Yahoo 2007 Annual Report Download - page 125

installments over the one-year period following the date of grant. The restricted stock units granted under the
Directors’ Plan will generally be paid in an equivalent number of shares of common stock on the earlier of the date
the non-employee director’s service terminates and the third anniversary of the date of grant, subject to any election
by the non-employee director to defer the payment date.
The Directors’ Plan provides certain benefits that are triggered by certain corporate transactions. In the event
of the dissolution or liquidation of the Company, a sale of all or substantially all of the assets of the Company, or the
merger or consolidation of the Company with or into another corporation in which the Company is not the surviving
corporation or any other capital reorganization in which more than 50% of the shares of the Company entitled to
vote are exchanged (a “Corporate Transaction”), options and restricted stock units granted under the Directors’ Plan
will become fully vested, and the Company will provide each director optionee either a reasonable time within
which to exercise the option or a substitute option with comparable terms as to an equivalent number of shares of
stock of the corporation succeeding the Company or acquiring its business by reason of such Corporate Transaction.
Vested restricted stock units will generally be paid in an equivalent number of shares of common stock immediately
prior to the effectiveness of such Corporate Transaction.
The non-executive Chairman of the board of directors receives an additional annual fee of $275,000 for his
service as Chairman payable in cash. The Company also pays an annual fee to each non-employee director who
serves as the chair of a committee of the board of directors. The fee is $35,000 for the chair of the Audit Committee
and $15,000 for the chair of each of the Compensation, Nominating/Governance and Transaction Committees.
These committee chair fees are payable in cash, but the director may elect to have his or her fee converted into an
award of either stock options or restricted stock units granted under the Directors’ Plan. If the director elects a stock
option, the option would cover a number of shares of the Company’s common stock determined by multiplying his
or her fee by three and dividing the product by the fair market value of a share of the Company’s common stock on
the grant date, which is generally the last day of the calendar quarter for which the applicable fees would have
otherwise been paid. The exercise price of the stock option would be equal to the fair market value of a share of the
Company’s common stock on the grant date. If the director elects a restricted stock unit award, he or she would be
credited with a number of restricted stock units equal to the amount of his or her fee divided by the fair market value
of a share of the Company’s common stock on the grant date, which is generally the last day of the calendar quarter
for which the applicable fees would have otherwise been paid. Any stock option or restricted stock unit award
granted upon conversion of committee chair fees would be fully vested on the grant date.
Each of our non-employee directors will have served for more than six months of the preceding 12 months at
the time of the 2008 annual meeting, and each will therefore be granted an option to purchase 15,000 shares of the
Company’s common stock and 5,000 restricted stock units under the Directors’ Plan if he or she is elected to the
board of directors at the 2008 annual meeting.
The Board has adopted stock ownership guidelines for directors. By the later of three years after joining the
Board or October 20, 2008, each director should own at least 12,000 shares of Yahoo! common stock. Vested but
unpaid restricted stock units count toward satisfaction of this threshold.
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