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7/19/12 Employment Offer Letter1/12www.sec.gov/Archives/edgar/data/1011006/000119312512307595/d384719dex101.htm
EX-10.1 2 d384719dex101.htm EMPLOYMENT OFFER LETTER
Exhibit 10.1Execution CopyYahoo! Inc.701 First AvenueSunnyvale, California
July 16, 2012Marissa Mayer Dear Marissa:On behalf of Yahoo! Inc. (“Yahoo!” or the “Company”), I am pleased to offer you the position of President and Chief Executive Officer, reporting to the Company’s Board of Directors (the “Board”), working at the Company’s headquarters at701 First Avenue in Sunnyvale, California. You will be appointed to the Board upon your commencement of employment. Your appointments are subject to approval by the Board and your compensation package as outlined herein issubject to approval of the Compensation Committee of the Board (“Compensation Committee”). For purposes of this letter,your first day of work at Yahoo! will be considered your “Employment Start Date.” Your Employment Start Date will beJuly 17, 2012.
Base Salary.
Your starting annual base salary will be $83,333.33 per month ($1,000,000.00 annually), less applicable taxes,deductions and withholdings, paid semi-monthly and subject to annual review. Yahoo!’s regularly scheduled pay days arecurrently on the 10 and 25 of every month.
Incentive Compensation.
You also will be eligible to participate in the annual Executive Incentive Plan (“EIP”), with a targetincentive of 200% of your annual base salary (the “Target Award”), and a 2012 maximum of 400% of your annual base salaryif you exceed your targets, pro-rated based on the period of time you are employed at Yahoo! in an EIP eligible positionduring the relevant Company fiscal year, less applicable taxes, deductions, and withholdings. Target incentives do notconstitute a promise of payment. To qualify for the EIP
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7/19/12 Employment Offer Letter2/12www.sec.gov/Archives/edgar/data/1011006/000119312512307595/d384719dex101.htm
incentive bonus, you must remain employed with the Company through the date that the incentive bonus is paid (as specifiedin the EIP). Your actual EIP payout will depend on Yahoo! financial performance and, to the extent applicable, theCompensation Committee’s assessment of your individual performance, and any EIP payout is subject to, and governed by,the terms and requirements of the EIP document. EIP bonuses are usually paid in March or April of the year after the fiscalyear for which they are earned.
Annual Equity Awards
. Subject to approval by the Compensation Committee, as a senior leader of Yahoo!, with respect tothe 2012 performance year, you will be entitled to receive equity awards under the Yahoo! Inc. 1995 Stock Plan (the “Stock Plan”) with an aggregate award value of $12 million (the “2012 Annual Grant”), with fifty percent (50%) of such 2012 AnnualGrant in the form of Restricted Stock Units (the “2012 RSUs”) and the remaining fifty percent (50%) of such 2012 AnnualGrant in the form of options to purchase the Company’s common stock (the “2012 Stock Options”). The 2012 RSUs shall beawarded to you on Yahoo!’s first regularly scheduled grant date after your Employment Start Date, which is July 26, 2012 (the“Next Grant Date”). The number of 2012 Stock Options shall be calculated on the Next Grant Date in accordance with theCompany’s option valuation practices, and subject to applicable adjustments in the event of stock splits, stock dividends or other similar capital transactions between calculation and grant. The 2012 Stock Options shall be granted on one of theCompany’s regularly scheduled grant dates in 2012, currently contemplated to be in November, 2012. The 2012 RSUs shallvest equally on the first, second and third anniversaries of the Next Grant Date, and the 2012 Stock Options shall vest in threeequal tranches on the twelve-month, eighteen-month and thirty-month anniversaries of the Next Grant Date, provided that, ineach case, you are employed by the Company on the applicable vesting date or as otherwise provided herein, and providedthat you satisfy the financial and other performance criteria established at the time of grant by the Compensation Committeeafter consultation with you. In the event your 
 
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7/19/12 Employment Offer Letter3/12www.sec.gov/Archives/edgar/data/1011006/000119312512307595/d384719dex101.htm
employment is terminated by the Company without Cause, due to disability (as defined under the Company’s applicable longterm disability plan), by you with Good Reason or as a result of your death, any 2012 RSUs which would have vested withinthe six months after such termination shall immediately vest, and any 2012 Stock Options that would have vested in the sixmonths following termination of employment if the applicable performance criteria was satisfied, shall remain subject tosatisfaction of such performance criteria and, if such criteria is satisfied, vest as if you were employed on such vesting date. Allother 2012 RSUs and 2012 Stock Options shall be immediately forfeited, as shall all unvested 2012 RSUs and 2012 Stock Options in the case of a Cause termination by the Company or a voluntary resignation by you without Good Reason. The2012 RSUs will provide for automatic use of a portion of the 2012 RSUs to cover minimum tax withholding so that you willnot need to make any cash payments to cover such tax withholding.
Make-Whole Restricted Stock Units.
You will also receive a make-whole grant of restricted stock units under the Stock Planwith an aggregate award value of $14 million (“Make-Whole RSUs”), such grant to be made to you on the Next Grant Date.The Make-Whole RSUs will vest as follows: (a) one fifth of four million dollars of Make-Whole RSUs will vest on the 17day of each month of 2012 starting in August and be paid out by the end of such month; (b) one twelfth of seven milliondollars of Make-Whole RSUs will vest on the 17 day of each month in 2013 and be paid out by the end of the month inwhich they vest; and (c) one twelfth of three million dollars of Make-Whole RSUs will vest on the 17 day of each month in2014 and be paid out by the end of the month in which they vest; provided in each case that you are employed by theCompany on the applicable vesting date or, if earlier, will vest (and be paid out) (i) upon the termination of your employment by the Company without Cause, (ii) due to your resignation for 
 
For purposes of the Make-Whole RSUs, the One-Time Retention Award (as provided herein with regard to severance benefits) and the 2012 Annual Grant, “Cause” shall mean termination of your employment with the Company based uponthe occurrence of one or more of the following which, with respect to clauses (1), (2) and (3) below, if curable, and clause(5) below (but only if cure is permitted under its proviso), you have not cured within fourteen (14) days after you receivewritten notice from the Company specifying with reasonable particularity such occurrence: (1) your refusal or materialfailure to perform your job duties and responsibilities (other than by reason of your serious physical or mental illness,injury, or medical condition), (2) your failure or refusal to comply in any material respect with material Company policiesor lawful directives of the Board, (3) your material breach of any contract or agreement between you and the Company(including but not limited to this letter agreement and any Employee Confidentiality and Assignment of InventionsAgreement or similar agreement between you and the Company), or your material breach of any statutory duty, fiduciaryduty or any other obligation that you owe to the Company, (4) your commission of an act of fraud, theft, embezzlement or other unlawful act against the Company or involving its property or assets, (5) your engaging in unprofessional, unethicalor other intentional acts that materially discredit the Company or are materially detrimental to the reputation, character or standing of the Company, provided that, if such act or engagement is not willful misconduct and curable (as determined inthe good faith discretion of the Board), you will be given the opportunity to cure as provided above, or (6) your indictmentor conviction or plea of 
nolo contendre
or guilty plea with respect to any felony or crime of moral turpitude.
 
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