Yahoo 2007 Annual Report Download - page 142

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Potential Payments Upon Termination or Change in Control
Except for the separation agreements discussed below, the Named Executive Officers were not covered by any
Company plan or agreement that provided severance benefits if their employment had been terminated at the end of
fiscal 2007. However, as noted in the “Compensation Discussion and Analysis” above, the Compensation
Committee approved two change in control severance plans on February 12, 2008 that, together, cover all full-
time employees of the Company, including each of the Named Executive Officers currently employed by the
Company. The material terms of these plans are described in a Form 8-K filed by the Company with the SEC on
February 19, 2008.
Daniel Rosensweig
On December 5, 2006, the Company entered into an agreement with Mr. Rosensweig effecting Mr. Rose-
nsweig’s resignation as Chief Operating Officer of the Company, effective as of March 31, 2007. Under the
Rosensweig Separation Agreement and subject to certain terms and conditions set forth therein, the Company and
Mr. Rosensweig agreed to, among other items, the following:
• Mr. Rosensweig would continue to provide services including transition services between December 5, 2006
and March 31, 2007.
• The Company would pay Mr. Rosensweig a lump sum payment equal to his base salary for the period from
March 31, 2007 through December 31, 2007. Pursuant to this provision, the Company made a severance
payment to Mr. Rosensweig of $375,000. The Company would also pay Mr. Rosensweig $900,000 as his
annual bonus for 2006.
• With respect to the stock options granted to Mr. Rosensweig on May 31, 2006 (the “May Options”), the
portion of such options that would have otherwise vested on May 31, 2007 shall become vested on March 31,
2007 and shall be exercisable in accordance with their terms (including a three year post termination exercise
period). With respect to other options granted to Mr. Rosensweig with an exercise price in excess of the
market price of the Company’s common stock on December 5, 2006 (the “Underwater Options”), the portion
of such options that would have otherwise vested by May 31, 2007 would become vested on March 31, 2007
and the period to exercise all Underwater Options would be extended for three years following March 31,
2007. Mr. Rosensweig’s right to exercise the May Options and Underwater Options would become effective
as follows: exercisable with respect to 60% of the shares subject to such options upon the twelve (12) month
anniversary of March 31, 2007 and with respect to an additional 20% of the shares subject to such options on
each of the twenty-four (24) month and thirty (30) month anniversaries of March 31, 2007. All other options
would continue to vest only through March 31, 2007 and would be exercisable in accordance with their
terms.
• The performance-based restricted stock unit awards granted to Mr. Rosensweig on December 20, 2005 and
May 31, 2006 would become fully vested on March 31, 2007, subject to achievement of the applicable
performance goals under those awards. In addition, a total of 146,667 shares of the time-based restricted
stock award granted to Mr. Rosensweig on February 1, 2005 would become fully vested on March 31, 2007.
• Mr. Rosensweig’s right to exercise any of his options following the termination of his employment and his
rights with respect to any accelerated vesting of his restricted stock and restricted stock units are subject to
his compliance with certain covenants in favor of the Company set forth in the Rosensweig Separation
Agreement. In addition, the Rosensweig Separation Agreement includes Mr. Rosensweig’s general release
of claims against the Company.
Farzad Nazem
On May 30, 2007, the Company entered into an agreement with Farzad Nazem providing for Mr. Nazem’s
resignation as Head of Technology Group and Chief Technology Officer of the Company, effective as of June 8,
2007. Under the Nazem Separation Agreement and subject to certain terms and conditions set forth therein, the
Company and Mr. Nazem have agreed to, among other items, the following:
• Mr. Nazem would continue to provide services including transition services between May 30, 2007 and
June 8, 2007.
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