Yahoo 2004 Annual Report Download - page 30

performance and stock price of companies in which we have an equity investment, including Yahoo! Japan; and news
reports relating to trends in our markets or general economic conditions.
In addition, the stock market in general, and the market prices for Internet-related companies in particular, have
experienced volatility that often has been unrelated to the operating performance of such companies. These broad market
and industry fluctuations may adversely affect the price of our stock, regardless of our operating performance. Addition-
ally, volatility or a lack of positive performance in our stock price may adversely affect our ability to retain key
employees, all of whom have been granted stock options.
Anti-takeover provisions could make it more difficult for a third party to acquire us.
We have adopted a stockholder rights plan and initially declared a dividend distribution of one right for each outstanding
share of common stock to stockholders of record as of March 20, 2001. As a result of our two-for-one stock split
effective May 11, 2004, each share of common stock is now associated with one-half of one right. Each right entitles the
holder to purchase one unit consisting of one one-thousandth of a share of our Series A Junior Participating Preferred
Stock for $250 per unit. Under certain circumstances, if a person or group acquires 15 percent or more of our
outstanding common stock, holders of the rights (other than the person or group triggering their exercise) will be able to
purchase, in exchange for the $250 exercise price, shares of our common stock or of any company into which we are
merged having a value of $500. The rights expire on March 1, 2011, unless extended by our Board of Directors. Because
the rights may substantially dilute the stock ownership of a person or group attempting to take us over without the
approval of our board of directors, our rights plan could make it more difficult for a third party to acquire us (or a
significant percentage of our outstanding capital stock) without first negotiating with our board of directors regarding
such acquisition.
In addition, our Board of Directors has the authority to issue up to 10,000,000 shares of Preferred Stock (of which
2,000,000 shares have been designated as Series A Junior Participating Preferred Stock) and to determine the price,
rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action
by the stockholders.
The rights of the holders of our common stock may be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. The issuance of Preferred Stock may have the effect of
delaying, deterring or preventing a change of control of Yahoo! without further action by the stockholders and may
adversely affect the voting and other rights of the holders of our common stock. Further, certain provisions of our charter
documents, including provisions eliminating the ability of stockholders to take action by written consent and limiting the
ability of stockholders to raise matters at a meeting of stockholders without giving advance notice, may have the effect of
delaying or preventing changes in control or management of Yahoo!, which could have an adverse effect on the market
price of our stock. In addition, our charter documents do not permit cumulative voting, which may make it more
difficult for a third party to gain control of our Board of Directors. Further, we are subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which will prohibit us from engaging in a ‘‘business
combination’’ with an ‘‘interested stockholder’’ for a period of three years after the date of the transaction in which the
person became an interested stockholder, even if such combination is favored by a majority of stockholders, unless the
business combination is approved in a prescribed manner. The application of Section 203 also could have the effect of
delaying or preventing a change of control or management.
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