Yahoo 2008 Annual Report Download - page 105

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
The Amended Severance Plans made the following changes, among others, to the terms of the Original
Severance Plans:
1) The period during which the termination of an eligible employee would trigger eligibility for severance
benefits was decreased from two years following a “Change in Control” (as defined in the applicable
Amended Severance Plan) to one year.
2) The circumstances permitting an eligible employee to terminate employment for “Good Reason” (as defined
in the applicable Amended Severance Plan) following a Change in Control were amended.
3) The Board in place prior to a Change in Control is given the ability, subject to certain limitations, to
terminate or amend the Amended Severance Plans during a Potential Change in Control Period (as defined in
the applicable Amended Severance Plan) as part of any Board approved transaction that would constitute a
Change in Control.
4) Any dispute between an employee and the Company concerning an application for benefits based upon a
claimed material diminution in the employee’s duties and responsibilities will be subject to binding
arbitration.
5) Neither the election of a new Board that is made up of a majority of members who were not members of the
Board prior to the election nor a sale of the Company’s search business would constitute a Change in Control.
Certain changes are not applicable to employees in certain jurisdictions outside the U.S. where country-specific
sub-plans were adopted in accordance with applicable law.
The Amended Severance Plans became effective upon execution of the Settlement Agreement, but expire in
90 days if the Delaware Court does not finally approve the Settlement Agreement unless the Board directs
otherwise. If the final approval is overturned on appeal and the Settlement Agreement is terminated, the
amendments are void unless the Board directs otherwise.
Note 13 C
OMMITMENTS AND
C
ONTINGENCIES
Lease Commitments. The Company leases office space and data centers under operating and capital lease
agreements with original lease periods up to 23 years which expire between 2009 and 2027.
The Company has entered into the following material lease agreements with minimum lease commitments in the
three year period ended December 31, 2008.
• In 2006, the Company entered into an 11 year operating lease agreement for a data center in the eastern U.S.
with a total expected minimum lease commitment of $191 million. As of December 31, 2008, the Company
had total expected and remaining minimum lease commitments of approximately $180 million over the lease
term. The Company has the option to renew this lease for an additional five years and also has a right of
expansion for any additional lease space that becomes available.
• In 2008, the Company entered into an 11 year lease agreement for a data center in the western U.S. With a
total expected minimum lease commitment of $105 million, $21 million is classified as an operating lease for
real estate and $84 million is classified as a capital lease for equipment. As of December 31, 2008, the
Company had total expected and remaining minimum lease commitments of approximately $102 million over
the lease term. The Company has the option to renew this lease for up to an additional ten years.
Rent expense for all operating leases was approximately $73 million, $88 million, and $103 million for 2006,
2007, and 2008, respectively.
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