall cease to qualify as an Affiliate for purposes of clause (a) of the first paragraph of this definition if it ceases to control, be controlled by, or be under common control with, such Initial Qualified Holder; and (z) a party shall cease to qualify as an Affiliate for purposes of clause (c) of the first paragraph of this definition if it ceases to be under common investment control with, or to act as bare nominee for, such Initial Qualified Holder, Direct Affiliate or Qualified Beneficial Holder.  For the avoidance of doubt, any entity incorporated, formed, organized, created or acquired after the tenth day of October two thousand and eight shall itself be eligible to meet the definition of Affiliate for purposes hereof;

 

b.                            Affiliated Party” means: with respect to any party, any other natural person or legal entity that (a) directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such party (and/or, in the case of any Initial Qualified Holder, any Affiliate of such Initial Qualified Holder), (b) is acting in concert with such party (and/or, in the case of any Initial

 

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Qualified Holder, any Affiliate of such Initial Qualified Holder) pursuant to a voting agreement or other formal arrangement with respect to the acquisition, disposition or voting of Shares (other than the Shareholders Agreement) or (c) is a pledgee of Ordinary Shares held by such party (and/or, in the case of any Initial Qualified Holder, any Affiliate of such Initial Qualified Holder) that is entitled to exercise the voting rights pertaining to such Ordinary Shares.  For purposes hereof, the term “control” shall have the meaning set forth in the definition of Affiliate;

 

c.                             Articles of Association” means: the articles of association of the Company in their current form and as amended from time to time;

 

d.                            Book 2” means: Book 2 of the Dutch Civil Code;

 

e.                             Board of Directors” means: the body of persons/individual person(s) controlling the management of the Company’s business consisting of Executive Directors and Non-Executive Directors as referred to in Article 12;

 

f.                              Class A Ordinary Shares” means: class A ordinary shares in the capital of the Company;

 

g.                             Class B Ordinary Shares” means: class B ordinary shares in the capital of the Company;

 

h.                            Class C Ordinary Shares” means: class C ordinary shares in the capital of the Company;

 

i.                                Company” means: the corporate legal entity governed by these Articles of Association;

 

j.                               Conversion Foundation” means: Stichting Yandex Conversion, a foundation incorporated under Dutch law with statutory seat in The Hague and its business office at Laan Copes van Cattenburch 52, 2585 GB The Hague (the Netherlands);

 

k.                            Direct Affiliate” has the meaning giving to such term in the definition of Affiliate;

 

l.                                Excess Shares” means:  any Ordinary Shares held or to be acquired or subscribed for in excess of the applicable Ownership Cap;

 

m.                        Executive Director” means: a member of the Board of Directors being appointed as executive director (uitvoerend bestuurder) and as such entrusted with the responsibility for the day-to-day management of the Company;

 

n.                            General Meeting” means: the members constituting the general meeting, and also: meetings of that body of members;

 

o.                            Initial Qualified Holder” means, in relation to any Class B Ordinary Share: (a) the person holding such Class B Ordinary Share pursuant to the conversion into Class B Ordinary Shares of ordinary shares in the capital of the Company on the tenth day of October two thousand eight and (b) any party that was a record holder of Internet Search Investments Limited (“ISIL”), a Bermuda company, as of the twenty-sixth day of August two thousand and eight and has Class B Ordinary Shares distributed to it by ISIL prior to the execution of this Deed pro rata to such party’s beneficial indirect interest in the Company on the twenty-sixth day of August two thousand and eight;

 

p.                            Meeting of holders of Class A Ordinary Shares” means: the meeting of holders of Class A Ordinary Shares;

 

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q.                            Meeting of holders of Class B Ordinary Shares” means: the meeting of holders of Class B Ordinary Shares;

 

r.                               Meeting of holders of Class C Ordinary Shares” means: the meeting of holders of Class C Ordinary Shares;

 

s.                              Meeting of holders of Preference Shares” means: the meeting of holders of Preference Shares;

 

t.                               Meeting of the holder of the Priority Share” means: the meeting of the holder of the Priority Share;

 

u.                            Non-Executive Director” means: a member of the Board of the Directors appointed as non-executive director (niet-uitvoerend bestuurder) not being entrusted with the responsibility for the day-to-day management of the Company;

 

v.                            Non-Qualified B Holder” with respect to any Class B Ordinary Share, means: anyone who is not a Qualified B Holder of such Class B Ordinary Share or ceases to be a Qualified B Holder of such Class B Ordinary Share (including, for the avoidance of doubt, a legal holder of a Class B Ordinary Share that has Transferred such Class B Ordinary Share other than to a Permitted Transferee);

 

w.                          Ordinary Shares” means: Class A Ordinary Shares, Class B Ordinary Shares and Class C Ordinary Shares;

 

x.                            Ownership Cap” means:  the lesser of (a) twenty-five percent (25%) of the voting rights pertaining to the issued Class A Ordinary Shares and Class B Ordinary Shares (taken together) of the Company from time to time or (b) twenty-five percent (25%) of the number of issued Class A Ordinary Shares and Class B Ordinary Shares (taken together) from time to time.

 

Notwithstanding the foregoing, (x) in the event that both the Board of Directors and the Priority have approved a holding of Excess Shares by a party as a result of a Triggering Event pursuant to the terms of the Articles of Association, the Ownership Cap in respect of such party, together with its Affiliated Parties, shall, following the date of such approval, be increased by the number of Excess Shares so approved; and (y) in the event of an increase in a Shareholder’s proportionate ownership or voting interest occurring solely as a result of changes in the share capital structure of the Company (including, without limitation, share splits, capital reorganisations, share dividends, share repurchases, conversions of Class B Ordinary Shares pursuant to the terms of Article 4B, and similar events or transactions), the Ownership Cap in respect of such Shareholder, together with its Affiliated Parties, shall, following the date of such event, be increased by the number of Excess Shares resulting from such event;

 

y.                            Permitted Transferee” in relation to any Class B Ordinary Share held by an Initial Qualified Holder means:

 

(i)                          such Initial Qualified Holder (as transferee of any Class B Ordinary Share retransferred to such Initial Qualified Holder from its Permitted Transferee);

 

(ii)                       with respect to any such Initial Qualified Holder that is a natural person, any estate or tax planning vehicle (including a trust, corporation and partnership), the beneficiaries of which include such Initial Qualified Holder and/or members of the immediate family of such Initial Qualified

 

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Holder, provided that such Initial Qualified Holder retains (subject to any community or spousal property laws) sole voting and dispositive power over such Class B Ordinary Share, and provided further that the Transfer to such estate or tax planning vehicle does not involve payment of any consideration (other than the interest in such trust, corporation, partnership or other estate or tax planning vehicle); and

 

(iii)                    with respect to any such Initial Qualified Holder that is not a natural person, any Affiliate of such Initial Qualified Holder; provided however that any such party that ceases to be an Affiliate shall cease to be a Permitted Transferee.

 

For purposes of the definition of “Triggering Event”, each reference to “Class B Ordinary Shares” in the foregoing definition (and in the definition of each term used therein) shall be deemed to be a reference to “Ordinary Shares”;

 

z.                             Potential Acquiror” has the meaning set forth in paragraph 11 of Article 4C;

 

aa.                     Preference Shares” means: preference shares in the capital of the Company;

 

bb.                     Priority” means: the corporate body (orgaan) constituted by the Meeting of holder of the Priority Share;

 

cc.                       Priority Share” means: the priority share in the capital of the Company;

 

dd.                     Qualified B Holder” means, in relation to any Class B Ordinary Share: the Company, the Initial Qualified Holder of such Class B Ordinary Share and any Permitted Transferee thereof, in each case provided that (i) such person has become a party to, and is not in material continuing breach of, the Shareholders Agreement and (ii) such Class B Ordinary Share has not been Transferred (including by way of a transfer of the legal holder thereof), other than to a Permitted Transferee;

 

ee.                       Qualified Beneficial Holder” has the meaning giving to such term in the definition of Affiliate;

 

ff.                         Shares” means: Ordinary Shares, the Priority Share and Preference Shares;

 

gg.                       Shareholder(s)” means: any holder(s) of Shares;

 

hh.                     Shareholders Agreement” means: the shareholders agreement among the holders of Ordinary Shares and the Conversion Foundation, dated as of the fourteenth day of October two thousand eight, as amended from time to time in accordance with the terms thereof;

 

ii.                             Subsidiary(ies)” means: (a) subsidiary(ies) (dochtermaatschappij(en)) as defined in section 24a of Book 2; and

 

jj.                           Transfer” when used in relation to an Ordinary Share, means: any direct or indirect sale, assignment, transfer under general or specific title (algemene of bijzondere titel), conveyance, grant of any form of security interest (other than as explicitly provided in this definition), or other transfer or disposition of an Ordinary Share or any legal or beneficial interest therein, whether or not for value and whether voluntary or involuntary or by operation of law. A  “Transfer” of an Ordinary Share shall also include, without limitation, the transfer of, or entering into a binding agreement with respect to, voting control over an Ordinary Share by proxy or otherwise; provided, however, that the following shall not be considered a  “Transfer” of an Ordinary Share: (a) the granting of a power of attorney to persons designated by the Board of Directors of the Company in connection with actions to be taken at a General Meeting of

 

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Shareholders; (b) entering into the Shareholders Agreement or any amendment thereof; (c) solely with respect to Class B Ordinary Shares, the entering into or amendment, solely by and among a Qualified B Holder and one or more of its Permitted Transferees, of a binding agreement with respect to voting control over a Class B Ordinary Share; or (d) solely with respect to Class B Ordinary Shares, the pledge of Class B Ordinary Shares by a Qualified B Holder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction so long as the Qualified B Holder continues to exercise voting control over such pledged shares; provided, however, that a foreclosure on such Ordinary Shares or other similar action by the pledgee shall constitute a “Transfer” of an Ordinary Share; and

 

kk.                     Triggering Event” means: any direct or indirect Transfer of Ordinary Shares after the twenty-sixth day of August two thousand and nine (other than to a Permitted Transferee of such Ordinary Shares) or acquisition of Shares (including by Transfer or subscription and, for the avoidance of doubt, as a result of a change of control of, or a merger or business combination involving, one or more legal or beneficial owners of a Share).  For the avoidance of doubt, the term Triggering Event excludes changes in proportionate ownership or voting interest occurring solely as a result of changes in the share capital structure of the Company (including, without limitation, share splits, capital reorganisations, share dividends, share repurchases, conversions of Class B Ordinary Shares pursuant to the terms of Article 4B, and similar events or transactions).

 

2.                           The expressions “written” and “in writing” used in these Articles of Association mean: communications sent by post, telefax, e-mail or by any other means of telecommunication capable of transmitting written text, unless Dutch statutory law prescribes otherwise.

 

Name and Registered Office.

 

Article 2.

 

1.                           The Company is a limited liability company and its name is: Yandex N.V.

 

2.                           The Company has its registered office in Amsterdam (the Netherlands).

 

The Company may have branch offices elsewhere, also outside of the Netherlands.

 

Objects.

 

Article 3.

 

1.                           The objects for which the Company is established are:

 

a.                            either alone or jointly with others to acquire and dispose of participations or other interests in bodies corporate, companies and enterprises, to collaborate with and to manage such bodies corporate, companies or enterprises;

 

b.                            to acquire, manage, turn to account, encumber and dispose of any property - including intellectual property rights - and to invest capital;

 

c.                             to supply or procure the supply of money loans, particularly - but not exclusively - loans to bodies corporate and companies which are Subsidiaries and/or affiliates of the Company or in which the Company holds any interest - all this subject to the provision in paragraph 2 of this Article - , as well as to draw or to procure the drawing of money loans;

 

d.                            to enter into agreements whereby the Company grants security, commits itself as guarantor or severally liable co-debtor, or declares itself jointly or severally

 

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liable with or for others, particularly - but not exclusively - to the benefit of bodies corporate and companies as referred to above under c;

 

e.                             to do all such things as are incidental or conducive to the above objects or any of them.

 

2.                           The Company may not grant security, give price guarantees, commit itself in any other way or declare itself jointly or severally liable with or for others with a view to enabling third parties to take or acquire Shares.

 

Capital.

 

Article 4.

 

1.                           The authorised capital of the Company is fifty-nine million four hundred one thousand eight hundred seventy-seven euro and sixty-one eurocent (EUR 59,401,877.61), divided into:

 

a.                             two billion two hundred four million two hundred thirty thousand two hundred eighty (2,204,230,280) Ordinary Shares of which are;

 

i)           two billion (2,000,000,000) Class A Ordinary Shares, each with a par value of one eurocent (EUR 0.01);

 

ii)        one hundred two million one hundred fifteen thousand one hundred forty (102,115,140) Class B Ordinary Shares, each with a par value of ten eurocent (EUR 0.10);

 

iii)     one hundred two million one hundred fifteen thousand one hundred forty (102,115,140) Class C Ordinary Shares, each with a par value of nine eurocent (EUR 0.09);

 

b.                             two billion and one (2,000,000,001) Preference Shares, each with a par value of one eurocent (EUR 0.01); and

 

c.                              one (1) Priority Share, with a par value of one euro (EUR 1.00).

 

Transfer and conversion of Class B Ordinary Shares.

 

Article 4A

 

1.                            Class B Ordinary Shares may only be Transferred to (i) Permitted Transferees, (ii) to the Conversion Foundation for the purpose of conversion pursuant to Articles 4A and 4B and (iii) to the Company. Any other purported Transfer of a Class B Ordinary Share shall be null and void.

 

2.                            Class B Ordinary Shares can be converted into Class A Ordinary Shares with due observance of this Article. In order to cause the Class B Ordinary Shares to be converted into Class A Ordinary Shares, such Class B Ordinary Shares must be transferred to the Conversion Foundation.

 

3.                           Upon execution of the transfer instrument pursuant to which the Class B Ordinary Shares are transferred to the Conversion Foundation, each Class B Ordinary Share is automatically converted into one (1) Class A Ordinary Share and one (1) Class C Ordinary Share. Unless the Company shall be a party to the transfer instrument, the Conversion Foundation shall forthwith notify the Company in writing of the conversion of Class B Ordinary Shares as described in the preceding sentence.  The transferor shall receive a Class A Ordinary Share from the Conversion Foundation in exchange for each Class B Ordinary Share transferred to the Conversion Foundation.

 

4.                            The Board of Directors shall forthwith register any such conversion of Shares in the register of Shareholders and equally in any applicable company register.

 

5.                            The Company shall at all times reserve and keep available out of its authorized but unissued capital, solely for the purpose of effecting the conversion of Class B Ordinary

 

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Shares, such number of Class A Ordinary Shares and Class C Ordinary Shares as shall from time to time be sufficient to effect the conversion of all outstanding Class B Ordinary Shares into Class A Ordinary Shares and Class C Ordinary Shares.

 

6.                            The Company may, from time to time, establish such policies and procedures relating to the conversion of the Class B Ordinary Shares into Class A Ordinary Shares and Class C Ordinary Shares and the general administration of this share capital structure as it may deem necessary or advisable, and may request that holders of Class B Ordinary Shares furnish affidavits or other proof to the Company as it deems necessary to verify the legal and beneficial ownership of Class B Ordinary Shares and the  “Qualified B Holder” status of any such holder, and to confirm that Class B Ordinary Shares are not held by a Non-Qualified B Holder.

 

Qualified shareholding of Class B Ordinary Shares.

 

Article 4B.

 

1.                            Only a Qualified B Holder may hold Class B Ordinary Shares.

 

2.                            If at any time a Class B Ordinary Share is held by a Non-Qualified B Holder, such Non-Qualified B Holder shall, without prejudice to the stipulations of paragraph 4 of this Article, not be entitled to any dividend and/or voting rights attached to the Class B Ordinary Shares held by such Non-Qualified B Holder.

 

3.                            If at any time a Class B Ordinary Share is held by a Non-Qualified B Holder, such Non-Qualified B Holder (the “Transferor”) shall notify the Company of this fact by written notice (the “Notice”) within three (3) days after the occurrence of the event pursuant to which the Transferor is obliged to serve the Notice. At the time of the Notice the relevant Non-Qualified B Holder is obliged to offer his Class B Ordinary Shares to the Conversion Foundation (the “Offer”), through which such Class B Ordinary Shares are converted into Class A Ordinary Shares and Class C Ordinary Shares with due observance of Article 4A. The Transferor shall receive an equal number of Class A Ordinary Shares from the Conversion Foundation in exchange for such Class B Ordinary Shares.

 

4.                            If the Transferor fails to:

 

a.                             give the Notice and or make the Offer within the term provided in this Article; or

 

b.                             transfer the relevant Class B Ordinary Shares to the Conversion Foundation within three (3) days of the Notice,

 

the Company is irrevocably empowered and authorised to offer and transfer the relevant Class B Ordinary Shares to the Conversion Foundation and to accept the Class A Ordinary Shares in exchange for such Class B Ordinary Shares for delivery to the Transferor.

 

5.                            If the Conversion Foundation fails to accept the offered Class B Ordinary Shares from the Transferor within three (3) months after receipt of the Offer, then the Transferor’s dividend and voting rights attached to its Class B Ordinary Shares shall revive.

 

6.                            Each and every Qualified B Holder shall cease to be a Qualified B Holder if and when ninety-five percent (95%) or more of all issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares (by number, taken together) are Class A Ordinary Shares.

 

7.                            Each Class B Ordinary Share held by a natural person that is a Qualified B Holder, or by its Permitted Transferees, shall, following the death of such Qualified B Holder, be deemed to be held by a Non-Qualified B Holder.

 

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Qualified shareholding of Ordinary Shares.

 

Article 4C.

 

1.                            No Ordinary Share may be held as a result of a Triggering Event by a Shareholder if, as a result of such Triggering Event, such Shareholder or any other party (in each case together with its Affiliated Parties), would hold, legally and/or beneficially, Excess Shares, unless such holding of Excess Shares is approved by both the Board of Directors and the Priority pursuant to paragraph 10 of this Article 4C. If the Shares (a) are admitted to trading on a regulated market or multilateral trading facility or an exchange system of a non-member state that is comparable to a regulated market or multilateral trading facility (including, for the purposes hereof, The Nasdaq Global Market) and (b) are included in a system that facilitates the (trading and) settlement of Shares (including, for the purposes hereof, the system operated by The Depository Trust Company) and/or are held by a nominee for such purposes (including, for the purposes hereof, Cede & Co.) that may qualify as the legal holder of the Shares, the provisions of this Article 4C apply mutatis mutandis to the parties holding an interest in the Shares through such system or nominee. The term “Shareholder” shall be construed accordingly for the purposes of this Clause 4C.

 

2.                            The qualified shareholding restriction set forth in paragraph 1 above shall not apply to:

 

a.                             Any custodian (bank) or nominee acting to facilitate the (trading and) settlement of the Shares listed at a regulated market or multilateral trading facility or an exchange or system of a non-member state that is comparable to a regulated market or multilateral trading facility (including, for purposes hereof, The Nasdaq Global Market) and any investment bank or banks acting as underwriter(s) in connection with a public offering of Class A Ordinary Shares, in their capacity as such.

 

b.                             Any Shareholder that acts as a bare nominee holder of Class A Ordinary Shares on behalf of the beneficial holder(s) thereof; provided that (subject to the final clause of this subparagraph b):

 

(i)                                  immediately following receipt of any information by such bare nominee with respect to any potential or effected change in beneficial ownership of any Shares held by it (including a change in the identity of any beneficial holder or a change in the number of shares beneficially held) that has resulted or would result in a beneficial holder on whose behalf such bare nominee holds Shares beneficially owning (together with its Affiliated Parties) Excess Shares, such bare nominee shall notify the Board of Directors of all details actually known to such bare nominee relating to such change;

 

(ii)                               such bare nominee provides to the Board of Directors, within five (5) business days of any request by it from time to time, a written statement disclosing the identity of each beneficial holder of Shares legally held in its name that, together with its Affiliated Parties, holds Excess Shares, and the percentage holding of each such beneficial holder, specifying the rights of such beneficial holder with respect to the voting or disposition of such Shares, in each case to the extent actually known by such bare nominee; and

 

(iii)                            promptly after such bare nominee becomes aware (including following a notification from the Board of Directors to the bare nominee) that a

 

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beneficial holder on whose behalf such bare nominee holds Shares beneficially owns (together with its Affiliated Parties) Excess Shares, such bare nominee distributes to such beneficial holder a number of Shares equal to the number of Excess Shares beneficially held by such beneficial holder and its Affiliated Parties;

 

provided, however, that (x) such bare nominee shall not be required by the provisions of this subparagraph b to disclose any information or take any action that it is not permitted to disclose or take pursuant to applicable law, contract or internal compliance policy; and (y) no notification to the Board shall be required in respect of information otherwise notifiable to the Board pursuant to paragraphs (i) and (ii) of this subparagraph b that is timely disclosed to the United States Securities and Exchange Commission on Schedule 13D or Schedule 13G in accordance with the applicable rules of the United States Securities and Exchange Commission;

 

c.                              The Conversion Foundation.

 

3.                            Any Transfer or acquisition of Class B Ordinary Shares in violation of paragraph 1 of this Article is null and void.

 

4.                            If at any time the legal and/or beneficial holdings of a Shareholder or any other party  (in each case together with its Affiliated Parties), exceeds the applicable Ownership Cap as a result of a Triggering Event and such holding of Excess Shares has not been approved by both the Board of Directors and the Priority pursuant to paragraph 10 of this Article (and is not otherwise exempted by paragraph 2 above), the Shareholder of the relevant Excess Shares is obliged (i) if and to the extent the Excess Shares are Class A Ordinary Shares, to sell the Excess Shares in the public market or otherwise within five (5) business days after a Triggering Event; and (ii) (a) if and to the extent the Excess Shares are Class B Ordinary Shares and the Transfer or acquisition of such Class B Ordinary Shares is held not to be null and void as provided for in paragraph 3, or (b) the Shareholder fails to sell the Excess Shares in accordance with clause (i) of if this paragraph 4 within the five (5)-business day period, to offer such Excess Shares to the Board of Directors within ten (10) business days after the Triggering Event.

 

5.                            If a Shareholder, within ten (10) business days after a Triggering Event, fails to comply with the obligation of paragraph 4 of this Article to offer the Excess Shares to the Board of Directors, (i) such Shareholder shall be deemed to have offered such Excess Shares to the Board of Directors, and (ii) the Board of Directors will be irrevocably authorised, with the right of substitution, to perform such acts and transactions on behalf of such Shareholder as deemed necessary to comply with the provisions of this Article, including but not limited to the sale and transfer of such Excess Shares in accordance with the terms of this Article 4C.

 

6.                            During the period in which a Shareholder has not effectuated the transfer of Excess Shares in accordance with this Article 4C and either the Board of Directors or the Priority have not approved the holding of Excess Shares by the Shareholder thereof pursuant to paragraph 10 of this Article, such Shareholder will not be entitled to any dividend and/or voting rights attached to the Excess Shares.

 

7.                            The Board of Directors is authorised to (i) nominate one or more purchasers or substitute purchasers (which, in each case, may include the Company) that are willing to buy the Excess Shares offered in accordance with paragraph 4 or paragraph 5 of

 

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this Article, against payment in cash; or (ii) sell the Excess Shares in the public market through a broker or placement agent, hired and instructed by the Board of Directors for this purpose. If (a) the Board of Directors fails to nominate one or more purchasers (or substitute purchasers) in accordance with the terms and conditions of this paragraph within three (3) months from the date of the (deemed) offer hereunder, or (b) the party or parties so nominated by the Board of Directors fail to accept the offer within three (3) months from the date of the (deemed) offer hereunder, or (c) the Board of Directors fails to sell the Excess Shares in the public market within three (3) months from the date of the (deemed) offer hereunder, the requirements of this Article shall not apply to the offering Shareholder until such Shareholder acquires (or is deemed to acquire) one or more (additional) Ordinary Shares.

 

8.                            The purchase price for any Ordinary Shares offered in accordance with paragraph 4 or paragraph 5 of this Article in the event of the nomination of one or more purchasers pursuant to clause (i) of paragraph 7, shall be the fair market value of such Shares on the date of the (deemed) offer. Such fair market value shall be determined as follows: (i) if the Shares are admitted to trading on a regulated market or multilateral trading facility, as referred to in article 1:1 of the Financial Supervision Act (Wet financieel toezicht) or an exchange or system of a non-member state that is comparable to a regulated market or multilateral trading facility (including, for purposes hereof, The Nasdaq Global Market), the reported closing sale price on such exchange or system on such date (or the last trading date immediately prior to such date), or (ii) if no Shares of the Company are then admitted to such trading, the fair market value of such Share as conclusively determined by an internationally reputable and independent third party appraiser appointed for this purpose by the Board of Directors.  In the event of a public market sale pursuant to clause (ii) of paragraph 7, the purchase price shall be such price or prices obtained in good faith by a placement agent engaged by the Board of Directors or in arm’s length brokers transaction(s) in the public market (it being expressly acknowledged that such sales may take place at any time or times during the three (3)-month period described above and that the sale prices of the Excess Shares so sold may vary).  The Board of Directors is irrevocably authorised, with the right of substitution, to perform such acts and transactions on behalf of the selling Shareholder as the Board of Directors may deem necessary or convenient to effect the sale and transfer of such Excess Shares in accordance with the terms of this Article 4C.

 

9.                            For the purpose of enabling the Board of Directors to adequately perform its duties under this Article, each Shareholder is obliged to inform the Board of Directors within ten (10) days of any Triggering Event that results in such Shareholder (or, to the knowledge of such Shareholder, any beneficial holder(s) on whose behalf such Shareholder is holding Shares), together with its (or such beneficial party’s) Affiliated Parties, exceeding a legal and/or beneficial holding threshold of five percent (5%), ten percent (10%), fifteen percent (15%), twenty percent (20%), twenty-five percent (25%) or thirty percent (30%) of either the voting rights attached to the issued Class A Ordinary Shares and the Class B Ordinary Shares (taken together) or the number of issued Class A Ordinary Shares and the Class B Ordinary Shares (taken together). In the event that a Shareholder (or, to the knowledge of such Shareholder, any beneficial holder(s) on whose behalf such Shareholder is holding Shares), together with its (or such beneficial party’s) Affiliated Parties, acquires legal and/or beneficial ownership of

 

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Excess Shares, such Shareholder shall, together with the foregoing notification, notify the Board of Directors of the price or prices paid for the purchase of such Excess Shares. Failing compliance with the obligations laid down in this paragraph, such Shareholder will not be entitled to any dividend and/or voting rights attached to any of his Shares or - in case of a bare nominee holder of Shares on behalf of the beneficial holder(s) thereof - to the Shares held on behalf of such beneficial holder(s).  Without limiting the foregoing, each Shareholder shall, within five (5) business days of notice from the Board of Directors, (x) identify to the Board of Directors in writing any beneficial holder of Shares registered in the name of such Shareholder in excess of any of the foregoing thresholds, and (y) if so requested, shall furnish affidavits or such other proof to the Board of Directors as the Board of Directors reasonably deems necessary to verify the legal and/or beneficial ownership of such Shares.  For purposes of the preceding sentence, “beneficial ownership” may be determined in accordance with Rule 13d-3 under the United States Securities Exchange Act of 1934, as amended. Notwithstanding, the provisions of this paragraph 9, no notification to the Board shall be required in respect of information otherwise notifiable to the Board hereunder that is timely disclosed to the United States Securities and Exchange Commission on Schedule 13D or Schedule 13G in accordance with the applicable rules of the United States Securities and Exchange Commission. This paragraph 9 shall not apply to any custodian (bank) or nominee acting to facilitate the (trading and) settlement of the Shares listed at a regulated market or multilateral trading facility or an exchange or system of a non-member state that is comparable to a regulated market or multilateral trading facility (including, for purposes hereof, The Nasdaq Global Market).

 

10.                     Any person seeking to acquire legal and/or beneficial ownership together with its Affiliated Parties of Excess Shares by acquisition or subscription or as a result of another Triggering Event (a “Potential Acquiror”), whether in one or more transactions, may seek prior approval first by the Board of Directors and subsequently (upon approval by the Board of Directors) approval by the Priority of such acquisition, subscription or holding as result of another Triggering Event by submitting a notification in writing to the Board of Directors at the registered office of the Company (with a copy to the Chairman of the Board of Directors at such address and/or email address as may be identified from time to time for such purpose on the investor relations section of the Company’s website at www.yandex.ru) setting forth (i) the terms and conditions of such proposed acquisition(s), subscription(s) or other Triggering Event(s), including the identity of the transferring party(ies) and the proposed purchase or subscription price, if applicable, (ii) a detailed description of the identity of the Potential Acquiror, including the jurisdiction of incorporation or residence of the Potential Acquiror and the identity and jurisdiction of incorporation or residence of each legal and/or beneficial holder of more than five percent (5%) of the ownership interests in such Potential Acquiror; and (iii) a detailed description of the Potential Acquiror’s intentions with respect to its shareholding in the Company and any further potential acquisitions of Shares.  Within twenty (20) business days of its receipt of such notification, the Board of Directors shall (x) decide on its approval or rejection in relation to the proposed acquisition of Excess Shares by the Potential Acquiror and (y) inform the Potential Acquiror of its decision. Subsequently, provided that the Board of Directors has approved the proposed acquisition of Excess Shares by the Potential

 

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Acquiror, the Board of Directors shall provide a copy of the information package submitted by the Potential Acquiror to the Board of Directors, together with its approval thereof and its recommendation thereon, to the Priority.  The Priority shall then have twenty (20) business days following its receipt of the notification from the Board of Directors to deliver a written notification to the Board of Directors either approving or rejecting the holding of Excess Shares as a result of such acquisition, subscription or other Triggering Event.  The Board of Directors shall provide a copy of such notification to the Proposed Acquiror within three (3) business days of its receipt thereof. In the event that either the Board of Directors or the Priority fails to timely deliver a notification setting forth its approval or rejection of the proposed holding of Excess Shares, it shall be deemed to have withheld its approval thereof.

 

11.                     In the event that any law or regulation of the Russian Federation is adopted or amended to impose a limitation or restriction on the ownership of internet businesses in Russia by non-Russian parties in a manner that is directly applicable to the Company and/or its business, then, immediately upon the effectiveness of such change in law or regulation, the provisions of this Article 4C, the provisions of Article 14B and the provision of Article 28.4, including the approval rights of the Priority Share hereunder and thereunder, shall terminate and thereafter be of no further force or effect; provided however, that the foregoing provision shall not apply in case of any law or regulation that applies to the Company only by virtue of any activity undertaken by the Company or any member of its group that is ancillary to the operation of its internet business.

 

Qualified shareholding of the Priority Share.

 

Article 4D.

 

1.                            The Priority Share may only be held by a party that is specifically nominated by the Board of Directors for this purpose. Any transfer of the Priority Share is subject to prior written approval of the Board of Directors, acting by simple majority.

 

2.                            Any transfer of the Priority Share in violation of paragraph 1 of this Article is null and void.

 

3.                            If and so long as the Priority Share is not held by a party that meets the criteria laid down in paragraph 1 of this Article, the voting rights, dividend rights and other rights pertaining to the Priority Share (including, without limitation, the approval rights hereunder) may not be exercised.

 

4.                            Until the moment that the Priority Share is issued, the provisions laid down in these Articles relating to the Priority Share, the Priority or the Meeting of Priority Share shall be of no effect.

 

Shares. Usufruct and pledge of Shares.

 

Article 5.

 

1.                            All Shares shall be registered Shares. No share certificates shall be issued. The Board of Directors may number the Shares in a manner determined at its sole discretion.

 

2.                            Shares may be encumbered with usufruct. At the creation of the right of usufruct in respect of Class A Ordinary Shares it may be provided that the right to vote pertaining to the Class A Ordinary Shares shall vest in the usufructuary. The voting rights pertaining to the Priority Share, the Class B Ordinary Shares and the Class C Ordinary Shares may not be transferred to a usufructuary.

 

3.                            Ordinary Shares and Preference Shares may be pledged as security. At the creation of the pledge in respect of Class A Ordinary Shares it may be provided that the right to

 

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vote shall vest in the pledgee. The voting rights pertaining to the Class B Ordinary Shares, the Class C Ordinary Shares and the Preference Shares may not be transferred to a pledgee.

 

4.                            The Priority Share may not be pledged

 

Addresses. Notices and announcements. Register of Shareholders.

 

Article 6.

 

1.                            Shareholders, pledgees and usufructuaries of Shares must supply their addresses, including their e-mail addresses (if any), to the Company in writing.

 

2.                            Notices, announcements and generally all communications intended for the persons referred to in paragraph 1 of this Article are to be sent in writing to the addresses they have supplied to the Company.

 

3.                            The Board of Directors shall keep a register in which shall be recorded all particulars as prescribed by law or, if applicable, the rules and regulations of the stock exchange at which Shares are listed concerning shareholders, usufructuaries and pledgees. In the register shall also be recorded each and any release from liability granted in respect of monies unpaid and not yet called on Shares.

 

4.                            The register of Shareholders shall be updated at regular times.

 

5.                            The Board of Directors shall be entitled to keep a part of the register of Shareholders outside the Netherlands if such is required for the compliance with foreign legalization or the rules and regulations of the stock exchange at which the Shares are listed.

 

Issue of Shares.

 

Article 7.

 

1.                            Upon receipt of a written proposal of the Board of Directors to this effect, the General Meeting has the power to resolve to issue Shares and to determine the price of issue and the other terms of issue, which terms may include payment on Shares in a foreign currency. Upon receipt of a written proposal of the Board of Directors to this effect the General Meeting may transfer its aforesaid power to the Board of Directors for a period not exceeding five years. Such designation shall specify the number of Shares that may be issued and may also include the price (range) at which such Shares may be issued. The designation may be extended, from time to time, for periods not exceeding five years. Unless such designation provides otherwise, it may not be withdrawn.

 

2.                            Within eight (8) days following a resolution by the General Meeting to issue Shares or to designate another body of the Company, the Company shall file the full text of such resolution at the office of the Commercial Register with which the Company is registered. Within eight (8) days after each issue of Shares, the Company shall report the same to the office of said Commercial Register.

 

3.                           The provisions of paragraph 1 and 2 of this Article shall apply mutatis mutandis to the granting of rights to subscribe for Shares, but not to the issue of Shares to a person exercising a previously acquired right to subscribe for Shares.

 

4.                            The Company or its Subsidiaries cannot subscribe for Shares.

 

5.                            When Ordinary Shares are subscribed for, the amount of their par value must be paid at the same time and, in addition, if the Ordinary Share is subscribed at a higher amount, the difference between such amounts must be paid. It may be agreed that part of the amount to be paid on the Preference Shares - such part not to exceed three fourths (3/4) of the par value - may remain unpaid until the Company shall make a call in respect of the monies unpaid on the Preference Shares. Such arrangement

 

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may only be agreed prior to the resolution to issue Preference Shares and shall require the approval of the body of the Company which has the power to resolve to issue at the time of making such agreement.

 

6.                            Calls upon the Shareholders in respect of any monies unpaid on their Shares shall be made by the Board of Directors by virtue of a resolution of the General Meeting.

 

7.                            The body of the Company which has the power to resolve to issue Shares may resolve that payment on Shares shall be made by some other means than payment in cash or payments in a foreign (non-euro) currency.

 

Pre-emptive right at issue of Shares.

 

Article 8.

 

1.                            At the issue of any new Ordinary Shares, the statutory rights of pre-emption as laid down in Book 2 shall apply. At the issue of Preference Shares, including those against contribution in kind, each holder of Preference Shares shall have a pre-emptive right pro rata to the total number of Preference Shares held by him as a portion of the total number of the issued and outstanding Preference Shares on the date of the resolution to issue the Preference Shares. The pre-emption right of a holder of Preference Shares in respect of an issue of Preference Shares may not be limited. No pre-emption rights shall apply in respect of the issue of the Priority Share.

 

2.                            Upon receipt of a written proposal of the Board of Directors to this effect, the General Meeting may each time in respect of one particular issue of Ordinary Shares, resolve to limit or to exclude the pre-emptive right of subscription for the Ordinary Shares, provided that such resolution is passed at the same time as the resolution to issue the Ordinary Shares.

If at a General Meeting at which a proposal to limit or exclude the pre-emptive right to subscribe for Ordinary Shares comes up for discussion and less than one half of the issued capital is represented, a resolution to limit or exclude the pre-emptive right may only be adopted by at least two-thirds of the votes cast.

 

Any proposal to limit or exclude the pre-emptive right must contain a written explanation of the reasons for the proposal and the choice of the proposed price (or price range or formula for the determination of such price, including by reference to the market price of such Ordinary Shares as of a future date or dates) of issue.

 

Upon receipt of a written proposal of the Board of Directors to this effect, the General Meeting can resolve that the pre-emptive right may also be limited or excluded by the Board of Directors, for a period not exceeding five years.

 

Such designation may be renewed for subsequent periods not exceeding five years each.

 

Unless the terms of the designation provide otherwise, it cannot be revoked.

 

Within eight (8) days following a resolution by the General Meeting to limit or exclude the pre-emptive right or to designate the Board of Directors, the Company shall file the full text of such resolution at the office of the Commercial Register.

 

3.                            A share issue at which Shareholders may exercise a pre-emptive right and the period during which said right is to be exercised shall be announced by the Company to all Shareholders of the relevant class of Shares either in writing or by a public announcement in a newspaper taking into account the rules and regulations of the stock exchange at which Shares are listed. The pre-emptive right may be exercised during the period to be determined by the body of the Company authorised to issue

 

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Shares, that period to be at least two weeks from the day following the date of despatch of the announcement.

 

4.                            The provisions of the preceding paragraphs of this Article shall apply mutatis mutandis to the granting of rights to take Shares.

 

Transfer of Shares. Exercise of Shareholder’s rights.

 

Article 9.

 

1.                            If Shares of any class are admitted or are reasonably expected - on relatively short notice - to be admitted to trading on a regulated market or multilateral trading facility, as referred to in article 1:1 of the Financial Supervision Act (Wet financieel toezicht) or a system of a non-member state that is comparable to a regulated market or multilateral trading facility, the transfer of a registered Ordinary Share or Preference Share or of a limited right (beperkt recht) thereto shall require an instrument intended for such purpose and, save when the Company itself is a party to such legal act, the written acknowledgement by the Company of the transfer.  The acknowledgement shall be made in the instrument or by a dated statement on the instrument or on a copy or extract thereof mentioning the acknowledgement signed as a true copy thereof by a civil-law notary or the transferor.

 

Service of such instrument of transfer, copy or extract on the Company shall be deemed to constitute such acknowledgement.

 

2.                            The transfer of the Priority Share requires a notarial deed executed by and in front of a notary practicing in the Netherlands to which each transferor and each transferee are a party.

 

3.                            Following a transfer referred to in paragraph 1 or paragraph 2 of this Article, the rights attached to the Shares concerned may not be exercised until the instrument of transfer has been served upon the Company or until the Company has acknowledged the transaction in writing or has been deemed to have acknowledged such transaction. The provision in the preceding sentence shall not apply if the Company itself has been a party to the transaction.

 

Acquisition by the Company of its own Shares.

 

Article 10.

 

1.                            Any acquisition by the Company of partly-paid Shares in its own capital shall be null and void.

 

2.                            Provided that the General Meeting has given the Board of Directors authorisation for this purpose, the Company may acquire fully paid-up Shares provided that:

 

(a)                        the Company’s equity capital, reduced by the acquisition price, is not less than the sum of the issued and paid-up capital and the reserves to be maintained pursuant to the law or the Articles of Association;

 

(b)                        following the transaction contemplated, at least one issued share in the capital of the Company remains outstanding and is not held by the Company; and

 

(c)                         in case the Company is admitted to trading on a regulated market or multilateral trading facility, as referred to in article 1:1 of the Financial Supervision Act (Wet financieel toezicht) or a system from a non-member state that is comparable to a regulated market or multilateral trading facility, the par value of the Shares to be acquired, already held by the Company or already held by the Company as pledgee or which are held by Subsidiaries, does not exceed fifty percent (50%) of the issued capital of the Company.

 

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3.                            The factor deciding whether the acquisition is valid shall be the amount of the equity of the Company as shown in its most recently adopted balance sheet, reduced by the acquisition price of Shares in the capital of the Company and any payments from profit or reserves to others which may have become due by the Company and its Subsidiaries after the balance sheet date.

 

If more than six months of a financial year have passed without the annual accounts having been adopted, the acquisition of own Shares under paragraph 2 of this Article shall not be permitted until such time as such most recent annual accounts have been so adopted.

 

4.                            The authorisation of the General Meeting, referred to in paragraph 2 of this Article, which shall be valid for a maximum of eighteen months (18) only, must specify how many Shares are permitted to be acquired, the manner in which they may be acquired and the permitted upper and lower limits of the price.

 

5.                            The preceding paragraphs of this Article shall not apply in respect of (i) Shares which the Company may acquire gratuitously or by universal succession and (ii) Shares that are listed at a stock exchange which are acquired for the purpose of distribution of such Shares to employees of the Company and/or its Subsidiaries pursuant to an employee option plan.

 

6.                            Any acquisition of Shares made in breach of the provisions of paragraph 2 of this Article shall be null and void.

 

7.                            Shares owned by the Company shall not bear any dividend rights unless rights of usufruct are created in respect of such Shares prior to the acquisition by the Company, in which case the holder of usufruct shall be entitled to any dividends on the underlying Shares. Shares owned by the Company or its Subsidiaries shall not bear any voting rights unless rights of usufruct were created in respect of such Shares prior to the acquisition of such Shares by the Company or its Subsidiaries respectively.

 

Reduction of capital.

 

Article 11.

 

1.                            Upon receipt of a written proposal of the Board of Directors to this effect, the General Meeting may resolve to reduce the issued capital by a cancellation of Shares or by a reduction of the par value of the Shares by amendment of the Articles of Association. Such resolution to reduce the issued capital of the Company must indicate the Shares to which it relates and provisions for its implementation must be included.

 

2.                            A resolution to cancel Shares may only relate to i) Shares held by the Company, or ii) to all the Shares of a particular class, in respect of which the Articles of Association provide that the same may be cancelled against repayment of their par value.

 

3.                            As provided in clause (ii) of paragraph 2 of this Article 11, Class C Ordinary Shares may be cancelled against repayment of their par value.

 

4.                            If the General Meeting resolves to reduce the par value of the Shares by amendment of the Articles of Association - regardless whether this is done without redemption or against partial repayment on the Shares or upon release from the obligation to pay up the Shares - such reduction must be made pro rata on all Shares of a particular class.

 

5.                            A resolution for reduction of capital shall require a majority of at least two thirds of the votes cast, if less than one half of the issued capital is represented at the relevant meeting of Shareholders.

 

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BOARD OF DIRECTORS.

 

Composition and Remuneration.

 

Article 12.

 

1                               The business and affairs of the Company shall be managed by a Board of Directors consisting of no less than eight (8) members and no more than twelve (12) members including at least one (1) Executive Director and at least two (2) Non-Executive Directors.

 

2.                            Only individuals shall be eligible for appointment as Executive Director or Non-Executive Director.

 

3.                            The Executive Directors and the Non-Executive Directors shall be appointed by the General Meeting for a maximum period of three (3) years, provided however, that, unless such director has resigned at an earlier date, a Director shall cease to hold office on the date of the first General Meeting held in the third year following the year in which he was appointed Director. Directors shall be immediately eligible for re-appointment at the General Meeting at which they cease to hold office.

 

4                               The Board of Directors shall have the power to appoint from its members a Chief Executive Officer and from its Non-Executive Directors a Chairman of the Board.

 

5                               The General Meeting shall adopt general guidelines in respect of the remuneration of the members of the Board of Directors and of the person(s) referred to in paragraph 3 of Article 13 (the “Remuneration Policy”).

 

6.                            With due observation to the Remuneration Policy, the Board of Directors may establish a remuneration for the members of the Board of Directors in respect of the performance of their duties. It being understood that, in accordance with the principle laid down in Article 13 paragraph 5, Executive Directors shall not participate in the decision making process relating to the remuneration of Executive Directors.

 

7.                           Directors may be suspended and/or removed from office by the General Meeting at any time, such resolution requiring a majority of two thirds (2/3) of the votes cast in a meeting, representing at least fifty percent (50%) of the issued and outstanding capital of the Company. The Director concerned shall be given the opportunity to account for his conduct at the General Meeting. For that purpose he may have himself assisted by a legal adviser.

 

Decision-making by the Board of Directors. Directors’ ceasing to hold office or being unable to act.

 

Article 13.

 

1.                            If the Board of Directors consists of several members, resolutions of the Board of Directors shall require an absolute majority of the votes cast in a meeting where at least the majority of members of the Board of Directors is present or represented. Each Director shall have one vote. If the voting for and against a proposal is equally divided, another vote shall be taken if so demanded by any Director.

 

2.                            The Board of Directors shall draw up board rules to deal with matters that concern the Board of Directors internally.

 

The rules of the Board of Directors may inter alia include an allocation of tasks among the members of the Board of Directors and shall contain provisions concerning the matter in which meetings of the Board of Directors are called and held. The rules of the Board of Directors may stipulate that certain resolutions of the Board of Directors may validly be passed by one or more Directors, provided that the relevant resolutions are within the scope of the task(s) allocated to this or these particular Director(s).

 

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3.                            In the event that one or more Directors shall cease to hold office or be unable to act, the other or remaining Directors or the only other or remaining Director shall be temporarily entrusted with the management of the Company.

 

In the event that all Directors or the sole Director shall cease to hold office or be unable to act, the management of the Company shall be temporarily entrusted to the person designated or to be designated for that purpose by the General Meeting.

 

The provisions of the Articles of Association concerning the Board of Directors and the Director(s) individually shall apply mutatis mutandis to the person referred to in this paragraph. Furthermore, that person shall be required to call a General Meeting as soon as possible, which General Meeting may decide on the appointment of one or several new Directors.

 

4.                            The Board of Directors may pass resolutions in writing, provided that all members of the Board of Directors have been consulted on the proposed resolution(s) and none of the members of the Board of Directors have objected against this form of resolution. A resolution in writing by the Board of Directors requires a simple majority of the members of the Board of Directors.

 

5.                            Any Director with a conflict of interest in respect of the Company and/or its business shall refrain from participating in the decision making process of the Board of Directors in this particular matter. If as a direct result of the foregoing, no resolution can be adopted by the Board of Directors, such resolution will be put before the General Meeting and subsequently the General Meeting can resolve on the matter.

 

Decision by the Board of Directors subject to approval by the General Meeting

 

Article 14 A.

 

Decisions of the Board of Directors involving a major change in the Company’s identity or character are subject to the approval of the General Meeting, including:

 

a.                            the transfer of the enterprise or practically the whole enterprise of the Company to third parties;

 

b.                            to enter or to terminate longstanding joint ventures of the Company or a Subsidiary with another legal entity or company or as fully liable partner in a limited partnership or a general partnership if this joint venture or termination of such a joint venture is of a major significance to the Company;

 

c.                             to acquire or dispose of a participation in the capital of a company worth at least one third of the amount of the Company’s assets according to the balance sheet with explanatory notes thereto, or if the Company prepares a consolidated balance sheet according to such consolidated balance sheet with explanatory notes according to the last adopted annual account of the Company, by the Company or a Subsidiary.

 

Decision by the Board of Directors subject to approval by the Priority

 

Article 14B.

 

Any decision of the Board of Directors to transfer all or substantially all of the assets of the Company to one or more third parties, including the sale of its subsidiary: OOO Yandex, a company organised under the laws of the Russian Federation, is subject to the prior approval of the Priority; provided that no approval shall be required in connection with any corporate reorganisation of the Company’s group so long as the business operations of the group continue to be conducted by one or more Russian companies that are, directly or indirectly, wholly owned by the Company.

 

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Duties and powers of the Directors.

 

Article 15.

 

1.                            The Executive Directors shall be entrusted with and responsible for the day to day management of the Company.

 

2.                            The Board of Directors may install committees consisting of members of the Board of Directors, and/or management of the Company and/or its Subsidiaries.

 

3.                            The Board of Directors may designate certain tasks and functions to the committees referred to in the previous paragraph of this Article.

 

4.                            The Board of Directors may appoint a company secretary to assist the Board of Directors. The company secretary will be admitted to meetings of the Board of Directors and the General Meeting.

 

Representation.

 

Article 16.

 

1.                            The Board of Directors shall represent the Company. The power to represent the Company shall also vest in each Executive Director individually.

 

2.                            If an Executive Director performs any transaction in a private capacity to which transaction the Company also is a party, or if an Executive Director, acting in his private capacity, conducts any legal action against the Company other than as referred to in Section 15 of Book 2, each other Executive Director shall have the power to represent the Company.

 

3.                            The Board of Directors may grant power of attorney for signature to one or several persons and may alter or revoke such power of attorney.

 

Indemnity and Insurance.

 

Article 17.

 

1.                            To the extent permissible by law, the Company shall indemnify and hold harmless:

 

a.                            each member of the Board of Directors, both former members and members currently in office;

 

b.                            each person who is or was serving as an officer of the Company;

 

c.                             each person who is or was serving as a proxy holder of the Company;

 

d.                            each person who is or was a member of the board or supervisory board or officer of other companies or corporations, partnerships, joint ventures, trusts or other enterprises by virtue of their functional responsibilities with the Company and or its Subsidiaries,

 

(each of them, for the purpose of this Article only, an “indemnified person”), against any and all liabilities, claims, judgments, fines and penalties (“claims”) incurred by the indemnified person as a result of any threatened, pending or completed action, investigation or other proceeding, whether civil, criminal or administrative (each, a “legal action”), brought by any party other than the Company itself or any Subsidiaries, in relation to acts or omissions in or related to his capacity as an indemnified person.

 

2.                            Claims will include derivative actions brought on behalf of the Company or any Subsidiaries against the indemnified person and claims by the Company (or any Subsidiaries) itself for reimbursement for claims by third parties on the ground that the indemnified person was jointly liable toward that third party in addition to the Company.

 

3.                            The indemnified person will not be indemnified with respect to claims insofar as they relate to the gaining in fact of personal profits, advantages or compensation to which he was not legally entitled, or if the indemnified person shall have been adjudged to be liable for willful misconduct (opzet) or intentional recklessness (bewuste roekeloosheid).

 

4.                            Any expenses (including reasonable attorneys’ fees and litigation costs) (collectively, “expenses”) incurred by the indemnified person in connection with any legal action shall

 

20


 

be settled or reimbursed by the Company, but only upon receipt of a written undertaking by that indemnified person that he shall repay such expenses if a competent court in an irrevocable judgment has determined that he is not entitled to be indemnified. Expenses shall be deemed to include any tax liability which the indemnified person may be subject to as a result of his indemnification.

 

5.                            Also in case of a legal action against the indemnified person by the Company itself or any Subsidiary(s), the Company will settle or reimburse to the indemnified person his reasonable attorneys’ fees and litigation costs, but only upon receipt of a written undertaking by that indemnified person that he shall repay such fees and costs if a competent court in an irrevocable judgment has resolved the legal action in favor of the Company or the relevant Subsidiary(s) rather than the indemnified person.

 

6.                            Expenses incurred by the indemnified person in connection with any legal action will also be settled or reimbursed by the Company in advance of the final disposition of such action, but only upon receipt of a written undertaking by that indemnified person that he shall repay such expenses if a competent court in an irrevocable judgment has determined that he is not entitled to be indemnified.

 

Such expenses incurred by indemnified persons may be so advanced upon such terms and conditions as the Board of Directors decides.

 

7.                            The indemnified person shall not admit any personal financial liability vis-à-vis third parties, nor enter into any settlement agreement, without the Company’s prior written authorization.

 

The Company and the indemnified person shall use all reasonable endeavors to cooperate with a view to agreeing on the defense of any claims, but in the event that the Company and the indemnified person would fail to reach such agreement, the indemnified person shall comply with all reasonable directions given by the Company, in order to be entitled to the indemnity contemplated by this Article.

 

8.                            The indemnity contemplated by this Article shall not apply to the extent claims and expenses are reimbursed by insurers.

 

9.                            The Company will provide for and bear the cost of adequate insurance covering claims against the indemnified person, unless such insurance cannot be obtained at reasonable terms.

 

10.                     This Article can be amended without the consent of the indemnified persons as such. However, the indemnity provided herein shall nevertheless continue to apply to claims and/or expenses incurred in relation to the acts or omissions by the indemnified person during the periods in which this clause was in effect.

 

11.                     At its discretion, the Board of Directors may have the Company indemnify other members of the management team, not being members of the Board of Directors, or other employees, each in case of the Company or of a Subsidiary, comparable to the indemnification provided herein for the benefit of other indemnified persons.

 

GENERAL MEETING.

 

Notice and venue of the General Meeting.

 

Article 18.

 

1.                            Without prejudice to the provisions of Article 25, General Meetings shall be held as frequently as the Board of Directors may wish. The power to call the General Meeting shall vest in the Board of Directors, in each Executive Director individually and/or the Chairman of the Board of Directors.

 

2.                            The Board of Directors may determine a registration date for the purpose of

 

21



 

registration of Shareholders who can attend the relevant Meeting and in order to establish the number of votes to be exercised at such General Meeting. In case the Board of Directors resolves to set a registration date for a General Meeting, any Shareholder who wishes to attend such General Meeting must inform the Board of Directors of its intent to attend the General Meeting. At the same time the registration date determines the number of votes that a Shareholder may cast in the General Meeting. The aforesaid registration date may not be set less than twenty-eight (28) days prior to the date of the relevant General Meeting. Should the Board of Directors resolve not to set a registration date, then all parties that can prove to hold Shares on the day of the General Meeting may attend the General Meeting and such Shareholders shall be able exercise votes on the basis of their Shares held on the day of the General Meeting.

 

3.                            The Board of Directors must call a General Meeting:

 

(a)                        if one or several Shareholders jointly representing at least one tenth of the issued capital so request the Board of Directors, that request to specify the subjects to be discussed and voted upon;

 

(b)                       within three months after the Board of Directors has considered it plausible that the equity capital of the Company has decreased to an amount equal to or less than one-half of the paid and called up part of the capital.

 

If the General Meeting is not held within six weeks after the request referred to under (a), the applicants themselves may call the General Meeting - with due observance of the applicable provisions of the law and the Articles of Association - without for that purpose requiring authorisation from the President of the District Court. The provisions of paragraph 2 of this Article shall apply mutatis mutandis to the procedure of calling a General Meeting referred to in the preceding sentence.

 

4.                            Any Shareholder(s) who hold at least one hundredth (1/100) of the issued capital of the Company or own Shares with a value of at least fifty million euro (EUR 50,000,000.00) may propose items for the agenda of the General Meeting. Such item for the agenda should together with an explanation be submitted to the Board of Directors at least sixty (60) days prior to the day of the General Meeting at which it shall be addressed. The Board of Directors will include such items for the agenda in an equal manner as items on the agenda proposed by the Board of Directors.

 

5.                            Notice of the General Meeting must be given to each Shareholder. The term of notice must be at least fifteen (15) clear days before the day on which the meeting is held. Notice shall be given by means of letters, specifying the subjects to be discussed at the meeting. The notice should also contain information on a formal registration date (if applicable) for the registration of Shareholders who can attend the relevant Meeting and in order to establish the number of votes to be exercised at such General Meeting.

 

6.                            General Meetings shall be held in The Hague, Amsterdam, Rotterdam, Utrecht or at Schiphol Airport in the municipality of Haarlemmermeer. Entirely without prejudice to the provisions of paragraph 5 of this Article, any resolution passed at a General Meeting held elsewhere - in or outside the Netherlands - shall be valid only if the requirements of notice set out in paragraph 3 of this Article have been complied with and the entire issued and outstanding share capital is represented.

 

22



 

Admittance to and chairmanship of the General Meeting.

 

Article 19.

 

1.                            The Shareholders are entitled to admittance to the General Meeting. The Directors of the Company also are entitled to admittance, with the exception of any Director who has been suspended, and admittance shall further be granted to any person whom the chairman of the meeting concerned has invited to attend the General Meeting or any part of that meeting.

 

2.                            If a Shareholder wishes to attend a General Meeting by proxy, he must issue a written power of attorney for that purpose, which power of attorney must be presented to the chairman of the meeting concerned.

 

3.                            The General Meeting shall be presided over by the Chairman of the Board. In case the Chairman of the Board is not available the Board of Directors shall appoint the chairman of the General Meeting.

 

4.                            Unless a notarial record of the business transacted at the meeting is drawn up, or unless the chairman himself wishes to keep minutes of the meeting, the chairman shall designate a person charged with keeping the minutes.

 

The minutes shall be adopted by the General Meeting at the same meeting or at a subsequent meeting, in evidence of which the minutes shall be signed by the chairman and the secretary of the meeting at which the minutes were adopted.

 

5.                            The Chairman of the General Meeting decides on all issues regarding admittance to the meeting, voting and the order of the meeting.

 

Voting rights. Decision-making.

 

Article 20.

 

1.                            Each Class A Ordinary Share and each Preference Share carries the right to cast one (1) vote. Each Class C Ordinary Share carries the right to cast nine (9) votes.

 

Each Class B Ordinary Share carries the right to cast ten (10) votes. The Priority Share carries the right to cast one hundred (100) votes.

 

2.                            In determining the extent to which the Shareholders cast votes, are present or are represented, or the extent to which the share capital is represented the Shares in respect of which no votes may be cast shall not be taken into account.

 

3.                            Unless the Articles of Association stipulate a larger majority, all resolutions of the General Meeting shall be passed by an absolute majority of the votes cast.

 

4.                            Blank votes and invalid votes shall not be counted as votes.

 

5.                            Votes on business matters - including proposals concerning the suspension, dismissal or removal of persons - shall be taken by voice or acclamation, but votes on the election of persons shall be taken by secret ballot, unless the chairman decides on a different method of voting and none of the persons present at the meeting object to such different method of voting.

 

6.                           If at the election of persons the voting for and against the proposal is equally divided, another vote shall be taken at the same meeting; if then again the votes are equally divided, then - without prejudice to the provision in the following sentence of this paragraph - such person shall not be elected.

 

If at an election of persons the vote is taken between more than two candidates and none of the candidates receive the absolute majority of votes, another vote - where necessary after an interim vote - shall be taken between the two candidates who have received the largest number of votes in their favour.

 

If the voting for and against any other proposal than as first referred to in this paragraph is equally divided, that proposal shall be rejected.

 

23



 

7.                            The General Meeting may resolve to allow a Shareholder to attend and participate in the General Meeting by electronic means of communication, if and to the extent the identity of the thus attending Shareholder can be verified by the Chairman of the Meeting. Electronic votes submitted to the Board of Directors within twenty-eight (28) days of the General Meeting shall be considered to be issued at the General Meeting, provided the means of communication allows the Chairman of the Meeting to verify the identity of the voting Shareholder.

 

Shareholders’ proxy. Shares belonging to any community of property or joint estate.

 

Article 21.

 

1.                            In respect of any or all of his Shares a Shareholder may give one or several persons written power of attorney to exercise any or all of the rights attached to those Shares. Such power of attorney may not be given in respect of one and the same Share to more than one person simultaneously. The powers referred to in this paragraph may also vest in usufructuaries and pledgees of Class A Ordinary Shares. The Board of Directors may invoke certain rules on the registration of proxies as referred to in this paragraph.

 

2.                            Joint owners of any community of property or joint estate comprising Shares or a limited right to Shares may only exercise their rights by giving one or several persons written power of attorney to exercise said rights. If power of attorney is given to several persons, such power of attorney must specify in respect of which number of Shares each proxy is authorised to exercise the rights attached thereto.

 

Decision-making outside a meeting.

 

Article 22.

 

Unless statutory provisions provide otherwise, any resolution which Shareholders entitled to vote can pass at a General Meeting may also be passed by them outside a meeting, provided that they all express themselves in writing in favor of the proposal concerned. The persons who have passed a resolution outside a meeting shall immediately inform the Board of Directors of that resolution.

 

Meetings of holders of Class A Ordinary Shares,

 

meetings of holders of Class B Ordinary Shares,

 

meetings of holders of Class C Ordinary Shares and meetings of the holder of the Priority Share.

 

Article 23.

 

1.                            Meetings of holders of a particular class of Ordinary Shares shall be convened by the Board of Directors. Meetings of the holder of the Priority Share may be convened by the holder of the Priority Share.

 

2.                           The convocation shall take place not later than on the fifth (5th) day prior to the day on which the meeting shall take place.

 

3.                            Notwithstanding the possibility for the holders of any specific class of Shares to agree to convene a meeting elsewhere and notwithstanding the option to pass resolutions in writing in accordance with Article 22, any meeting shall be held in the Netherlands at the place notified in convocation.

 

4.                            For the avoidance of doubt, the Priority may approve or decline to approve any Transfer, subscription or holding of Excess Shares hereunder in writing and without a meeting.

 

5.                            Articles 18 through 22 shall apply, mutatis mutandis, to any meeting referred to in this Article.

 

24



 

Meeting of holders of Preference Shares.

 

Article 24.

 

1.                           Meetings of holders of Preference Shares shall be convened by the Board of Directors or by a holder of one or more of the Preference Shares.

 

2.                           The convocation shall take place not later than on the fifth (5th) day prior to the day on which the meeting shall take place.

 

3.                           Notwithstanding the possibility for the holders of Preference Shares to agree to convene a meeting elsewhere and notwithstanding the option to pass resolutions in writing in accordance with Article 22, any meeting shall be held in the Netherlands at the place notified in convocation.

 

4.                           In all other respects Articles 18 through 22 shall apply mutatis mutandis.

 

Financial Year. Annual accounts.

 

Article 25.

 

1.                            The financial year of the Company shall be equal to the calendar year.

 

2.                            Each year within five months after the end of the Company’s financial year, save where this term is extended by a maximum of six months by the General Meeting on account of special circumstances, the Board of Directors shall draw up annual accounts and an annual report on that financial year. To these documents shall be added the particulars referred to in Section 392, sub-section 1, of Book 2. However, if the provisions of Section 403 of Book 2 have been applied to the Company and if and to the extent that the General Meeting does not decide otherwise:

 

a.                            the obligation to draw up the annual report; and

 

b.                            the obligation to add to the annual accounts the particulars referred to in Section 392 of Book 2 shall not apply.

 

If the Company qualifies as a legal entity in the terms of Section 396 sub-section 1 or Section 397 sub-section 1 of Book 2 the Company shall not be required to make an annual report unless by law the Company must establish a works council or unless no later than six months from the start of the financial year concerned the General Meeting has resolved otherwise.

 

3.                            The annual accounts shall be signed by all Directors. If the signatures of one or more of the Directors are missing, this and the reason for such absence shall be stated.

 

4.                            The Board of Directors shall ensure that the annual accounts and, if required, the annual report and the particulars added by virtue of Section 392 of Book 2 shall be available at the office of the Company as soon as possible but not later than as from the date of notice calling the General Meeting intended for the discussion and approval thereof. Said documents shall be open to the inspection of the Shareholders at the office of the Company and copies thereof may be obtained by them free of charge.

 

Annual General Meeting. Approval of annual accounts.

 

Article 26.

 

1.                            Each year at least one General Meeting shall be held, that meeting to be held within six (6) months after the end of the Company’s last expired financial year.

 

2.                            The annual accounts shall be adopted by the General Meeting.

 

Profits and losses.

 

Article 27.

 

1.                            The distributable profit of the Company shall be at the disposal of the General Meeting. The Board of Directors determines the amount of the profit of the Company

 

25



 

that shall be allocated to the profit reserves and the amount of profit available for distribution.

 

2.                            The Company may distribute profit only if and to the extent that its equity exceeds the sum of the paid and called-up part of the issued capital and the reserves which must be maintained by virtue of the law.

 

3.                            If and when the Board of Directors proposes to allocate or distribute a profit, first of all the holders of Preference Shares shall be entitled to an amount equal to the 12-month European Inter Bank Offered Rate per first day of the financial year of the Company in relation to which the relevant dividend entitlement is calculated, increased with two hundred (200) basis points, of the issued and paid-up capital of the Preference Shares. The holders of Ordinary Shares and the Priority Share shall be entitled pari passu to the remainder profits of the Company after any distribution is made pursuant to the first sentence of this paragraph, pro rata to the total number of Class A Ordinary Shares, Class B Ordinary Shares, Class C Ordinary Shares and/or the Priority Share held, albeit that the holders of Class C Ordinary Shares shall be entitled to a maximum amount of one eurocent (EUR 0.01) per Class C Ordinary Share out of the profit in any one financial year.

 

4.                            Dividends may be paid only after approval and adoption of the annual accounts which show that they are justified.

 

5.                            For the purposes of determining the allocation of profits, any Shares held by the Company (except as otherwise provided in paragraph 7 of Article 10), and any Shares of which the Company has a usufruct, shall not be taken into account.

 

6.                            The Board of Directors may resolve to declare interim dividends out of the profits realised in the current financial year. Dividend payments as referred to in this paragraph may be made only if the provision in paragraph 2 of this Article has been met as evidenced by an interim statement of assets and liabilities as referred to in Section 105 subsection 4 of Book 2.

 

7.                            Any distributions made from the Company reserves shall be made only at the proposal of the Board of the Directors and with due observance of the provisions of paragraph 3 of this Article.

 

8.                            Unless the General Meeting sets a different term for that purpose, dividends shall be made payable within thirty (30) days after they are declared.

 

9.                            The Board of Directors may resolve that dividends are satisfied in whole or in part by the distribution of assets or the issue of Shares.

 

10.                     Any deficit may be set off against the statutory reserves only if and to the extent permitted by law.

 

Amendment of Articles of Association. Merger. Demerger. Division.

 

Article 28.

 

1.                            Upon receipt of a written proposal of the Board of Directors to this effect, the General Meeting may resolve to amend the Articles of Association, to conclude a legal merger or demerger or to dissolve the Company in the terms of Part 7 of Book 2.

 

2.                           For the adoption of a resolution to amend the Articles of Association, to conclude a legal merger or demerger, in the terms of Part 7 of Book 2, or to dissolve the Company, a two/thirds (2/3) majority of the votes cast in the General Meeting is required.

 

3.                            For the adoption of a resolution to amend the Articles of Association in which (a) the rights, including but not limited to the calculation of entitlement to any profits, of

 

26



 

holders of Class A Ordinary Shares are taken away/affected, including but not limited to any change in the dividend or liquidation entitlement of the holders of Class B Ordinary Shares or Class C Ordinary Shares; (b) the definitions of  “Affiliate”,  “Initial Qualified Holder”, “Non-Qualified B Holder”,  “Permitted Transferee”, “Qualified B Holder” or “Transfer” are changed; (c) any amendment is made to Article 4A, Article 4B or this Article 28; or (d) the number of authorized Class B Ordinary Shares is to be increased; the prior approval of the Meeting of holders of Class A Ordinary Shares is required, which resolution requires a three/fourth (3/4) majority of the votes cast at such meeting.

 

4.                            For the adoption of a resolution to amend the Articles of Association in which the rights of the Priority are affected (including but not limited to the number of Priority Shares included in the authorized capital of the Company), the prior approval of the Priority is required.

 

5.                            For the adoption of a resolution to amend the Articles of Association in which the rights of the Preference Shares are affected (including but not limited to the number of Preference Shares included in the authorized capital of the Company), the prior approval of the Meeting of holders of Preference Shares is required.

 

Winding up and liquidation.

 

Article 29.

 

1.                            The General Meeting shall have the power to resolve to wind up the Company, provided with due observance of the requirement laid down in Article 28.

 

2.                            Unless otherwise resolved by the General Meeting or unless otherwise provided by law, the Directors of the Company shall be the liquidators of the Company.

 

3.                            The surplus assets remaining after (i) all the Company’s liabilities have been satisfied, (ii) all profit reserves and other dividend entitlements have been distributed, shall be divided among the holders of the Ordinary Shares pro rata to the total number of Class A Ordinary Shares, Class B Ordinary Shares and/or Class C Ordinary Shares they hold, albeit that the holders of Class C Ordinary Shares shall be entitled to a maximum amount of one eurocent (EUR 0.01) per Class C Ordinary Share.

 

4.                            After completion of the liquidation the books, records and other data-carriers of the dissolved Company shall for a period of seven years remain in the custody of the person whom the liquidators have appointed for that purpose in writing.

 

Final provision.

 

Today, the issued share capital of the company amounts to seventeen million one hundred three thousand nine hundred seventy-two euro and thirteen eurocent (EUR 17,103,972.13), divided in:

 

·                                two hundred thirty-three million six hundred thirty-eight thousand two hundred fifteen (233,638,215) Class A Ordinary Shares, each with a par value of one eurocent (EUR 0.01);

 

·                                ninety-six million thirty-four thousand two hundred sixty-six (96,034,266) Class B Ordinary Shares, each with a par value of ten eurocent (EUR 0.10);

 

·                                fifty-seven million three hundred seventy-nine thousand five hundred eighty-two (57,379,582) Class C Ordinary Shares, each with a par value of nine eurocent (EUR 0.09);

 

·                                one (1) Priority Share, with a par value of one euro (EUR 1.00).

 

Conclusion deed.

 

The appearer is known to me, civil-law notary.

 

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This deed is executed in Amsterdam on the date mentioned in the heading of this deed. After the substance of this deed and an explanation thereon have been stated to the appearer, the appearer has declared to have taken notice of the contents of this deed and to consent thereto. Immediately after those parts of the deed that the law requires to be read out have been read out, this deed is signed by the appearer and by me, civil-law notary.

 

28




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Exhibit 99.2


YANDEX N.V.
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 
  Page  

Unaudited Condensed Consolidated Balance Sheets as of December 31, 2012 and September 30, 2013

    F-2  

Unaudited Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2012 and 2013

    F-3  

Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2012 and 2013

    F-4  

Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2013

    F-5  

Notes to Unaudited Condensed Consolidated Financial Statements

   
F-6
 

F-1



YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of Russian rubles ("RUR") and U.S. dollars ("$"), except share and per share data)

 
  As of  
 
  Notes   December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
   
  RUR
  RUR
  $
 

ASSETS

                         

Current assets:

                         

Cash and cash equivalents

    6     7,425     11,382     351.9  

Marketable securities

    9     76     79     2.4  

Term deposits

          4,629     470     14.5  

Accounts receivable, net

    7     1,767     2,286     70.7  

Prepaid expenses

          597     666     20.7  

Assets held for sale

    5     2,024          

Deferred tax assets

          456     580     17.9  

Other current assets

    8     1,217     1,080     33.4  
                     

Total current assets

          18,191     16,543     511.5  

Property and equipment, net

    12     8,095     8,970     277.3  

Intangible assets, net

    13     323     275     8.5  

Goodwill

          750     770     23.8  

Long-term prepaid expenses

          695     759     23.5  

Restricted cash

    6     214     93     2.9  

Term deposits

          10,330     17,330     535.8  

Investments in non-marketable equity securities

    9     500     1,232     38.1  

Investments in debt securities

    9     4,810     2,589     80.0  

Deferred tax assets

          35     137     4.2  

Other non-current assets

    8     342     1,444     44.6  
                     

TOTAL ASSETS

          44,285     50,142     1,550.2  
                     

LIABILITIES AND SHAREHOLDERS' EQUITY

                         

Current liabilities:

                         

Accounts payable and accrued liabilities

    14     2,513     3,323     102.7  

Taxes payable

          1,455     1,160     35.9  

Deferred revenue

          1,092     1,292     39.9  

Liabilities related to assets held for sale

    5     1,619          

Deferred tax liabilities

          3     48     1.5  
                     

Total current liabilities

          6,682     5,823     180.0  

Deferred tax liabilities

          448     392     12.1  

Other accrued liabilities

          108     63     2.0  
                     

Total liabilities

          7,238     6,278     194.1  

Commitments and contingencies

    15                    

Shareholders' equity:

                         

Priority share: €1 par value; 1 share authorized, issued and outstanding

                   

Preference shares: €0.01 par value; 2,000,000,001 shares authorized, nil shares issued and outstanding

                   

Ordinary shares: par value (Class A €0.01, Class B €0.10 and Class C €0.09); shares authorized (Class A: 2,000,000,000 and 2,000,000,000, Class B: 159,494,722 and 102,115,140, and Class C: 159,494,722 and 102,115,140); shares issued (Class A: 202,318,864 and 256,284,925, Class B: 125,441,218 and 73,636,828, and Class C: 27,972,630 and 22,397,438, respectively); shares outstanding (Class A: 202,318,864 and 252,215,907, Class B: 125,441,218 and 73,636,828, and Class C: nil)

          445     245     7.6  

Treasury shares at cost (Class A: nil and 4,069,018, and Class B: nil and nil)

              (3,883 )   (120.0 )

Additional paid-in capital

          13,617     13,461     416.2  

Accumulated other comprehensive income

    4     961     1,888     58.2  

Retained earnings

          22,024     32,153     994.1  
                     

Total shareholders' equity

          37,047     43,864     1,356.1  
                     

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

          44,285     50,142     1,550.2  
                     

   

The accompanying notes are an integral part of the unaudited condensed consolidated
financial statements.

F-2



YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions of Russian rubles and U.S. dollars, except share and per share data)

 
   
  Three months ended
September 30,
  Nine months ended
September 30,
 
 
  Notes   2012   2013   2013   2012   2013   2013  
 
   
  RUR
  RUR
  $
  RUR
  RUR
  $
 

Revenues

    17     7,273     10,218     315.9     19,948     27,416     847.6  

Operating costs and expenses:

                                           

Cost of revenues(1)

          1,845     2,931     90.6     5,112     7,065     218.4  

Product development(1)

          1,034     1,467     45.4     3,159     4,176     129.1  

Sales, general and administrative(1)

          1,117     1,661     51.3     3,239     4,554     140.8  

Depreciation and amortization

          734     914     28.3     2,091     2,705     83.6  
                                 

Total operating costs and expenses

          4,730     6,973     215.6     13,601     18,500     571.9  
                                 

Income from operations

          2,543     3,245     100.3     6,347     8,916     275.7  

Interest income

          268     483     14.9     669     1,303     40.3  

Other income, net

          147     2,022     62.6     76     2,065     63.8  
                                 

Net income before income taxes

          2,958     5,750     177.8     7,092     12,284     379.8  

Provision for income taxes

          667     783     24.2     1,560     2,156     66.7  
                                 

Net income

          2,291     4,967     153.6     5,532     10,128     313.1  
                                 

Net income per Class A and Class B share:

                                           

Basic

    3     7.01     15.22     0.47     16.98     30.94     0.96  
                                 

Diluted

    3     6.82     14.88     0.46     16.50     30.20     0.93  
                                 

Weighted average number of Class A and Class B shares outstanding

                                           

Basic

    3     326,705,954     326,292,219     326,292,219     325,774,183     327,305,297     327,305,297  

Diluted

    3     335,732,348     333,719,636     333,719,636     335,327,826     335,342,605     335,342,605  

(1)
These balances exclude depreciation and amortization expenses, which are presented separately, and include share-based compensation expenses of:

Cost of revenues

          7     20     0.6     19     43     1.3  

Product development

          59     134     4.1     151     307     9.5  

Sales, general and administrative

          40     75     2.3     91     181     5.6  

   

The accompanying notes are an integral part of the unaudited condensed consolidated
financial statements.

F-3



YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of Russian rubles and U.S. dollars, except share and per share data)

 
   
  Three months ended
September 30,
  Nine months ended
September 30,
 
 
  Notes   2012   2013   2013   2012   2013   2013  
 
   
  RUR
  RUR
  $
  RUR
  RUR
  $
 

Net income

          2,291     4,967     153.6     5,532     10,128     313.1  

Other comprehensive income/ (loss):

                                           

Foreign currency translation adjustment, net of tax, nil

    4     (942 )   (81 )   (2.5 )   (607 )   927     28.7  
                                 

Total other comprehensive income/ (loss)

          (942 )   (81 )   (2.5 )   (607 )   927     28.7  
                                 

Total comprehensive income

          1,349     4,886     151.1     4,925     11,055     341.8  
                                 

   

The accompanying notes are an integral part of the unaudited condensed consolidated
financial statements.

F-4



YANDEX N.V.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Russian rubles and U.S. dollars)

 
   
  Nine months ended
September 30,
 
 
  Notes   2012   2013   2013  
 
   
  RUR
  RUR
  $
 

CASH FLOWS FROM OPERATING ACTIVITIES:

                         

Net income

          5,532     10,128     313.1  

Adjustments to reconcile net income to net cash provided by operating activities:

                         

Depreciation and amortization of property and equipment

          2,022     2,639     81.6  

Amortization of acquisition-related intangible assets

          69     66     2.0  

Share-based compensation expense

          261     531     16.4  

Deferred income taxes

          111     (255 )   (7.9 )

Foreign exchange losses/(gains)

          74     (40 )   (1.2 )

Gain from sale of equity securities

          (234 )   (2,137 )   (66.1 )

Other

          75     (22 )   (0.6 )

Changes in operating assets and liabilities excluding the effect of acquisitions and disposals:

                         

Accounts receivable, net

          (195 )   (516 )   (16.0 )

Prepaid expenses and other assets

          (839 )   (877 )   (27.1 )

Accounts payable and accrued liabilities

          755     275     8.5  

Deferred revenue

          28     195     6.0  

Assets held for sale

          (105 )   (156 )   (4.8 )

Liabilities related to assets held for sale

          122     86     2.6  
                     

Net cash provided by operating activities

          7,676     9,917     306.5  
                     

CASH FLOWS USED IN INVESTING ACTIVITIES:

                         

Purchase of property and equipment

          (2,984 )   (3,271 )   (101.1 )

Investments in non-marketable equity securities

              (2 )   (0.1 )

Proceeds from sale of equity securities

    5     174     2,023     62.6  

Proceeds from maturity of debt securities

          715     2,301     71.1  

Investments in term deposits

          (10,235 )   (11,450 )   (354.0 )

Maturities of term deposits

          3,724     8,670     268.0  

Escrow cash deposit

              130     4.0  

Loans granted

              (170 )   (5.2 )
                     

Net cash used in investing activities

          (8,606 )   (1,769 )   (54.7 )
                     

CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES:

                         

Proceeds from exercise of share options

          305     378     11.7  

Repurchases of ordinary shares

              (5,150 )   (159.2 )
                     

Net cash provided by/(used in) financing activities

          305     (4,772 )   (147.5 )
                     

Effect of exchange rate changes on cash and cash equivalents

          (109 )   581     18.0  
                     

Net change in cash and cash equivalents

          (734 )   3,957     122.3  

Cash and cash equivalents at beginning of period

          5,930     7,425     229.6  
                     

Cash and cash equivalents at end of period

          5,196     11,382     351.9  
                     

Supplemental disclosure of cash flow information:

                         

Cash paid for income taxes

          1,457     2,173     67.2  

Non-cash investing activities:

                         

Change in accounts payable for property and equipment

          252     179     5.5  

Non-cash consideration from sale of equity securities

    5     144          

Non-cash consideration for purchase of equity securities

              112     3.5  

   

The accompanying notes are an integral part of the unaudited condensed consolidated
financial statements.

F-5



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions of Russian rubles and U.S. dollars, except share and per share data)

1. ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Yandex N.V., together with its consolidated subsidiaries (together, the "Company"), is an internet and technology company and operates Russia's largest internet search engine. The Company generates substantially all of its revenues from online advertising. Until July 2013, it also generated revenues from online payment commissions through PS Yandex.Money LLC and its subsidiary NBCO Yandex.Money LLC (together, "Yandex.Money"). In July 2013, the Company completed its sale of a 75% less one ruble interest in Yandex.Money to OJSC Sberbank of Russia ("Sberbank") (Note 5).

Yandex N.V. was incorporated under the laws of the Netherlands in June 2004 and is the holding company of Yandex LLC, incorporated in the Russian Federation in October 2000, and other subsidiaries.

The Company operates in a single segment.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and the Company believes that the disclosures are adequate to ensure the information is not misleading. Operating results for the three- and nine-month periods ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.

The condensed consolidated balance sheet as of December 31, 2012 has been derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP for annual financial statements.

The accompanying unaudited condensed consolidated financial statements for the three- and nine-month periods ended September 30, 2013 should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 20-F for the year ended December 31, 2012. Our significant accounting policies have not changed since December 31, 2012.

The preparation of interim financial statements, in conformity with U.S. GAAP for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates relate to share-based compensation, accounts receivable allowances, valuation of assets and liabilities in business combinations, useful lives of intangible assets and property and equipment, impairment

F-6



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

assessments, contingencies and income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Effective January 1, 2013, the Company adopted the Financial Accounting Standards Board ("FASB") accounting standards updates on disclosures about offsetting assets and liabilities and reporting of amounts reclassified out of accumulated other comprehensive income. The adoption of these updates did not have a significant impact on the Company's consolidated financial position, results of operations, cash flows or disclosures.

Effective January 1, 2013, the Company adopted the FASB accounting standards update on the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. For other amounts not required to be reclassified in their entirety to net income in the same reporting period, a cross reference to other disclosures that provide additional detail about the reclassification amounts is required. The adoption of this update did not have a significant impact on the Company's consolidated financial position, results of operations, cash flows, or disclosures. Refer to Note 4 for disclosure of reclassifications for the three- and nine-month periods ended September 30, 2012 and 2013.

In July 2013, the FASB issued an accounting standards update on presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. The Company does not expect the adoption of this guidance to have a material effect on its financial statements.

3. NET INCOME PER SHARE

Basic net income per Class A share and Class B share for the three- and nine-month periods ended September 30, 2012 and 2013 is computed on the basis of the weighted average number of ordinary shares outstanding using the two class method. Basic net income per share is computed using the weighted average number of ordinary shares outstanding during the period including restricted shares. Diluted net income per ordinary share is computed using the effect of outstanding share-based awards granted by the Company and described below (Note 16) ("Share-Based Awards") calculated using the "treasury stock" method.

The computation of the diluted net income per Class A share assumes the conversion of Class B shares, while the diluted net income per Class B share does not assume the conversion of those

F-7



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

3. NET INCOME PER SHARE (Continued)

shares. The net income per share amounts are the same for Class A and Class B because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. The number of Share-Based Awards excluded from the diluted net income per ordinary share computation, because their effect was antidilutive for the three- and nine-month periods ended September 30, 2012 and 2013 was 1,362,341 and 708,000 and 1,414,111 and 1,678,477, respectively.

The components of basic and diluted net income per share were as follows:

 
  For the three months ended September 30,  
 
  2012   2013  
 
  Class A   Class B   Class A   Class A   Class B   Class B  
 
  RUR
  RUR
  RUR
  $
  RUR
  $
 

Net income, allocated for basic

    1,307     984     3,666     113.4     1,301     40.2  

Reallocation of net income as a result of conversion of Class B to Class A shares

    984         1,301     40.2          

Reallocation of net income to Class B shares

        6             12     0.4  
                           

Net income, allocated for diluted

    2,291     990     4,967     153.6     1,313     40.6  

Weighted average ordinary shares outstanding—basic

    186,416,244     140,289,710     240,835,896     240,835,896     85,456,323     85,456,323  

Dilutive effect of:

                                     

Conversion of Class B to Class A shares

    140,289,710         85,456,323     85,456,323          

Ordinary Share-Based Awards

    9,026,394     4,791,086     7,427,417     7,427,417     2,750,706     2,750,706  
                           

Weighted average ordinary shares outstanding—diluted

    335,732,348     145,080,796     333,719,636     333,719,636     88,207,029     88,207,029  
                           

Net income per share attributable to ordinary shareholders:

                                     

Basic

    7.01     7.01     15.22     0.47     15.22     0.47  
                           

Diluted

    6.82     6.82     14.88     0.46     14.88     0.46  
                           

F-8



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

3. NET INCOME PER SHARE (Continued)


 
  For the nine months ended September 30,  
 
  2012   2013  
 
  Class A   Class B   Class A   Class A   Class B   Class B  
 
  RUR
  RUR
  RUR
  $
  RUR
  $
 

Net income, allocated for basic

    2,969     2,563     7,079     218.8     3,049     94.3  

Reallocation of net income as a result of conversion of Class B to Class A shares

    2,563         3,049     94.3          

Reallocation of net income to Class B shares

        15             29     0.9  
                           

Net income, allocated for diluted

    5,532     2,578     10,128     313.1     3,078     95.2  

Weighted average ordinary shares outstanding—basic

    174,842,541     150,931,642     228,766,429     228,766,429     98,538,868     98,538,868  

Dilutive effect of:

                                     

Conversion of Class B to Class A shares

    150,931,642         98,538,868     98,538,868          

Ordinary Share-Based Awards

    9,553,643     5,368,573     8,037,308     8,037,308     3,389,026     3,389,026  
                           

Weighted average ordinary shares outstanding—diluted

    335,327,826     156,300,215     335,342,605     335,342,605     101,927,894     101,927,894  
                           

Net income per share attributable to ordinary shareholders:

                                     

Basic

    16.98     16.98     30.94     0.96     30.94     0.96  
                           

Diluted

    16.50     16.50     30.20     0.93     30.20     0.93  
                           

4. COMPREHENSIVE INCOME

U.S. GAAP requires the reporting of comprehensive income in addition to net income. Comprehensive income includes foreign currency translation adjustments. For the three- and nine-month periods ended September 30, 2012 and 2013, total comprehensive income included, in addition to net income, the effect of translating the financial statements of the Company and its subsidiaries domiciled outside of Russia into Russian rubles.

Accumulated other comprehensive income of RUR 961 as of December 31, 2012 and RUR 1,888 ($58.2) as of September 30, 2013 solely comprises cumulative foreign currency translation adjustments.

Reclassifications of losses out of accumulated other comprehensive income for the three- and nine-month periods ended September 30, 2013 were as follows:

 
   
  For the three
months ended
September 30,
 
 
  Location   2012   2013  
 
   
  RUR
  RUR
  $
 

Foreign Currency Translation Adjustments

  Other income, net         54     1.7  

 

 
   
  For the nine
months ended
September 30,
 
 
  Location   2012   2013  
 
   
  RUR
  RUR
  $
 

Foreign Currency Translation Adjustments

  Other income, net         54     1.7  

F-9



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

5. BUSINESS COMBINATIONS AND INVESTMENT TRANSACTIONS

In July 2013, the Company completed the sale of a 75% less one ruble interest in the charter capital of Yandex.Money to Sberbank for a cash consideration for RUR 1,964 ($60.7). A gain on sale and deconsolidation of the subsidiary in the amount of RUR 2,035 ($62.9) was recognized as other income, net.

The Company retained a non-controlling interest (25% plus one ruble) and significant influence over Yandex.Money's business as its electronic money system continues to be one of the primary payment means for the Company's advertising services. Accordingly, Yandex.Money's results of operations before the sale of a 75% less one ruble interest are classified within continuing operations and the remaining investment is accounted under the equity method within Investments in non-marketable equity securities.

Yandex.Money's assets held for sale and liabilities related to assets held for sale as of December 31, 2012 and July 4, 2013 (the date of sale) consisted of the following:

 
  December 31,
2012
  July 4,
2013
  July 4,
2013
 
 
  RUR
  RUR
  $
 

Assets held for sale

                   

Cash and cash equivalents

    1,164     1,195     36.9  

Term deposits

    150     280     8.7  

Funds receivable, net

    190     192     5.9  

Goodwill

    378     378     11.7  

Other

    142     120     3.7  
               

Total assets held for sale

    2,024     2,165     66.9  
               

Liabilities related to assets held for sale

                   

Funds payable and amounts due to customers

    1,596     1,653     51.1  

Other

    23     51     1.6  
               

Total liabilities related to assets held for sale

    1,619     1,704     52.7  
               

F-10



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

5. BUSINESS COMBINATIONS AND INVESTMENT TRANSACTIONS (continued)

In July 2012, the Company completed the acquisition of a 25% ownership interest in Seismotech LLC ("Seismotech"), a Russian-based geophysical data processing company, for RUR 27. The Company also has a 3-year option to buy another 25% interest in Seismotech at a fixed price that is accounted for at fair value (Notes 10 and 11). The Company exercises significant influence over Seismotech and accordingly accounts for this investment under the equity method.

In July 2012, the Company completed the sale of its ownership interest in Face.com, Inc. (formerly Vizi Information Labs Ltd. ("Vizi Labs")) to a subsidiary of Facebook, Inc. ("Facebook") for a cash consideration of RUR 174 and 142,479 shares of Facebook. A gain on sale in the amount of RUR 234 was recognized as other income, net.

6. CASH AND CASH EQUIVALENTS, NON-CURRENT RESTRICTED CASH

Cash and cash equivalents as of December 31, 2012 and September 30, 2013 consisted of the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

Cash

    926     2,772     85.7  

Cash equivalents:

                   

Bank deposits

    5,530     2,494     77.1  

Investments in money market funds

    969     6,116     189.1  
               

Total cash and cash equivalents

    7,425     11,382     351.9  
               

Non-current restricted cash as of December 31, 2012 and September 30, 2013 consisted of the cash reserved in a special escrow account to pay for the contingent consideration in relation to the acquisition of SPB Software group in November 2011.

7. ACCOUNTS RECEIVABLE, NET

Accounts receivable as of December 31, 2012 and September 30, 2013 consisted of the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

Trade receivables

    1,842     2,349     72.6  

Allowance for doubtful accounts

    (75 )   (63 )   (1.9 )
               

Total accounts receivable, net

    1,767     2,286     70.7  
               

F-11



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

8. OTHER CURRENT AND NON-CURRENT ASSETS

Other current assets as of December 31, 2012 and September 30, 2013 consisted of the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

VAT reclaimable

    502     568     17.6  

Interest receivable

    558     234     7.2  

Prepaid taxes

    18     132     4.1  

Other receivables

    85     107     3.3  

Inventory

    8     3     0.1  

Other

    46     36     1.1  
               

Total other current assets

    1,217     1,080     33.4  
               

Other non-current assets as of December 31, 2012 and September 30, 2013 consisted of the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

Interest receivable

        805     24.9  

Loans to employees

    199     367     11.3  

Other receivables

    68     158     4.9  

Marketable securities (Note 9)

    39          

Other

    36     114     3.5  
               

Total other non-current assets

    342     1,444     44.6  
               

9. INVESTMENTS IN DEBT AND EQUITY SECURITIES

Investments in debt securities as of December 31, 2012 and September 30, 2013 consisted of the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

Capital protected index-linked note (Note 11)

    2,378          

Credit-linked notes

    2,430     2,588     80.0  

Other

    2     1      
               

Total investments in debt securities

    4,810     2,589     80.0  
               

F-12



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

9. INVESTMENTS IN DEBT AND EQUITY SECURITIES (Continued)

Investments in equity securities as of December 31, 2012 and September 30, 2013 consisted of the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

Blekko

    456     597     18.5  

Yandex.Money (Note 5)

        585     18.1  

Seismotech (Note 5)

    35     36     1.1  

Other

    9     14     0.4  
               

Total investments in non-marketable equity securities

    500     1,232     38.1  
               

Marketable securities of RUR 76 and RUR 79 ($2.4) and non-current marketable securities of RUR 39 and nil as of December 31, 2012 and September 30, 2013, respectively, are comprised of shares of Facebook received in connection to the sale of Face.com (Note 5). The non-current portion of marketable securities is presented within other non-current assets within the consolidated balance sheet.

10. DERIVATIVE FINANCIAL INSTRUMENTS

The Company does not enter into derivative arrangements for hedging, trading or speculative purposes. However, some of the Company's contracts have embedded derivatives that are bifurcated and accounted for separately from the host agreements. None of these derivatives are designated as hedging instruments.

The Company recognizes such derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value and records changes in the fair value of the derivatives in the accompanying consolidated statements of income as other income, net.

The fair value of derivative instruments as of December 31, 2012 and September 30, 2013 is as follows:

 
  Balance Sheet Location   December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
   
  RUR
  RUR
  $
 

Derivative assets:

                       

Foreign exchange contracts

  Investments in debt securities     12          

Equity purchase contracts

 

Investments in non-marketable equity securities

   
8
   
22
   
0.7
 
                   

Total derivative assets

        20     22     0.7  
                   

Derivative liabilities:

                       

Foreign exchange contracts

  Accounts payable and accrued liabilities     1          

Foreign exchange contracts

  Other accrued liabilities     49     20     0.6  
                   

Total derivative liabilities

        50     20     0.6  
                   

The effect of derivative instruments not designated as hedging instruments on income for the nine month periods ended September 30, 2012 and 2013 amounted to a loss of RUR 31 and a gain of RUR 17 ($0.5), respectively.

F-13



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

11. FAIR VALUE MEASUREMENTS

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1—observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2—inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3—inputs for the asset or liability that are not based on observable market data (unobservable inputs). The fair value of financial assets and liabilities as of December 31, 2012 consisted of the following:

 
  Fair value measurement using  
 
  Level 1   Level 2   Level 3   Total  
 
  RUR
  RUR
  RUR
  RUR
 

Assets

                         

Cash equivalents:

                         

Bank deposits(1)

        5,530         5,530  

Investments in money market funds

    969             969  

Term deposits, current

        4,629         4,629  

Term deposits, non-current

        10,330         10,330  

Marketable securities, current(2)

    76             76  

Marketable securities, non-current(2)

    39             39  

Restricted cash

    214             214  

Loans to employees

        199         199  

Derivative contracts (Notes 5, 10)(2)

            8     8  

Capital protected index-linked note—host contract (Note 9)

        2,366         2,366  

Capital protected index-linked note—derivative(2) (Note 9)

        12         12  
                   

    1,298     23,066     8     24,372  
                   

Liabilities

                         

Derivative contracts(2)

        50         50  

(1)
Bank deposits with original maturities of three months or less are included in cash equivalents. Bank deposits with maturities of more than three months are classified as term deposits.

(2)
Amounts are measured at fair value on a recurring basis.

F-14



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

11. FAIR VALUE MEASUREMENTS (Continued)

The fair value of financial assets and liabilities as of September 30, 2013 consisted of the following:

 
  Fair value measurement using  
 
  Level 1   Level 2   Level 3   Total   Total  
 
  RUR
  RUR
  RUR
  RUR
  $
 

Assets

                               

Cash equivalents:

                               

Bank deposits(1)

        2,494         2,494     77.1  

Investments in money market funds

    6,116             6,116     189.1  

Term deposits, current

        470         470     14.5  

Term deposits, non-current

        17,330         17,330     535.8  

Marketable securities, current(2)

    79             79     2.4  

Restricted cash

    93             93     2.9  

Loans to employees

        367         367     11.3  

Loans granted

        169         169     5.2  

Derivative contracts (Notes 5, 10)(2)

            22     22     0.7  
                       

    6,288     20,830     22     27,140     839.0  
                       

Liabilities

                               

Derivative contracts(2)

        20         20     0.6  

(1)
Bank deposits with original maturities of three months or less are included in cash equivalents. Bank deposits with maturities of more than three months are classified as term deposits.

(2)
Amounts are measured at fair value on a recurring basis.

The fair values of the Company's Level 1 financial assets are based on quoted market prices of the identical underlying securities. The fair values of the Company's Level 2 financial assets and liabilities are based on quoted prices and market observable data of similar instruments.

There were no transfers of financial assets and liabilities between the levels of the fair value hierarchy during the three- and nine-month periods ended September 30, 2012 and 2013.

The total gains attributable to bank deposits and investments in money market funds amounted to RUR 610 and RUR 1,234 ($38.2) for the nine-month periods ended September 30, 2012 and 2013, respectively. Such amounts are included in interest income in the consolidated statements of income.

The Company had no other financial assets or liabilities measured at fair value on a recurring basis during the nine-month periods ended September 30, 2012 and 2013. The Company measures at fair value nonfinancial assets and liabilities recognized as a result of business combinations.

F-15



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

11. FAIR VALUE MEASUREMENTS (Continued)

The Company measures the fair value of investments in debt instruments carried at amortized cost for disclosure purposes. The carrying amounts and fair values of debt securities as of December 31, 2012 and September 30, 2013 were as follows:

 
  December 31, 2012    
   
   
   
 
 
  September 30, 2013  
 
  Carrying amount    
 
 
  Fair value   Carrying amount   Fair value  
 
  RUR
  RUR
  RUR
  $
  RUR
  $
 

Credit-linked notes

    2,430     2,404     2,588     80.0     2,575     79.6  
                           

Total

    2,430     2,404     2,588     80.0     2,575     79.6  
                           

The Company does not estimate the fair value of non-marketable equity investments carried at cost because it did not identify events or changes in circumstances that might have had a significant adverse effect on the fair value of these investments. Furthermore, the Company believes it is not practicable to estimate the fair value of these equity investments since quoted market prices are not available and the cost of obtaining independent valuations appears excessive considering the materiality of the investments to the Company.

12. PROPERTY AND EQUIPMENT, NET

Property and equipment, net of accumulated depreciation and amortization, as of December 31, 2012 and September 30, 2013 consisted of the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

Servers and network equipment

    7,517     9,394     290.4  

Infrastructure systems

    3,092     3,295     101.9  

Land and buildings

    823     995     30.8  

Office furniture and equipment

    731     910     28.1  

Leasehold improvements

    577     625     19.3  

Other equipment

    82     64     1.9  

Assets not yet in use

    568     1,021     31.6  

Purchased technologies and licenses

    1,598     2,163     66.9  
               

Total

    14,988     18,467     570.9  

Less: accumulated depreciation and amortization

    (6,893 )   (9,497 )   (293.6 )
               

Total property and equipment, net

    8,095     8,970     277.3  
               

Assets not yet in use primarily represent computer equipment and other assets under installation, including related prepayments, and comprise the cost of the assets and other direct costs applicable to purchase and installation. Leasehold improvements in the amount of RUR 26 and RUR 17 ($0.5) are included in assets not yet in use as of December 31, 2012 and September 30, 2013, respectively.

Depreciation expenses related to property and equipment, except for purchased technologies and licenses, for the nine-month periods ended September 30, 2012 and 2013 amounted to RUR 1,795

F-16



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

12. PROPERTY AND EQUIPMENT, NET (Continued)

and RUR 2,303 ($71.2), respectively. Amortization expenses related to purchased technologies and licenses for the nine-month periods ended September 30, 2012 and 2013 amounted to RUR 227 and RUR 336 ($10.4), respectively.

Estimated amortization expense over the next five years for purchased technologies and licenses included in property and equipment, net as of September 30, 2013 are as follows:

 
  RUR   $  

For the year ending December 31, 2013

    115     3.6  

For the year ending December 31, 2014

    424     13.1  

For the year ending December 31, 2015

    362     11.2  

For the year ending December 31, 2016

    237     7.3  

For the year ending December 31, 2017

    140     4.3  

Thereafter

    29     0.9  
           

Total

    1,307     40.4  
           

13. INTANGIBLE ASSETS, NET

Intangible assets, net of amortization, as of December 31, 2012 and September 30, 2013 consisted of the following intangible assets acquired as part of business combinations:

 
  December 31, 2012   September 30, 2013  
 
  Cost   Less:
Accumulated
amortization
  Net
carrying
value
  Cost   Less:
Accumulated
amortization
  Net
carrying
value
  Net
carrying
value
 
 
  RUR
  RUR
  RUR
  RUR
  RUR
  RUR
  $
 

Software

    283     (114 )   169     297     (143 )   154     4.7  

Patents and licenses

    161     (66 )   95     166     (96 )   70     2.2  

Customer relationships

    62     (13 )   49     66     (17 )   49     1.5  

Contracts with suppliers

    23     (19 )   4     23     (21 )   2     0.1  

Non-compete agreements

    17     (11 )   6     15     (15 )        
                               

Total intangible assets

    546     (223 )   323     567     (292 )   275     8.5  
                               

Amortization expenses of intangible assets for the nine-month periods ended September 30, 2012 and 2013 were RUR 69 and RUR 66 ($2.0), respectively.

F-17



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

13. INTANGIBLE ASSETS, NET (Continued)

Estimated amortization expense over the next five years for intangible assets included in the accompanying consolidated balance sheet as of September 30, 2013 are as follows:

 
  RUR   $  

For the year ending December 31, 2013

    20     0.7  

For the year ending December 31, 2014

    49     1.5  

For the year ending December 31, 2015

    44     1.4  

For the year ending December 31, 2016

    44     1.3  

For the year ending December 31, 2017

    44     1.3  

Thereafter

    74     2.3  
           

Total

    275     8.5  
           

14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities as of December 31, 2012 and September 30, 2013 comprise the following:

 
  December 31,
2012
  September 30,
2013
  September 30,
2013
 
 
  RUR
  RUR
  $
 

Trade accounts payable and accrued liabilities

    2,081     2,572     79.5  

Salary and other compensation expenses payable/accrued to employees

    432     751     23.2  
               

Total accounts payable and accrued liabilities

    2,513     3,323     102.7  
               

15. COMMITMENTS AND CONTINGENCIES

In December 2008, the Company signed an agreement for a ten-year lease of office space in Moscow. In April 2011, the Company entered into two more lease agreements to increase the size of its rented office space located in its headquarters complex in Moscow for the remaining period of the original lease.

F-18



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

15. COMMITMENTS AND CONTINGENCIES (Continued)

As of September 30, 2013, future minimum lease payments due under this lease and other non-cancellable operating leases for more than one year are as follows:

Payments due in the years ending December 31,
  10-year Moscow lease   Other leases   Total   Total  
 
  RUR
  RUR
  RUR
  $
 

2013

    270     178     448     13.9  

2014

    1,108     616     1,724     53.3  

2015

    1,138     345     1,483     45.8  

2016

    1,169     167     1,336     41.3  

2017

    1,166     59     1,225     37.9  

2018 and thereafter

    426     19     445     13.7  
                   

Total

    5,277     1,384     6,661     205.9  
                   

For the purposes of the disclosure above, the Company assumed the full 10-year period of the lease and no changes in the rented space or rental price.

For the nine-month periods ended September 30, 2012 and 2013, rent expenses under operating leases totaled approximately RUR 1,229 and RUR 1,308 ($40.4), respectively.

In the ordinary course of business, the Company is a party to various legal proceedings, and subject to claims, certain of which relate to copyright infringement. The Company believes that its liability, if any, in all such pending litigation, other legal proceedings or other matters will not have a material effect upon its financial condition, results of operations or the liquidity of the Company.

Emerging markets such as Russia are subject to different risks than more developed markets, including economic, political and social, and legal and legislative risks. Laws and regulations affecting businesses continue to change rapidly and tax and regulatory frameworks are subject to varying interpretations.

In particular, taxes are subject to review and investigation by a number of authorities authorized by law to impose fines and penalties. Although the Company believes it has provided adequately for all tax liabilities based on its understanding of the tax legislation, the above factors may create tax risks for the Company. In addition to the obligations shown in the lease commitments section above, approximately RUR 18 ($0.6) of unrecognized tax benefits have been recorded as liabilities, and the Company is uncertain as to if or when such amounts may be settled. Related to unrecognized tax benefits, the Company has also recorded a liability for potential penalties of RUR 2 ($0.1) and interest of RUR 2 ($0.1). As of September 30, 2013, except for the income tax contingencies described above, the Company accrued RUR 14 ($0.4) for contingencies related to non-income taxes.

F-19



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

15. COMMITMENTS AND CONTINGENCIES (Continued)

The future economic direction of Russia is heavily influenced by the fiscal and monetary policies adopted by the government, together with developments in the legal, regulatory, and political environment.

Because Russia produces and exports large volumes of oil and gas, the Russian economy is particularly sensitive to the price of oil and gas on the world market.

16. SHARE-BASED COMPENSATION

The Company has granted Share-Based Awards to employees and consultants of the Company pursuant to its Third Amended and Restated 2007 Equity Incentive Plan (the "2007 Plan").

The following table summarizes awards activity for the Company under the 2007 Plan:

 
  Options   Share Appreciation Rights
("SARs")
  Restricted Share Units
("RSUs")
 
 
  Quantity   Weighted
average exercise
price per share
  Quantity   Weighted
average exercise
price per share
  Quantity   Weighted
average exercise
price per share
 

Outstanding as of January 1, 2013

    10,133,771   $ 4.42     901,265   $ 20.21     1,871,703      
                                 

Granted

    28,000     27.74     670,000     32.14     776,130      

Exercised

    (3,648,314 )   3.31     (54,025 )   19.33     (103,404 )    

Forfeited

    (100,143 )   6.13     (4,825 )   20.99     (79,419 )    

Cancelled

            (250 )   20.99     (128 )    
                                 

Outstanding as of September 30, 2013

    6,413,314   $ 5.12     1,512,165   $ 25.52     2,464,882      
                                 

F-20



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

16. SHARE-BASED COMPENSATION (Continued)

The following table summarizes information about outstanding and exercisable awards under the 2007 Plan as of September 30, 2013:

 
   
  Awards Outstanding   Awards Exercisable  
Exercise Price ($)
  Type of
award
  Number
outstanding
  Average
Remaining
Contractual
Life (in years)
  Aggregate
Intrinsic
Value
  Number
exercisable
  Average
Remaining
Contractual
Life (in years)
  Aggregate
Intrinsic
Value
 

0.83

  Option     455,000     1.75   $ 16.2     455,000     1.75   $ 16.2  

2.16

  Option     879,018     2.77     30.1     879,018     2.77     30.1  

2.74

  Option     725,300     3.65     24.4     725,300     3.65     24.4  

3.40

  Option     465,700     4.34     15.4     465,700     4.34     15.4  

3.43

  Option     262,845     5.63     8.7     262,845     5.63     8.7  

3.51

  Option     869,089     6.12     28.6     789,839     6.12     26.0  

4.16

  Option     952,068     6.68     30.7     650,318     6.68     21.0  

8.77

  Option     1,608,294     7.10     44.5     943,294     7.10     26.1  

25.00

  Option     168,000     7.65     1.9     94,500     7.65     1.0  

27.74

  Option     28,000     9.65     0.2              
                                   

Total Options

        6,413,314     5.30     200.7     5,265,814     4.93     168.9  

16.95

  SARs     9,375     8.22     0.2     4,102     8.22     0.1  

18.44

  SARs                          

19.00

  SARs     325,000     8.82     5.7     37,500     8.82     0.7  

20.99

  SARs     87,790     8.17     1.3     34,189     8.17     0.5  

21.05

  SARs     400,000     9.13     6.1              

23.19

  SARs     20,000     8.43     0.3     7,500     8.43     0.1  

23.29

  SARs     50,000     9.13     0.7              

32.85

  SARs     620,000     9.82     2.2              
                                   

Total SARs

        1,512,165     9.28     16.5     83,291     8.49     1.4  

nil

  RSUs     2,464,883     9.05     89.8     282,741     8.56     10.3  
                               

Total

        10,390,362     6.77   $ 307.0     5,631,846     5.17   $ 180.6  
                               

The following table summarizes information about non-vested share awards under the 2007 Plan:

 
  Options   SARs   RSUs  
 
  Quantity   Weighted
Average Grant
Date Fair Value
  Quantity   Weighted
Average Grant
Date Fair Value
  Quantity   Weighted
Average Grant
Date Fair Value
 

Non-vested as of January 1, 2013

    2,338,561   $ 4.37     873,449   $ 10.43     1,788,352   $ 19,23  
                                 

Granted

    28,000     13.46     670,000     15.50     776,130     27.30  

Vested

    (1,118,918 )   3.82     (109,750 )   10.54     (302,921 )   18.42  

Forfeited

    (100,143 )   3.73     (4,825 )   12.45     (79,419 )   21.71  
                                 

Non-vested as of September 30, 2013

    1,147,500   $ 5.19     1,428,874   $ 12.83     2,182,142   $ 22.13  
                                 

At September 30, 2013, there was RUR 1,932 ($59.7) of unamortized share-based compensation expense related to unvested share options, RSUs and SARs which is expected to be recognized over a weighted average period of 3.04 years. The Company expects that all but an insignificant

F-21



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

16. SHARE-BASED COMPENSATION (Continued)

portion of options and SARs outstanding will vest and therefore has not applied a forfeiture rate in estimating the total awards expected to vest. The Company expects 1,898,184 out of 2,182,142 RSUs to vest after September 30, 2013. To the extent the actual forfeiture rate is different from the Company's estimate, share-based compensation related to these awards will be different from our expectations.

In January 2009, the Company hired certain former sales and product development employees of Mediaselling LLC ("Mediaselling"). The Company granted some of these former Mediaselling employees performance-based options to purchase an aggregate of 378,000 Class A shares.

The following table summarizes activity for these ex-plan options:

 
  Quantity   Weighted
Average Exercise
Price
 

Outstanding as of January 1, 2013

    273,690   0.01  
             

Exercised

    (231,940 )   0.01  

Cancelled

    (2,800 )   0.01  
             

Outstanding as of September 30, 2013

    38,950   0.01  
             

The following table summarizes information about non-vested ex-plan share options:

 
  Quantity   Weighted
Average
Grant Date
Fair Value
 

Non-vested as of January 1, 2013

    152,600   $ 3.42  
             

Vested

    (149,800 )   3.42  

Cancelled

    (2,800 )   3.42  
             

Non-vested as of September 30, 2013

         
             

As of September 30, 2013, these ex-plan options have a remaining contractual life of 5.62 years; 38,950 outstanding and exercisable ex-plan options have an intrinsic value of RUR 46 ($1.4).

At September 30, 2013, there was no unamortized share-based compensation expense related to unvested ex-plan options.

In November 2011, the Company acquired SPB Software Group and subsequently granted 25,000 RSUs to some of the former SPB Software employees. As of September 30, 2013, these ex-plan RSUs have a remaining contractual life of 8.22 years; 20,250 of these outstanding RSUs have an intrinsic value of RUR 24 ($0.7); 8,438 exercisable ex-plan RSUs have an intrinsic value of RUR 10 ($0.3). These RSUs had a grant date fair value of $16.94 per share, resulting in unamortized share-based compensation expense of RUR 6 ($0.2) that is expected to be recognized over a 2.25 year period.

F-22



YANDEX N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions of Russian rubles and U.S. dollars, except share and per share data)

16. SHARE-BASED COMPENSATION (Continued)

The Company recognized share-based compensation expense of RUR 261 and RUR 531 ($16.4) for the nine- month periods ended September 30, 2012 and 2013, respectively. The Company recognized RUR 3 and RUR 6 ($0.2) in related tax benefits for the nine months ended September 30, 2012 and 2013, respectively.

17. INFORMATION ABOUT REVENUES & GEOGRAPHIC AREAS

The Company's revenues consist of the following, for the three- and nine-month periods ended September 30, 2012 and 2013, respectively:

 
  Three months ended
September 30,
  Nine months ended
September 30,
 
 
  2012   2013   2013   2012   2013   2013  
 
  RUR
  RUR
  $
  RUR
  RUR
  $
 

Advertising revenue(1):

                                     

Text-based advertising:

                                     

Yandex websites

    5,255     7,011     216.8     14,429     19,578     605.3  

Yandex ad network websites

    1,284     2,339     72.3     3,436     5,055     156.3  
                           

Total text-based advertising

    6,539     9,350     289.1     17,865     24,633     761.6  

Display advertising

    580     782     24.2     1,628     2,227     68.8  
                           

Total advertising revenue

    7,119     10,132     313.3     19,493     26,860     830.4  
                           

Online payment commissions

    133     7     0.2     374     394     12.2  

Other revenues

    21     79     2.4     81     162     5.0  
                           

Total revenues

    7,273     10,218     315.9     19,948     27,416     847.6  
  &n